The Albanese Government wants Australians to believe that the era of market dogma is over.

That government is back – not as a bystander, but as an active economic player. And to be fair, there are signs of life.

A “Future Made in Australia.” A National Reconstruction Fund. A commitment to social housing after years of neglect. Modest industrial policy. More public sector apprenticeships. Greater ambition on climate. Public investment in clean energy and battery manufacturing. A rebalancing of vocational education.

These are steps – welcome, overdue, and politically significant. But they are also small. And, in their caution, they remain trapped within the very myth they aim to outgrow: the idea that government can help only if it mimics or enables markets, never if it leads.

Myths that linger

Despite its rhetoric, Labor has not shaken the deep narrative inheritance that Naomi Oreskes and Erik Conway called out in The Big Myth — that government is slow, suspect, and second-best. That markets are dynamic, efficient, and fair by nature. That public power must always be exercised with deference, with apology, or with limits.

This is evident in the shape and scale of its initiatives:

The National Reconstruction Fund is capitalised through government bonds but explicitly structured to be “independent,” arm’s-length, and non-political – as if democratic direction were a liability.

The Housing Australia Future Fund relies on financial returns from the stock market to fund public need, rather than direct public investment in shelter as infrastructure.

The Future Made in Australia policy promotes value-adding in minerals and manufacturing – but still struggles to articulate a coherent role for public ownership, planning, or procurement.

Playing defence, not writing the playbook

In short, the Albanese Government is playing defence – trying to mitigate the worst failures of market liberalism without confronting its underlying architecture. It’s patching potholes on a road that leads nowhere.

There is no serious move to restore public service capability gutted by decades of outsourcing. No reimagining of public banking or patient capital. No effort to create democratic institutions to guide long-term economic transformation. And no bold fiscal story that asks Australians to pay more tax in exchange for a more equal, capable, and resilient society.

Instead, Labor clings to the frame that government must incentivise, leverage, facilitate – never own, direct, or guarantee. Even where intervention is evident, it’s couched in language of risk minimisation and market confidence, not public purpose.

Why so timid?

The reasons are not mysterious.

Labor fears the ghost of Whitlam, the Murdoch press, and the risk of being caricatured as economically reckless. It is also institutionally shaped by four decades of internalising the very myths it now seeks to modify. Ministers speak the language of public value but act with the logic of markets and fiscal constraint. There is little appetite to rebuild what was dismantled: democratic planning, regional development authorities, infrastructure-led employment guarantees, or public research institutions with real clout.

Meanwhile, Australia’s pressing challenges — climate breakdown, housing collapse, economic complexity, inequality — require more than polite Keynesianism. They demand a new public settlement.

The task ahead

What would it mean to truly bring government back in?

It would mean reasserting democratic and public control over energy, transport, housing, and data infrastructure.

It would mean investing boldly, directly, and unapologetically in public goods – not to “stimulate” private markets, but to build shared foundations.

It would mean expanding the tax base and confronting the concentration of private capital – not just managing it.

And it would mean re-training the public service not merely to contract out delivery, but to deliver and govern in the public interest.

The Albanese Government may be inching toward this realisation. But the pace of the crisis is faster than the pace of its reforms. The myth of market supremacy still shapes our institutions, our budgets, our media and our imagination.

Breaking that myth demands more than technocratic tweaks. It demands a public renaissance – of confidence, capability, and ambition.

We can start by telling the truth: the market experiment has failed. Government is not the enemy of progress. It is how we build it – together.

The views expressed in this article may or may not reflect those of Pearls and Irritations.