Australia Can't Afford One Nation

One Nation is polling between 26 and 31 per cent of the primary vote, and on some two-party-preferred measures the next federal election is a contest between Labor and Pauline Hanson. The pitch driving that surge is simple: Labor and the Coalition have run this country for decades and wrecked it, so tear the system down.

I want to test that claim against the data, because I think it is one of the most consequential falsehoods in Australian public life right now. Let me be clear at the outset — this is not a piece for Labor, and it is not a piece for the Coalition. I have sharp criticisms of both, and I will make them below. But the premise that the major parties have ruined Australia is not merely wrong. It is almost exactly backwards.

Start with the scoreboard. The UBS Global Wealth Report 2025 ranks the median Australian adult as the second wealthiest person on earth, behind only Luxembourg, at roughly US$268,000 in net wealth — about A$413,000. Not the average, which billionaires distort. The median. The person in the middle. Australia sits inside the global top ten on the UN Human Development Index. Our superannuation system holds $4.4 trillion — the fourth largest pool of retirement savings on the planet, for a country of 27 million people, and on track to be the second largest by the mid-2030s. And from September 1991 to March 2020, Australia recorded the longest unbroken run of economic growth in the history of the developed world — nearly twenty-nine years without a recession, through the Asian financial crisis, the dot-com bust and the global financial crisis.

Now the debt, because this is where the populist story falls apart fastest. Yes, Commonwealth gross debt has crossed a trillion dollars, and that number sounds terrifying on a corflute. But debt is only meaningful relative to income. On the IMF's like-for-like measure, general government gross debt across advanced economies averages around 113 per cent of GDP: Japan sits at 230 per cent, Italy at 137, the United States at 124, with France and the United Kingdom both above 100. Australia sits at roughly half of GDP on the same measure, with Commonwealth net debt around 20 per cent, and a AAA rating from all three major agencies. If decades of two-party government were a failure, it was a failure that left the median citizen richer than the median citizen of America, Britain, Germany, Japan or Switzerland — carrying a fraction of their government debt.

None of that was an accident, and neither side of politics owns it alone. Hawke and Keating floated the dollar in December 1983, deregulated the financial system, dismantled the tariff wall, created Medicare in 1984, introduced enterprise bargaining and legislated compulsory superannuation in 1992 — the single greatest wealth-building machine ever handed to the Australian worker. Howard and Costello introduced the GST in 2000, formalised Reserve Bank independence in 1996, ran repeated surpluses, eliminated Commonwealth net debt by 2006–07, created the Future Fund, and after Port Arthur delivered gun laws the rest of the world still envies. Rudd's response to the global financial crisis — fast, large, and unfashionable at the time — is a major reason Australia was one of the only advanced economies to avoid recession in 2009. Gillard built the NDIS. The Abbott and Turnbull governments signed the free trade agreements with Korea, Japan and China that underwrote a decade of export income, and JobKeeper, whatever its leakage, stopped the pandemic becoming a depression. That is the actual record: two parties, alternating in office, each building on foundations the other laid.

Now the failures, because pretending they do not exist is how you lose the argument. Keating gave us the recession we had to have — a 17 per cent cash rate and unemployment near 11 per cent. The Rudd–Gillard years produced the fatal mismanagement of the home insulation program, a botched mining tax, and a leadership culture that turned the prime ministership into a revolving door the Coalition then kept spinning. Howard's 1999 capital gains tax discount, layered onto negative gearing, helped convert housing from shelter into a leveraged asset class — a settled policy failure neither side has been willing to touch for twenty-five years because homeowners vote. The Coalition presided over the wage stagnation of the 2010s, an energy policy famous for ending more prime ministerships than power stations, and Robodebt — a scheme a Royal Commission found to be unlawful, which pursued vulnerable people for debts they did not owe. And the recent record is genuinely poor: Australians endured seven consecutive quarters of per-capita recession through 2023 and 2024, and real per-capita household disposable income fell around 8 per cent in the two years to March 2024 — the worst result in the OECD, whose average rose 2.6 per cent over the same period. The cost-of-living anger fuelling One Nation is not imaginary. It is the most legitimate grievance in the country.

But diagnosis matters, because the grievance has a boring cause and the boring cause has a boring cure. Living standards over any horizon longer than an election cycle are set by one thing: productivity — how much value each hour of work produces. Paul Krugman's line remains the cleanest statement of it: productivity isn't everything, but in the long run it is almost everything. Almost all of the growth in Australian incomes over the past century traces back to productivity growth, and the Productivity Commission found the decade to 2020 was our slowest for productivity in sixty years. That — not immigration, not the ABC, not net zero — is why the pay rise stopped arriving. Every reform named above, from the tariff wall coming down to compulsory super, was a productivity or capital-deepening reform. The problem is not that the machine was badly designed. The problem is that around two decades ago, both parties stopped feeding it.

Which brings us to what One Nation actually proposes to do with government: withdraw from the Paris Agreement immediately, exit the UN Refugee Convention, cap migration at 130,000, make the ABC a subscription service in the cities and abolish the SBS, while describing itself as the only political party to question climate science. Judge each item on its merits if you like — but notice that not one of them touches productivity, the tax mix, or housing supply, the three levers that actually determine whether your children live better than you. And the flagship policy cuts against its own voters: Treasury's lifetime fiscal modelling finds skill-stream migrants contribute around $198,000 per person more to Commonwealth and state budgets over their lifetimes, against a negative $85,000 for the general population — with primary skilled applicants averaging around $415,000. A deep cut to the skill stream shrinks the tax base that funds the Medicare and pension systems One Nation's base relies on most.

So here is the argument in three sentences. Australia's prosperity was not luck and it was not inevitable — it was built, deliberately, by four decades of hard reform delivered by both major parties and defended across changes of government. The stagnation Australians feel today is real, and it exists because that reform program largely stopped a generation ago. The answer is to restart it — to demand the next float-the-dollar, the next super guarantee, the next competition policy — not to hand the second-wealthiest median citizenry on earth to a party with no plan for the one variable that matters.

Because as always, these outcomes are not accidental. They are arranged. The Australians who arranged our prosperity did the unglamorous work of reform and took the political pain for it. The only question that matters now is whether we elect people willing to do that work again — or people offering to smash the machine that did it.