In the long run, productivity is the key driver of real wages growth. Alas, Australia’s productivity over the last decade (i.e., 2010-2020) grew at its lowest rate for 60 years. But it could be worse:

“Turkey has had no total factor productivity growth or technological upgrading for over 15 years. Economic growth has been low-quality, driven by the construction sector, credit expansion and government spending, without enough investment or technological and efficiency improvements”

Turkey serves as a valuable warning for Australia’s policymakers: you can’t print and spend your way out of structural problems forever. At some point you have to pass productivity-enhancing reforms… or become Turkey. 🤷‍♂️