For a further discussion of demographic trends in Australia, see Productivity Commission (2013), An Ageing Australia: Preparing for the Future, Commission Research Paper, Canberra. 4  Some of this slower growth in hours is cyclical in nature. 4  BIS central bankers’ speeches  If this pattern were to continue, as seems likely, the Australian economy faces a substantial challenge.
Over the next decade or so, if we are to achieve anything like the type of growth in real per capita income that we have become used to, then a substantial increase in productivity growth will be required. We can no longer depend on a rising terms of trade and favourable demographics to make us richer.