Everyone Has a Theory Except Us

On Valentine's Day 2026, the United States Secretary of State stood in a Munich ballroom and told Europe what America was doing. Not what it hoped. Not what it aspired to. What it was doing.

"Deindustrialisation was not inevitable," Marco Rubio said. "It was a conscious policy choice, a decades-long economic undertaking that stripped our nations of their wealth, of their productive capacity, and of their independence."

And then the line that matters:

"Our predecessors recognised that decline was a choice, and it was a choice they refused to make." — Marco Rubio, Munich Security Conference, 14 February 2026

Agree with him or don't. That's not the point. The point is that America has a theory. Reindustrialise. Control your borders. Race into AI and space. Reject the "climate cult." Demand your allies spend 3.5 per cent of GDP on defence. Stop being "polite and orderly caretakers of the West's managed decline." This is civilisational renewal as an explicit project, with a name, a doctrine, and a figurehead. You can see it. You can argue with it. You can oppose it. But you cannot pretend it doesn't exist.

Twelve thousand kilometres away, in a very different kind of document, another superpower has a theory too.

China's 14th Five Year Plan runs to 65 articles across 842 lines. It contains 20 numerical indicators with baseline data and five-year targets, each classified as either "anticipated" or "binding" — meaning state officials are personally accountable for delivery. It covers everything from quantum computing to village toilet renovations, from seed genetics to RMB internationalisation, from the retirement age to the ratio of nurseries per thousand children under three (target: 2.5 times the current level).

On housing, the plan states: "Houses are places to live in, not assets to speculate with." It deploys property tax, financial regulation, and land-use planning to enforce this. It mandates that rental and owned properties will "gradually enjoy equal rights in public services."

On wages: "We will adhere to the basic synchronisation of the income growth of citizens and the growth of the economy." Wages will track productivity. By design. As policy. Written down, with targets.

On inequality: "Continue to increase the income of low-income groups, expand the middle-income group, strengthen tax regulation and supervision of high-income earners, reasonably adjust excessive income, ban illegal income, and curb the use of monopolies and unfair competition to obtain income."

On planning itself: "Projects follow the plan and funds and factors of production follow projects."

China plans, then funds, then builds. Whether it works is a separate question — housing prices have fallen 20 per cent since 2021, household credit is at all-time lows, and Rhodium Group estimates actual 2025 growth fell short of 3 per cent despite official figures of 5.2. The common prosperity agenda is struggling with the same problem Australia faces: households that have lost confidence don't spend, regardless of what the plan says. But the architecture of deliberate intention is unmistakable. It has a name. It has a theory. It has a 15th Five Year Plan already outlined for 2026–2030, with dated milestones and provincial roadmaps.

Australia has neither Rubio's civilisational project nor China's Five Year Plan.

Australia has a roundtable.

The hybrid nobody designed

Here is what Australia actually has, described without the language of aspiration:

A labour share of GDP at a record low of 44.1 per cent — down from 57 per cent in the mid-1970s. A fall of 13 percentage points representing approximately $200 billion per year redirected from workers to capital owners. If real wages had tracked productivity since 2000, the average Australian worker would earn $18,000 more per year. They don't. Nobody decided they shouldn't. It just happened.

Government transfers rising from $61 billion in 2013–14 to over $200 billion today. Not because anyone planned a transfer state, but because wages stopped doing the job and something had to fill the gap. The Low and Middle Income Tax Offset. The revised Stage 3 tax cuts. Energy bill relief. Rent assistance increases. Childcare subsidies. Each measure addressing a specific cost-of-living pressure. None addressing the underlying cause.

Those transfers flowing straight through households into oligopolistic markets — energy retailers making $755 per customer per year in profit (AGL), supermarkets that control 67 per cent of national grocery sales and have increased their margins every year for five years (Coles and Woolworths), a rental market where AHURI found 30–78 per cent of demand-side subsidies are captured by landlords. The government spends $3.5 billion giving every household $300 for their power bill. Underlying electricity prices fall 1.6 per cent without the rebates. Origin reports $1.49 billion profit. The transfers are not redistribution. They are a subsidy to capital, intermediated by the state, funded by debt.

And sitting between the two superpowers: $368 billion committed to AUKUS submarines to deter the country that buys 84 per cent of Australia's iron ore exports. A trade surplus with China worth 4 per cent of GDP. The US demanding 3.5 per cent of GDP on defence — nearly doubling current expenditure — while receiving only 5 per cent of Australian exports. A formal Pentagon review of AUKUS, led by a known sceptic.

The paradox that locks everything in place

The defining feature of Australian political life is a cavernous gap between recognising a problem and endorsing its solution.

86 per cent of Australians think the income gap is too large. 42 per cent support government redistribution to fix it. Among those who think the gap is too large, almost one-third actively oppose redistribution. 74 per cent believe big businesses don't pay enough tax. 64.5 per cent think high-income earners are undertaxed. 60 per cent would personally pay more tax for better health services. But when reform is proposed in concrete terms — abolish negative gearing, introduce an inheritance tax, restructure the CGT discount — support fractures along lines of self-interest, fear, and identity.

The mechanism is precise: Australians support redistribution toward "ordinary working people" at rates 12 percentage points higher than redistribution toward "the less well-off." Same policy. Different words. The framing determines the outcome. Australians want fairness in principle but interpret it as protection for people like themselves, not structural change that might disturb existing arrangements.

China resolves this by not asking. The Five Year Plan is not a referendum. It is a directive.

America resolves this by framing reform as civilisational renewal — not redistribution but restoration. "Decline was a choice." The language of patriotism, not equity.

Australia resolves this by not resolving it. By holding a roundtable. By commissioning another Productivity Commission report. By winning the largest parliamentary mandate in half a century and using it to deliver $17 billion in tax cuts and a housing plan that 16 per cent of voters believe will work.

You cannot ask for permission

The 2019 federal election proved this beyond argument. Labor took negative gearing reform and a halved CGT discount to the Australian people. The Australian Election Study found 57 per cent of voters actually supported the policies. Labor lost.

The post-election analysis is devastating. Only the wealthiest income quintile swung to Labor. The four quintiles who would benefit most from the reforms swung away. The seats that swung hardest against reform — Dawson (11.2 per cent), Herbert (7.6 per cent), Longman (3.9 per cent) — were lower-income, lower-education regions where the scare campaign landed hardest. A completely fabricated "death tax" — a policy Labor did not even propose — became the most effective weapon against them, amplified through millions of Facebook posts and Clive Palmer's $60 million advertising blitz.

Six years later, both parties explicitly refuse to take negative gearing reform to an election. Labor won a landslide in 2025 — 94 seats, the most any single party has ever won — without touching investor tax concessions. The lesson was learned. The scar remains.

The Voice referendum confirmed it. A proposal backed by one major party, initially supported by a majority, collapsed to 40 per cent Yes under sustained campaigning. The slogan that destroyed it — "if you don't know, vote No" — will destroy any economic reform referendum too.

But here's the thing. Every successful Australian economic transformation was delivered without asking:

• Medicare: imposed by Whitlam, restored by Hawke. Not voted on.
• Compulsory superannuation: negotiated under the Accord. Unions traded wage claims for employer contributions. Not voted on.
• Tariff reform: Treasury recommended it for two decades before the 1982–83 recession created the political space. Hawke acted. Not voted on.
• The GST: Howard reversed his "never ever" pledge and took it to one election — an act of ideological commitment rare in Australian politics. He won by one seat.

The pattern is absolute: Australians will accept economic reform imposed by a government they trust, but will never vote for it when given the direct choice to say No. The path to structural change runs through Parliament and political courage. Not through referendums. Not through roundtables. Not through national conversations.

The multi-employer bargaining reforms of 2022 prove it. Enterprise agreement coverage has already risen from a record low of 14.8 per cent to 21.3 per cent. 1.26 million workers covered by newly approved agreements in twelve months — the highest on record. The early childhood workers' deal covering 91,000 workers is proof of concept. Nobody voted on it. Nobody campaigned against it. It just happened, through Parliament, because a government with a mandate decided to act.

The crises are arriving

The crisis thesis — that Australia only reforms when bleeding — has been tested against 124 years of history and holds. Six interlocking mechanisms make structural reform functionally impossible through normal democratic processes: Olson's institutional sclerosis from uninterrupted stability, Pierson's path-dependent policy feedback loops, Fukuyama's vetocracy of Senate crossbench and federal structure, Blyth's ideational vacuum where no politician will champion dangerous ideas, Hall's paradigm stickiness where first-order tinkering substitutes for structural change, and Thelen's gradual drift where institutions remain unchanged while the world shifts beneath them.

But the crises that could break the paradigm are no longer hypothetical. They're arriving.

What matters is which ideas are ready

Mark Blyth got it right: crisis is necessary but not sufficient, and what matters is not which crisis arrives but which ideas are ready when it does.

The ideas exist. The Henry Tax Review produced 138 recommendations in 2010. Five to ten were implemented. The Productivity Commission has documented the structural diagnosis exhaustively. The COVID-19 transfer experiment proved that poverty is a policy choice: 646,000 Australians, including 245,000 children, were lifted out of poverty by the Coronavirus Supplement. When it was withdrawn, poverty was reinstated. The experiment proved the point and was immediately filed away.

The Economic Reform Roundtable of August 2025 produced broad agreement that the tax system is "overly generous to older and wealthier Australians, at the expense of younger people and our future prosperity." Then: nothing structural.

Ireland's experience is the warning. A 56 per cent price crash, 15.2 per cent unemployment, a banking collapse requiring €46 billion in recapitalisation, and the effective loss of fiscal sovereignty — and Ireland produced no lasting structural housing reform. Post-crisis policy actually worsened the housing system. Ireland is now deeper in crisis than before the crash. Crisis guarantees nothing. It depends on which ideas dominate at the moment the window opens.

The ideas for Australia are ready. Multi-employer bargaining is already delivering results. The Henry Review sits waiting. The Productivity Commission's supply-side housing recommendations need only political will. Superannuation reform, negative gearing reform, CGT reform, inheritance taxation on estates over $5 million — the policy architecture exists, is evidence-based, and would raise an estimated $70 billion annually. What is missing is not knowledge. It is not policy design. It is not even public support — the polling is there, locked behind the egalitarian paradox, waiting for someone to act without asking.