Treasurer Jim Chalmers is due to release Australia's seventh Intergenerational Report, projecting the state of the economy in 2066. Columnist Peter van Onselen argues the report's credibility hinges on Treasury's productivity growth assumption, warning that without genuine productivity gains, government promises about future living standards and finances are unlikely to be realised, echoing shortfalls seen after Peter Costello's 2002 report.

The article notes that Australia's economy grew just 0.4 per cent in the June quarter while GDP per person stagnated and real disposable income per person fell 0.4 per cent, with productivity roughly only one per cent above its 2015-19 average. Treasury previously cut its long-run productivity assumption from 1.5 to 1.2 per cent, wiping 9.5 per cent off projected economic size by 2063, leaving Chalmers to choose between an optimistic assumption unsupported by recent performance or a downgrade acknowledging weaker future prospects. The piece also highlights Australia's $31.5billion deficit and over $1trillion in gross debt, alongside political risks for Labor from declining living standards and rising support for One Nation.