Swim parallel to the beach. That's the advice from lifesavers if you're stuck in a rip.

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The logic is straightforward. Swimming against the tide is hard. You'll probably run out of steam before you get to safety.

Your odds are much better if you go with the flow and steer yourself in the right direction.

It's good advice for beachgoers. It's also good advice for the government as it prepares the budget.

The economy is looking bleak. Economic growth is down. Productivity growth is down. Business investment is down. Living standards are down.

The only things going up are inflation, interest rates, oil prices and geopolitical tensions.

The government is stuck in a rip. But there is a way out if they swim with the tide.

The "tide" refers to the positive forces that are already happening in the economy which the government could maximise if it tweaks its policies in the right direction.

The first is tech investment.

Data centres alone will require more than $26 billion of investment over the next five years. This will see the workforce double to almost 18,000 people and give productivity a much-needed boost.

The demand is being driven by all of us. The number of internet-connected devices and the number and scale of new digital services - many of which are great for productivity - is set to at least double in the next five years.

Training AI models in Australia on Australian data will bring similar benefits: more investment, higher productivity, more innovation, more jobs, and higher wages through better models tailored to Australia's needs.

These investments are already happening. But they could be bigger. If the government swims with the tide by providing stable and supportive policies on development approvals, power allocations and intellectual property laws it could crowd in even more investment.

The second........

© Canberra Times