The passage of long overdue reforms to the Environmental Protection and Biodiversity Conservation (EPBC) Act demonstrates powerfully that democratic governance is alive and well in Australia.

The Australian parliament has done its job and passed 21st-century reforms that support a modern economy, enable the creation of new and sustainable jobs while promising not to destroy, but in fact improve, the health of the natural world.

This is no small thing. In what are clearly dangerous times for democracies around the world, the Australian parliament has demonstrated emphatically that ambitious economic reform remains possible. And yes, I do mean “economic” reform.

As in the past, courageous leadership has been rewarded with agreement. As in the past, the parliament has engaged constructively, in the national interest, rising above the debilitating personality politics and culture wars of recent years.

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The winners stand to be future generations of Australians. In this instance, our elected representatives have demonstrated they understand that this is where their most weighty obligation is owed. But meeting that obligation is hard. Democracies often appear carefully designed to reward short-termism. Yet the success of a parliament can only be assessed according to what it does for the future. In the final sitting week of 2025, the Australian parliament appears to have delivered.

The package of reforms to the EPBC Act fixes an ugly policy mess. The mess had been called out in several reviews, including Graeme Samuel’s review delivered more than five years ago.

As I observed in an address to the National Press Club mid-year, report after report tells the same story of failure. The environment is simply not being protected. Biodiversity is not being conserved. Nature is in systemic decline. The environmental impact assessment systems embedded in the laws are simply not fit for purpose. Of particular concern, they are incapable of supporting an economy in transition to net zero.

The mess of poorly constructed environmental laws has been undermining productivity. I noted that we simply cannot afford slow, opaque, duplicative and contested environmental planning decisions based on poor information, mired in administrative complexity.

This week’s reforms promise to fix the mess.

The reformed act will deliver a set of standards that aim to protect matters of national environmental significance. It will provide certainty for all stakeholders about impacts that must be regarded as “unacceptable” and therefore avoided.

It builds integrity into the administration of the laws through the establishment of an independent, national EPA. It promises to end the absurd carveout for native forests, the landscapes that remain most richly endowed with biodiversity and healthy ecosystem functioning. And it lays the foundations for the development of regional plans that provide an opportunity for the three levels of government to work with local communities, including First Nations custodians, to design sustainable futures.

Significantly, long-overdue protection will be provided for our forests. The lungs of the Earth, a lifeboat against climate change, a filter against sentiment destroying the Great Barrier Reef and a haven for wildlife will be provided real protection, while incentives will be provided to support a modern forestry industry based on plantations.

And there is another thing that should be called out at this time. This may be the most important thing.

For centuries, humans have believed that economic and social progress necessarily comes at the expense of the environment. We have believed that the destruction of the natural world is a price that must be paid for everything else that matters to us; as we accumulate physical and financial capital, we must run down the stock of natural capital.

We have acted as if we can choose, indefinitely, to trade-off environmental integrity for material gains. Our choices have created deserts, waterways incapable of supporting life, soils leached of fertility, climate change driving weather events of such severity and frequency that whole towns, suburbs and agricultural landscapes are fast becoming uninsurable.

This week’s amendments acknowledge that the state of the natural world is foundational. That without its rebuilding, future economic and social progress cannot be secured.

We should think of economic and social progress as exercises in constrained optimisation. This framing is familiar to those immersed in economic policy. And yet, as I noted in the National Press Club address, economics has for the most part ignored the most important constraints on human choices. These are embedded in the immutable laws of nature. Our failure to recognise that is now undermining productivity growth and having a discernible impact on economic performance. It threatens livelihoods, even lives.

Writing into law an acknowledgment that environmental protection and biodiversity conservation necessarily underpin everything else, and that they must therefore have primacy, is a profound achievement. An unprecedented bequest to future generations.

• Dr Ken Henry AC is a former treasury secretary and chair of the Australian Climate and Biodiversity Foundation