While the nation’s economic focus this week was on Brisbane, it was hard to avoid the impression that Sydney was the place to look if you wanted a glimpse of Australia’s economic future.

One of the issues raised before the government’s economic forum was whether the government would be using it to have a dialogue to attendees or simply spruik its economic message to them. It seemed, however, everyone was too busy reciting their talking points to listen to anyone. Productivity, intoned Glenn Stevens. Productivity and corporate tax cuts, said business. Corporate tax cut is back on, said the Prime Minister. No net corporate tax cut, said unions.

Meanwhile, NSW Treasurer Mike Baird unveiled a budget that sought to reconcile the tension between flat revenues and increasing demands for infrastructure investment and general service delivery.

The NSW budget has significance beyond that state’s borders, not merely because NSW continues to be the biggest state economy, but because it has so significantly underperformed the rest of the economy in recent years. Its employment performance has picked up since Barry O’Farrell came to power, but since 2008 NSW has had lower retail sales growth than anywhere but Tasmania and since 2005 private residential construction has fallen by about a quarter. In some ways, NSW has been anticipating for years where the rest of the economy has gone since the financial crisis. And the fall in revenue from stamp duty, due to the property market subsiding, and lack of GST growth, has dramatically curbed spending options for governments that don’t want to go further into debt.

Baird and O’Farrell have tried to stimulate housing construction by taking a leaf from the Rudd GFC playbook and directing their first home owners scheme into new housing rather than simply bidding up the price of existing stock. It’s a smart move, and overdue, but without greater certainty in the development approval process — currently under laborious review — and a solution to the issue of who pays for suburban infrastructure, it may not be enough to significantly lift new dwelling construction in the biggest state — one that the past few years has built around two-thirds of the dwellings built in Victoria.

More broadly, it’s important to understand we can’t have a booming residential construction sector and a booming resources industry at the same time without inflation and skill shortages, but the challenge in NSW is simply to get residential construction going again. There’s no risk of boom any time soon.

They also copped some grief for targeting public servants, but that’s the new fiscally constrained world of state governments, which as primarily service delivery agencies have fewer options for curbing expenditure without directly reducing public services.

In Brisbane, much debate has centred on how full the glass is, whether there’s a second, emptier glass (maybe moving workers from the eastern states to the mines is the equivalent of tipping the second glass into the first?), or how seamless the national garment is. If the government did intend the forum to be an exercise in messaging, it ended up with an unhelpful set of messages, because if Australians have mixed feelings about the economy, no amount of jawboning will change that.

And while we all like to harp on how flawed the government is at communicating, it isn’t only a government problem. Somewhere along the way in recent years, the governing class in Australia — from politicians to senior bureaucrats to commentator to business executives — stopped communicating effectively with voters. They stopped explaining what the national economic project was about, and how the economy was changing as a consequence of the new resources boom and other, contemporaneous phenomena such as the impact of the internet and a return to historically more normal rates of saving.

The national lack of economic confidence is far more complicated than because our house prices have stopped growing or we’re worried about Europe or we’re worried about the carbon price. We’re changing as consumers, not just becoming more conservative. We remain unsure about the benefits of economic reform, think it has made Australia a less fair place, and fiercely resent privatisation and the banks. And we wonder why governments won’t get the message.

To the extent that Julia Gillard wanted to use the economic forum to get people thinking more positively, that’s not a bad idea regardless of what else might emerge from it. But as NSW shows, policymakers have to do a much better job of explaining to voters that the future is not going to look much like the past, unless you’ve been living in Sydney for the past decade.