A small country that made the right choices

Note that the partisan stripe of Australia’s governments has been just about the opposite of Canada’s for 15 years

Steve Arnold/Flickr

Casting about for news and commentary to improve my understanding of Kevin Rudd’s turnabout-may-or-may-not-be-fair-play-but-it’s-the-game-I’m-playing attack on Australian Prime Minister Julia Gillard, who putsched him out of the job less than two years ago, I was amused to learn about this new book, released today, apparently, and written by the prominent political journalist George Megalogenis. It’s called The Australian Moment, and like so much down there, its thesis will be oddly familiar to Canadians:

“There’s no better place to be during economic turbulence than Australia. Brilliant in a bust, we’ve learnt to use our brains in a boom. Although the Great Recession continues to rumble around the globe, we successfully negotiated the Asian financial crisis, the dotcom tech wreck and the GFC. Despite a lingering inability to acknowledge our achievements at home, the rest of the world now asks: How did we get it right?

“This is the page-turning story of our nation’s remarkable transformation since the ’70s. One of our most respected journalists, George Megalogenis, traces the key economic reforms and brilliant moments of collective instinct that opened our society to the immigration of capital, ideas and people to just the right degree.”

Here’s a radio conversation with the author.

Note that the partisan stripe of the country’s governments has been just about the opposite of Canada’s for 15 years. They had a decade of conservatism under John Howard, which ended in 2007, followed since then by carbon-taxing Labor PMs. We did it the other way. The results have not been dissimilar. This would tend to confirm the suspicion that the party stripe of national governments isn’t as important as political obsessives like to think it is. The broader story, of relative economic success in Australia, confirms something else: That when Canadian leaders compare our results with the rest of the G7, it’s because the G7 these days sets a low bar. Most of the countries that have been doing really well aren’t in the G7.




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A small country that made the right choices

  1. Just to play devil’s advocate here:
    1. Given that the rise of China and India have given resource-rich countries a growth premium, what other OECD economies are as resource-rich as Canada and Australia (or Texas, which has led the US in employment growth)?
    2. Our conservative banking systems served us well in a tight spot. However, did lack of access to capital constrain Canada in previous generations? Might we be richer (but harder hit by the 2008 financial crisis) today, with less financial regulation (as is the case for the US)?
    3. Housing prices are spiraling in both Canada and Australia. Does this reflect our strong fundamentals on the ground, or is this just a bubble (spurred on by policies like the extension of CMHC backing to massive numbers of housing starts) that will eventually pop with attendant costs.

    • As to point #1: I believe Norway.. and I believe that only goes to bolster your point.

      #2: Your use of “we” here is misleading.  The “we” who are richer in the states by no means includes the general population. The US has a much larger percentage of it’s populace who are less well off than their typical Canadian counterparts. It also has a much smaller percentage who are doing better..  the difference is that those who are doing better than us are doing a *lot* better, and those who are doing worse are doing only somewhat worse. 

      #3 I don’t know about. I keep thinking we’re a bubble, but it seems that there really isn’t one bubble in Canada, but rather a few localized bubbles (Vancouver, Toronto, some condo speculation) and a lot of decent fundamentals elsewhere.

  2. Chretien and Martin campaigned from the “left”, but governed from the “right”.  They slashed health care transfers to the provinces.  They lowered corporate taxes. They passed NAFTA.  They ignored basically everything in the red book.  The ignored the Kyoto Treaty they signed.  They marched off to war in Afghanistan.  Was the Chretien government “progressive”?

    McGuinty gets a chance at a rerun.  Will he govern from the “right” and be fiscally responsible, or will he continue to cave to the public service unions, and his industrial strategies of subsidizing guaranteed economic losers like alternative energy and billion dollar handouts to favoured companies?  McGuinty essentially has to “repent” on most of his policies, or doom Ontario (and Canada).  Will he continue to allow his “friends? loot the public purse like with the eHealth and ORGNE scandals?

    • I love how you really tried not to be partisan there.  NOT

    • What’s especially ironic is that most of the time, parties who campaign from the “right” tend to govern “left”–massive spending increases, protectionism, personal tax increases, social engineering, etc.

  3. For work, and now pleasure, I have to read newspapers in US, UK, Aus, New Z and a bunch of other countries. I often feel like I am being better informed by foreign press than I am by Canadian msm – latest example was Guardian telling us Canada was threatening trade war with EU over oilsands. 

    Also, other countries msm still talk to pols and print their candid thoughts – it is amazing what foreign pols and their minions will tell press if granted anon compared to our scared and witless pols/msm.

    The Economist – Jan 2012 – Power Of Tribes:

    Joel Kotkin, a geographer, suggests another frame of reference. In “The New World Order”, a paper for the Legatum Institute, a think-tank in London, he looks at the world through the prism of culture. The ties of history and habit—of shared experiences and common customs—can explain a lot about who does business with whom. Mr Kotkin quotes Ibn Khaldun, a 14th-century Arab historian: “Only tribes held together by a group feeling can survive in a desert.” Substitute “globalised economy” for “desert” and this describes the modern world quite well.

    Cultural ties matter in business because they lower transaction costs. Tribal loyalty fosters trust. Cultural affinity supercharges communication. Reading a contract is useful, but you also need to be able to read people. Even as free trade and electronic communications bring the world closer together, kinship still counts. Indians in Silicon Valley team up with other Indians; Chinese-Americans do business with Taiwan and Shanghai.

  4. That’ll make for an interesting read/listen when my LT makes it out of the shop; meanwhile it’s amusing to read Aussie hubris for a change – become a world power! Really! With what, 16-18 million citizens?

    •  http://en.wikipedia.org/wiki/Switzerland

      • I think i getyour point, but world power? Would you say the Swiss or the Aussies rank above say India even as a world power? And certainly not above the Russians despite being considerably wealthier per capita.

        • Well, they (Switzerland) definitely punch well above their weight class demographically, and seem to almost always have a hand in when it comes to ongoings of any global significance. I won’t claim it’s a precise analogy, it was just my glib way of saying there are a lot of different paths to international influence, and a modest population isn’t necessarily a barrier.

  5. If you look at Australian politics, you will notice that both the Liberal Party(really Conservative) and the Labour Party have both moved strongly right in the last 40 years. The Labor Party voted for Kyoto but otherwise has an economic platform that is little different from the Liberal Party. In fact, since polls show that Gillard’s Labour Party is expected to lose badly next year, her party is backing away from this policy.Also, the Labour Party realizes that since only 16% of the Australian workforce is unionized that business calls the shots down there. The truth is that Labour has accepted most of John Howard’s conservative economic policies. Labour has even moved to the right on social issues. It supports government funding of private schools which hold 1/3rd of all Australian  schoolchildren. It opposes gay marriage. It supports the Howard government’s policy of ministers serving as kind of guidance counselors in schools. It supports public school prayer. Several of the state level Labour parties have worked with gun owners to roll back some gun control legislation and put in revised self defense legislation. Both Labour and the Liberals seem divided on abortion. Some Australian states allow abortion on demand for the 1st trimester and some allow it only in a few rare instances. Australian Government spending makes up only 33.5% of GDP versus 40% for Canada(43.5% for U.S.). The truth is that Australia’s Labour Party is more like the PC government of Mulroney while the Australian Liberal Party is probably on the right-wing of Canada’s Conservative Party.The likely next prime minister will be Tony Abbott of the Liberal Party. He is a pro-life conservative who comes from the party’s right-wing. The truth is that Australia is a country that votes to the right of Canada. The Liberal Party(and its descendants) controlled the federal government for 65 of the first 82 years(until 1983).Since 1983, the Labour Party began to move heavily to the right economically. This has resulted in the two parties having roughly equal periods in office.

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