Why we’re a global wonder
High praise for the Australian economy shows negative sentiment unjustified
THIS is the most hated period of economic prosperity in Australian history. It has become un-Australian to acknowledge anything we do well … and it infuriates us.
We have previously written about our personal Campaign For Optimism to try and break this destructive negativity. It’s not good for the economy, for business or for the average Australian when the reality is quite positive.
So we welcome to our campaign the world’s most prestigious economics and finance magazine, The
Economist. Based in London, this is the magazine read by the world’s most powerful politicians, bankers and business chiefs.
Last week’s cover story of
The Economist was “Aussie Rules … what Australia can teach the world”.
Inside the magazine is a 12page report on Australia, which it dubs “the wonder down under”. It’s a clinical, objective outsider’s expert assessment of how we are going as a nation – the conclusion is we’re going pretty bloody well. The only people who don’t realise it is us.
“Its economy is arguably the most successful in the rich world,” states the magazine’s editorial.
“It has been growing for 27 years without a recession – a record for a developed country. Its cumulative growth over that period is almost three times what Germany has managed. The median income has risen four times faster than in America. Public debt, at 41 per cent of GDP, is less that half Britain’s.”
Its assessment is vastly different to the common scaremongering from conservative politicians and media. Our Government debt is way below even Germany (64 per cent of its GDP), Canada (90 per cent – and it’s a similarsized economy as ours) or Japan (an incredible 238 per cent).
So, how did we get to this enviable position?
The Economist puts it down to a couple of landmark decisions, some of which were made 30 years ago, including:
Paul Keating and Bob Hawke floating the Australian dollar, abolishing import quotas, slashing tariffs, overhauling the tax code and shifting a centralised wage accord to enterprise bargaining.
Keating introducing compulsory super. Medicare.
John Howard’s macro-economic management to deliver budget surpluses in eight out of 11 years.
Kevin Rudd’s fiscal stimulus to fight the Global Financial Crisis, including his $900 handouts.
All of these changes received a huge amount of criticism, but these political
architects – who cover both sides of politics – had the vision to do what was right for the country rather than their own popularity.
The Economist claims these decisions have been what has made this country great and resulted in the current period of prosperity.
They are also in awe of our immigration policy, and our acceptance of it, which allows three times as many newcomers, relative to population, as America. Over 28 per cent of our population was born overseas and half were either born abroad or are the child of someone who was.
“The immigrants are also young, which gives Australia a median age well below that of most European countries. ”
IN A GREAT SPOT
Our geographic location has also been working in our favour. Being on the edge of the region which is fast becoming the new economic engine of the globe has been an enormous boost for our trade. It’s not just the traditional mining and agriculture sectors which have benefited from trade with Asia. It has also allowed us to diversify our economy to a point where tourism is our third biggest export, while education is in the top five.
Plus our services sector is riding the burgeoning development of a middle class across Asia which not only wants luxury brand material goods, but also access to first world medical, education and aged care.
Going forward, our crucial ties to Asia will provide a tricky political environment as we try and stay friends with both our biggest trading partner as well as our oldest ally while they’re feuding with each other.
WE CAN IMPROVE
We all know that while we live in a remarkable country, we can do better in a whole lot of areas.
The Economist highlights our failure to solve the enormous disadvantages suffered by Aborigines; how we suffer ongoing droughts but do so little to fight climate change; questions why we allowed superannuation fee rip-offs for so long; and can’t understand our treatment of illegal immigrants. The magazine calls for today’s politicians to come up with solutions to these problems using the same decisive thinking that our leaders used in the past.
But they warn Australian voters are becoming disenchanted with the effectiveness of Government. This is forcing politicians to become increasingly “febrile” in order to gain popularity, rather than do what’s right for the country. In other words, we’re killing the golden goose because we’re losing the sense of what makes us great: vision and decisiveness.
We love the conclusion, and the implied challenge, from
The Economist: “Ambitious reforms have become rare. The rest of the world could learn a lot from Australia … and Australians could do with a refresher course.”