Labor's decisive win offers 'best chance' to fix Australian economy

But it is unclear if tough steps will be taken, with officials focused on current threats

- SYDNEY

SYDNEY - Prime Minister Anthony Albanese shocked Australia by securing a historic win in the election on May 3.

Now the question is whether he will use that mandate to push through tough measures to overhaul the nation's economy.

For years, previous administrations have shied away from tackling politically difficult issues such as removing tax incentives for investment property and cutting red tape to improve housing supply.

After winning a majority in Parliament with the strongest mandate since World War II, Mr Albanese's centre-left government now has the best chance in years to take the hard steps economists have called for to ignite growth.

The need to act is becoming more urgent as key pillars that drove Australia's expansion in the past few decades start to unravel, including China's massive demand for minerals.

S&P Global Ratings warned in April that Australia's prized AAA sovereign rating is at risk if election campaign pledges result in larger structural deficits, debt and interest costs.

"The strong result means they are almost certain to get a third term and can have more confidence implementing reform policies that may be less popular initially but will produce longer-term benefits," said Dr Jonathan Kearns, previously a senior official at the Reserve Bank of Australia and now chief economist at money manager Challenger.

"They know where to start," he said, citing a number of past reviews of the tax system and productivity performance that are still "lying on the shelf".

Whether Mr Albanese will take action, however, is unclear. For now, officials are focused on more immediate threats, such as housing costs and economic turmoil triggered by US President Donald Trump's global trade war.