Last week's National Accounts made for difficult reading.

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After what had been nascent improvement, the nation's quarterly report card showed the economy slipping back into mediocrity.

And we need to prepare ourselves for worse to come in the June quarter because of the war in Iran.

Inflation will accelerate and the fallout will cascade through our supply chains, from fertilisers to plumbing equipment. The economy is likely to shrink in the current quarter.

Let's look at some of the headline results from the last quarter. Real GDP growth was just 0.3 per cent, down two-thirds on growth at the end of 2025.

But for the boom in data centres and higher public spending, the economy would have stalled.

Productivity fell again, after no gain at all in Q4. The best measure of productivity - output per hour worked -is now below where it was before the pandemic.

Over roughly the same period, productivity in the US surged 20 per cent.

And the per-capita recession lingered for another quarter. Output per person has fallen now for 10 of the past 15 quarters, an unprecedented run of failure going back six decades.

There have been deeper downturns, but never one this long.

Weak productivity and falling incomes mean Australia's living standards are being slowly squeezed.

Remember, rising productivity is the only thing that delivers higher living standards over time. Everything else is fleeting.

Crucially, we've lost our economic dynamism, the 'secret sauce' that nourishes productivity.

Dynamism is the pace at which we change jobs, the rate of business entries and exits, and the speed of diffusion of new technology.

For years, our metrics have been going the wrong way - we lost the recipe. And it's not hysteria to say we're in a productivity crisis.

The malaise explains why our economy can barely grow above 2 per cent without generating inflation. Our speed limit, our potential rate of economic growth, has........

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