Ken Henry, former head of Treasury and current chair of the National Australia Bank, invited the audience at the ANU Crawford Leadership Forum this morning to do a spot of time travel.
Speaking on the theme of what might be in store for the future of jobs, growth and wages, Dr Henry took an insightful, if slightly disturbing, look back at the first ever Intergenerational Report produced by the Treasury department in 2002 which addressed Australia's challenges and introduced to the world the concept of the 3Ps: population, participation and productivity.
"It's time for a reality check," Dr Henry said, before launching into a comparison of what Treasury officials predicted would be the situation in 2018 with the reality.
Fact one: Australia's population is 11.1 per cent larger than predicted it would be in 2002.
Fact two: The population today is much younger than anticipated in 2002.
Fact three: The IG report predicted productivity would sit at 1.75 per cent. It has been just 1.2 per cent.
Fact four: The report predicted workforce participation for over 15s would fall from 64 per cent in 2002 to 61 per cent. Instead it stands at 65.5 per cent.
Fact five: The IG report said working hours per person needed to increase. Instead, they have gone backwards.
Fact six: The report predicted labour productivity would grow by 1.75 per cent per year. Instead, over the past 16 years it has averaged 1.4 per cent.
Fact seven: The terms of trade are 50 per cent higher in 2018 than predicted.
Dr Henry said that when the original Intergenerational Report was produced "the intention was to scare people and get them worried about the future."
"We said if we don't do more about productivity and participation, (GDP per capita growth) would continue to sit at 1.75 per cent which was very poor historically. In fact, it has been 1.2 per cent."
The issue appears to be that benefits flowing from a more youthful population and growth in workforce participation has been offset by a decline in the number of hours worked - a situation that looks set to worsen as the gig economy and automation kick in.
"In 2002 we said we need to achieve much stronger working hours per person. In fact, we have gone backwards."
In terms of productivity, the news is is even more alarming. In 2002, the IG report imagined that labour productivity would grow by 1.75 per cent a year. It has averaged 1.4 per cent. And while it hasn't all been bad news - there have been improvements in living standards, for example - it turns out that strong terms of trade over the past 16 years has offset real declines in GDP per capita.
While the 2002 report was intentionally pessimistic, Dr Henry said he is an optimist.
"I do think ... the fourth industrial revolution will produce a suite of high paying jobs that otherwise would not have been available in Australia. But that will only happen if we make it a globally attractive destination for businesses to invest here."