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Henry Thornton - Economics: A discussion of economic, social and political issues A Miracle Economy? Date 25/01/2002
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Is Australia a Miracle economy or just the Lucky Country again?
By PD Jonson Email / Print
Australia sailed through the last “Asian crisis”. Now we are growing strongly while the US, Europe, Japan are grappling with recession. Access Economics have attached the label “miracle economy”. Is this ironical, like Donald Horne’s “Lucky Country” or are they pitching for more consulting from the Federal Government?

Stephen Koukoulas looks at the evidence in the fin today. He notes that a recent World Bank study shows that Australians rank 26th in the world in terms of income, having been eighth in 1970 and third in 1950.

While the rate of decline has been arrested by the economic reform undertaken during the 1990s, Professor Kym Anderson, of Adelaide University, suggests that: 'by that standard at least, the long-term performance of Australia's economy has been relatively poor'.

In other words, while Australia, on average, has been expanding and recording what appear to be solid rates of economic growth over the past two decades, the bulk of the rest of the world has been growing more rapidly. Australia is running hard, but others have been going even harder.

This is a generic Aussie problem, except in sport and, it seems from the recent Golden Globe awards, in film. We do better than ever before in the past but when we look around we find others are doing even better. The simplest indicator of Australia’s long-term relative decline is the century-long decline in the value of the Aussie dollar. The accelerating tendency for our major companies to move offshore, or be taken over by overseas companies, is another. High unemployment is another. So too are low business investment numbers and declining school retention rates. The looming crisis in our universities should be added to this list.

What should be done to lift Australia’s game? Koukoulas has a sensible list of issues for Treasurer Costello to consider. “There are plenty of areas of economic policy that need attention, and the resounding win of the Coalition in last November's election gives it plenty of scope to push hard with a reform agenda.

The sale of the rest of Telstra, labour reform, consideration of State-Commonwealth duplication of services, superannuation policy, income tax reform - to name a few - are areas that might be developed to nurture the economic performance of Australia in the years ahead.

Governments of both colours have thrown plenty of money at groups such as the Australian Institute of Sport to ensure we win lots of gold medals at the Olympic Games and that our sports teams are world-class.

How about some policies that ensure the business sector, which is the driver of economic and income growth, is world-best - to ensure that over the next decade or so, Australians enjoy even higher income growth and, with it, higher living standards? “
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