Callam Pickering makes a very valid point on Australias challenged growth.
“Unfortunately the news isn’t great for the Australian labour market. There is little reason for the participation rate to pick-up anytime soon. The first of the ‘Baby Boomer’ generation hit retirement age in 2011 and since then we have witnessed a sharp decline in the participation rate.
This process is only beginning and the reality is that an ageing population will continue to put downward pressure on the participation rate for years to come. Increasingly we will be relying on a smaller share of our population to drive the economy.
The obvious implication is that it will become increasingly harder to maintain the level of growth that Australians have become accustomed to. For years favourable demographics and a resource boom has hidden our lacklustre productivity performance but now the worm has turned.”