Lifting productivity must be a priority for 2015 if living standards are to be protected.
That's the view of a think tank, the Committee for Economic Development of Australia, saying the standard of living could be significantly eroded as the nation's terms of trade continues to decline and the population ages.
CEDA boss Professor Stephen Martin - releasing the committee's 2015 economic and political overview - said there needs to be a greater focus on innovation and investment in people.
"Economic reform will also be vital to keep our economy healthy as term of trade continue to fall post the mining boom," he said.
The report paints a fairly challenging outlook with economic growth expected to remain below average in 2015, an increased rate of decline in resources sector investment, fading housing construction and the need for a sustained pick-up in household spending.
As debates continue into the access to health care and education and rising unemployment, particularly youth unemployment, social equity is likely to become a major issue in 2015.
"Unfortunately the political instability currently being experienced federally - and at a state level through changes of government - is impacting on debates and implementation of reforms and major projects we need to keep our economy on track," Prof Martin said.
The report offers a number of suggestions for federal budget savings, such as reducing tax breaks for superannuation.
It also believes increasing the preservation age for access to superannuation to encourage people to stay in the workforce longer.
But Prof Martin said it is concerning that there is a lack of appetite for a national debate on reforms such as broadening or increasing the GST.
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