The View from Down Under: Gold, gold, gold for the Australian economy

by Joanne Lane

19 October 2011. Brisbane, Australia. Australia may be out of the Rugby World Cup but we do have another world best on our hands.

It’s none other than our treasurer, and deputy prime minister, Wayne Swan, who was named Finance Minister of the Year 2011 in the esteemed UKmagazine Euromoney. It’s a great award to be sure, although most Australians would be amazed at the accolade and probably still have preferred the world cup.

Swan, who has been the treasurer since November 2007, received the award on 25 September inWashingtonwhile attending meetings of the International Monetary Fund and the G20. The only other Australian to receive the award is former Prime Minister Paul Keating in 1984.

“Swan received his award for his careful stewardship of Australia’s finances and economic performance, both during and since the global financial crisis,” Euromoney said.

“Throughout that time, Australia has not only avoided falling into recession but has been the best performing of the world’s developed market economies.”

Euromoney credited Swan for swift action during the global financial crisis (GFC), imposing fiscal discipline and an exit strategy for the stimulus despite strong opposition and a small majority government.

However they also acknowledged other factors had played a key role in his success.

“Swan has undoubtedly been blessed with a number of advantages, including inheriting a sound economy and the natural resources bounty that has allowed Australian trade with Chinain particular to boom.”

So what does this mean to the every day Australian? Unfortunately not much.
Some might credit Swan for bringingAustralia through the GFC but there have been other knee jerk reactions. One is a sense of ‘what was all the fuss about?’ when we remained largely untouched—just one quarter of negative growth—but somehow ended up with huge debt. It’s also left people very wary doubting if their wages, jobs, wealth and homes are secure.

Others think Swan was just in the right place at the right time.

Shadow Treasurer Joe Hockey said, “He should hand the award to Peter Costello [the former Treasurer] with a thank-you note, pointing out that he’s been standing on the shoulders of giants.”

Hockey also said, “Mr Swan has racked up $154 billion of deficits, he’s yet to deliver a budget surplus and has turned $45 billion in the bank into a $110-billion-dollar credit card bill.”

Hockey is not the only one that has looked back on the 11-year reign of the Howard-Costello government with rose tinted glasses, forgetting it was we the people that ousted them when it was deemed time to change.

Many Australians also prefer to credit our survival economically to the Asian tiger than any fantastic policies; economies like China and India that pulled us through by demanding our ample resources.

So despite a few news bulletins about Swan’s prestigious award, it failed to make many ripples. Further still, most Australians would be surprised to learn our economy is the envy of the Organisation for Economic Co-operation and Development (OECD).

With Spain, Greece, Italy and the USA still in the grip of mind boggling debt, Australia’s 1.2 percent growth in GDP in the second quarter of 2011, its low unemployment, rising incomes, steady dollar appreciation and strong exports are viewed as impressive – the “lucky country” tag still firmly intact.

Euromoney describedAustralia in another article as “democratic, peaceful and living in spacious, sun-drenched splendour” and “the optimistic land of plenty”. But not everyone I’ve spoken to this year would hold this opinion – either here at home or abroad.

“How can you possibly afford to travel?” a young man in an American bus station exclaimed referring to the state of the global economy. I was talking to a Swiss backpacker, whose currency, much like our own, was soaring against the Greenback at the time.

He wasn’t aware our economies were thriving or the benefit our spending would bring to the U.S.

In Australia too most people would be quick to grumble about the rising costs in the last 10 years with four of our cities ranked amongst the 15 most expensive in the world (as described in this blog post), our high private debt (we have the greatest mortgage borrowing outside the United States), and the threat of a carbon tax to business and lower income earners that seems inevitable.

The question therefore begs to be asked; have we become a nation of wingers when we’ve probably never had it so good?

Even the Reserve Bank ofAustraliagovernor Glenn Stevens, proclaimed us as “mostly, unhappy” about the state of our economy when there are many things to give thanks for. Swan himself explained that 750,000 new jobs were created inAustraliain the past four years while some 30 million jobs were shed globally.
We are also considered highly liveable according to Mercer, rank second on the UN’s Human Development Index, and are the 13^th biggest and sixth richest economy.

In other words, as the West Australian newspaper proclaimed, it’s gold, gold, gold to Australia – it’s just us that can’t see it.

Wherever we lay tribute for our success, it’s to Swan we should again turn who credits his award to “millions of ordinary Australians whose hard work and resilience have made our economy one of the strongest in the developed world”.

Perhaps it’s time to give ourselves a pat on the back and enjoy our prosperity; while of course being mindful of our commitment to our neighbours, the environment and global affairs.

While we’re talking of credit, whatever side of the political fence you might stand; it’s worth noting the Australian government is still working on our economic future. Just last week they held back to back tax and job forums to discuss issues that have been described as pivotal for the decade ahead.

They no doubt will be decided by whoever is in office. And after all, sorting those issues out will be more important in the long run than holding high that esteemed Rugby World Cup trophy.

Joanne Lane is a freelance photojournalist based in Brisbane, Australia.