Australia has no shortage of wealth, projects or policy targets. What it lacks is a coherent strategy for building the capabilities its future society will need.

Australia is remarkably good at talking about the future while avoiding the harder question of how we might deliberately create it. We have productivity agendas, housing targets, defence reviews, net-zero commitments, infrastructure pipelines, population projections and endless announcements of projects described as ’transformational’. What we lack is an organising conception of what Australia is trying to become and a political strategy for getting from here to there.

That matters because Australia enters the coming decades from a peculiar position. We remain an extraordinarily wealthy country, endowed with minerals, energy, land, accumulated capital, educated people and functioning democratic institutions. Yet much of this prosperity disguises vulnerability. We remain heavily dependent on commodity exports, imported technologies and foreign corporations; extraordinarily committed to property and land as stores of wealth; comparatively weak in economic complexity; environmentally stressed; strategically dependent on the United States while economically embedded in Asia; and increasingly unable to provide something as basic as affordable housing to younger Australians.

Another round of ‘productivity reform’ is not an adequate response. Productivity matters, but it is a means rather than a national purpose. A highly productive economy could still be unequal, ecologically destructive, technologically dependent and incapable of housing its population. The larger question is capability: what can Australia actually do, what can Australians do, and are those capabilities expanding or contracting?

This suggests a different conception of national development. Australia needs to become a deliberately capable country not through central planning, nor through another bout of faith that markets will spontaneously produce the society we require, but through a sophisticated mixed economy in which democratic government establishes long-term purposes and builds institutions through which public investment, private enterprise, superannuation capital, universities, workers and communities can contribute.

The distinction between activity and capability is fundamental. A multibillion-dollar construction project creates economic activity. But what remains afterwards? Skills? Technology? Australian-owned enterprises? Research capacity? Affordable housing? Improved ecosystems? Greater resilience? Or mainly higher land values, corporate profits and photographs of politicians wearing hard hats?

Australian politics has become remarkably adept at confusing spending, construction and announcements with development.

South Australia provides an unusually clear illustration. Premier Peter Malinauskas constantly invokes ambition, building and transformation. There is certainly activity: defence expenditure, mining projects, towers, sporting events and infrastructure. But a serious developmental test asks whether these activities create enduring productive, technological, ecological and social capabilities. Pouring private capital into property towers while housing becomes less affordable is not self-evidently development. Spending public money attracting international sporting spectacles while sacrificing public land does not necessarily make South Australia more capable. Even enormous defence expenditure represents genuine development only insofar as knowledge, intellectual property, skills, enterprises and supply chains become embedded here.

The same question should be asked nationally because Australia does not fundamentally suffer from a shortage of money. We possess trillions of dollars in superannuation alone, alongside enormous household, corporate and public wealth. We have an allocation problem. Too much capital has flowed towards existing property, land appreciation, financial assets and resource rents and too little towards productive complexity, research, technological development and innovative Australian enterprises.

The political question is therefore not simply whether governments should spend more. It is how democratic institutions can influence the direction of investment without eliminating the dynamism of markets. Public investment institutions, procurement, R&D, infrastructure, superannuation partnerships, public equity, loan guarantees, competition policy and taxation can all help shift the balance from speculation and rent extraction towards capability creation.

There are already fragments of such an approach. The National Reconstruction Fund and Future Made in Australia acknowledge that governments can deliberately develop strategic industries. Treasury’s Measuring What Matters framework recognises that GDP alone cannot adequately describe national wellbeing. Renewable-energy policy demonstrates that governments can create and shape markets rather than merely repair their failures. But these remain fragments. Australia still lacks an integrated developmental strategy connecting production, ecology, housing, knowledge, social wellbeing and strategic autonomy.

Imagine instead an annual Australian Capability Statement accompanying every federal and state Budget. Alongside GDP, inflation, debt and productivity, it would ask whether Australia’s economic complexity had increased; whether R&D and technological capacity were strengthening; whether housing was becoming genuinely more affordable; whether ecosystems were recovering; whether Australians were healthier, better educated and more economically secure; whether critical infrastructure and supply chains were resilient; and whether Australia was becoming more or less dependent on decisions made elsewhere.

Capability also connects the national with the personal. A capable Australia cannot simply mean one capable of manufacturing submarines, processing critical minerals or developing artificial intelligence. It must mean citizens possessing the practical capabilities required to lead flourishing lives: affordable housing, healthcare, education, meaningful work, economic security, time, culture, nature, public space and democratic influence. National capability without social capability risks becoming merely nationalism with an industrial policy.

Nor can such a project belong to one political party. Labor will be indispensable to much of it because an activist and competent state is essential, but Labor itself must be subjected to the capability test rather than automatically identified with progress. The Greens understand ecological limits but need a more developed theory of production, industry and state capacity. Conservatives could contribute traditions of national sovereignty, resilience and institutional continuity if they confronted the consequences of rentier capitalism and excessive market dependence. Independents, unions, scientists, universities, productive businesses, environmental organisations and community movements all have potential roles.

The transformation cannot therefore wait for the appearance of a visionary prime minister. It has to be cumulative. Week by week, challenge the interpretation of events: does this decision create capability or merely activity? Month by month, connect housing, industry, ecology, education, energy, culture and strategic independence into a common argument. Year by year, measure whether Australia’s capabilities are strengthening. At every Budget, ask what capabilities public expenditure actually creates. At every election, judge the parties against those tests. Over decades, construct institutions capable of maintaining direction while adapting when circumstances change.

That is why 2088 is a useful horizon. It lies beyond the careers of today’s politicians, beyond present corporate plans and beyond most existing policy targets. It represents roughly another Australian lifetime. It allows us to ask what kind of society today’s children should inherit when they themselves are old and then work backwards.

2088 establishes the direction. The 2050s identify the structural transformations required. The 2040s tell us which institutions must exist. The 2030s tell us which investments must begin. The next electoral cycle tells us which reforms can be achieved. The next Budget tells us where resources should move. And the coming weeks tell us which arguments must begin changing Australian political common sense.

Australia’s deepest problem may not ultimately be productivity, government debt, housing, climate change or even economic complexity considered separately. It is that we have gradually lost the habit and institutional capacity of deliberately becoming something.

Australia 2088 should be about recovering it: not predicting the future, and certainly not designing a rigid 62-year master plan, but progressively constructing the democratic capability to shape what comes next.

The question we should begin asking of governments, corporations, institutions and ourselves is deceptively simple: does what we are doing today increase Australia’s capacity to create the society and ecology we want tomorrow?

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