Professor Ross Garnaut, now at the University of Melbourne, is our most prophetic economist. In a much-discussed speech last week he prophesied that the easing of the resources boom would bring "hard times after more than two decades of extraordinary prosperity".
He says we face three big challenges if we're to avoid the end of the long boom leaving us with much to regret. The first is that our real exchange rate now needs to fall a long way to be consistent with full employment.
The second big challenge, he says, is to change entrenched expectations that living standards will rise inexorably over time; that household and business incomes and public services will rise and taxes will fall, as they have done for a generation.
"Those expectations must be reversed in the process of dealing with the legacy of the boom, or our efforts in reform will be defeated by bitter disappointment with political leadership and eventually political institutions," he says.
I think he's making two points. One is that economic life consists of downs as well as ups, losses as well as gains, and anyone who imagines governments should or even could shield them from all unpleasantness is destined for disillusionment. The need for income earners not to be compensated for the higher cost of imports caused by a fall in the dollar is a case in point.
The other point is we must disabuse ourselves of the notion economic life is about sitting around waiting for another serve of prosperity to be handed to us on a plate. Outside of resources booms, we have to make our own luck.
The third big challenge we face is that our political culture has changed since the reform era of 1983 to 2000, in ways that make it much more difficult to pursue policy reform in the broad public interest. "If we are to succeed, the political culture has to change again," he says.
Policy change in the public interest seems to have become more difficult over time as interest groups have become increasingly active and sophisticated in bringing financial weight to account in influencing policy decisions, he says.
"Interest groups have come to feel less inhibition about investment in politics in pursuit of private interests.
"For a long time ... it has been rare for private interests of any kind to be asked to accept private losses in the interests of improved national economic performance. When asked, the response has been ferocious partisan reaction rather than contributions to reasoned discussion of the public interest in change and in the status quo.
"A new ethos has developed in which there can be no losers from reform. Business has asserted a property right to continuing benefits of regulatory mistakes. It demands compensation for corrections to errors in policy.
"Households have been led to expect that no policy changes will cause any of them to be worse off."
Garnaut says that whether comprehensive public interest reform is possible depends a great deal on the quality of political leadership. Quality of leadership is partly about capacity to explain to citizens the nature of the choices that must be made on their behalf. He's no doubt right about the need for better leadership, but when the rest of us dwell on that lack it becomes a cop-out. It's actually a symptom of the very easy-prosperity syndrome Garnaut is warning about.
The Business Council in particular is prone to sitting around praying for God to send us leaders "prepared to lose their jobs to get things done". That's a quality as rare among politicians as it is among chief executives. If we wait for a policy suicide bomber we'll be waiting a while.
In truth, politicians are more followers than leaders. They deliver those changes being urged on them by what I'd call the nation's opinion leaders and Garnaut calls "a substantial independent centre of the national polity".
Pollies make risky reforms when they know these people have already done much educating of community power-holders on the necessity for the reforms in the public interest, and when they're confident the urgers will stand by them when the flak is flying. (The Business Council always finks out at that point.)
And Garnaut offers a further warning to those who, like the Business Council, dream of "reforms" that advance their private interests at the expense of the rest of us. Reform must be clearly in the public interest if certain groups are to be persuaded to cop losses for the greater good.
Finally, "it is a lesson of Australian history that successful periods of restraint require the equitable sharing of sacrifice". Developing a framework of equity will be important to the success of a choice by the nation to put the public interest ahead of business as usual.