THE spectre of rising unemployment, threats of a housing price bubble and the loss of more manufacturing jobs have created the perfect economic storm before Treasurer Joe Hockey's first federal budget.
Already we have seen a shifting of the tough talk of heavy cost cutting to tones of needing to adjust to the changing challenges of the nation's economy.
But if Australia's economy is indeed in a state of structural transition, then the country needs a plan well beyond cost-cutting. It needs to spell out which industries it sees growth in and present a plan for training to gain the skills required for them.
So far the bad economic news has been used as a helpful boost to the government's planned scrapping of the carbon and mining taxes. The announcement that Toyota will stop making cars here in 2017 also begs the question, what next for those workers?
For some time the massive mining revenues have been in decline, and while they will not be going away any time soon, it is clear that they will not deliver the kinds of riches they have in the past.
The obvious solution to a changing workforce demographic is training and education, preparing the workers of tomorrow for high-tech industries of the future, rather than dying manufacturing trades of the past. Yet there has been little talk of education in the government's rhetoric about the economy, most of the focus seems to be on reducing the previous government's debt and cutting costs to the tax base.
That may work to a point, while investing in major infrastructure programs may also help. But it is not a long-term solution if the goal is to restructure the workforce and be ready for the post-mining boom future.
Having dismantled the hard-won Gonski reforms that would have replaced the antiquated and unbalanced school funding model, the government seems more focused on waging culture wars on the national curriculum than it does on boosting skills and ensuring school leavers are ready for further education in the fields where future employment will come from.
It is also yet to clearly outline its alternative vision for the future of the higher education sector. With many of our major trading partners such as China opening dozens of new universities and research facilities every year, Australia will need to work hard if it wants to capitalise on new growth industries.
Education is an expensive and long-term investment but it is an essential ingredient in the process of modernising an economy, and there would be no better time than now for the government to spell out its vision for this sector.