Treasury warns the nation faces its most sustained period of weak growth for at least 50 years, with falling commodity prices and weak income growth until 2020. It might be right.

Nominal GDP is the dollar value of what’s produced and earned. It’s also the measure that drives taxation revenue. Due primarily to the inexorable rise in commodity prices and the terms of trade between 2003 and 2011 (with the exception of a brief collapse during the GFC), the federal government enjoyed strong nominal GDP growth and booming tax receipts from rising personal and company taxes, not to mention increased capital gains taxes as asset markets boomed. Since then, terms of trade have begun to trend down, meaning nominal GDP growth has been weak, as have tax receipts ...