Last week’s edition of The Economist magazine had a cover story headlined Aussie rules: What Australia can teach the world as well as The wonder down under: Can Australia’s boom last?
It was a very positive piece about Australia saying how fantastic things are. The report was done by Edward McBride who works as the Asia Editor for The Economist.
I gave Edward a call to chat about his piece and challenge him on some of things he has been saying.
Here’s Edward McBride, the Asia Editor for The Economist.
Well, Ed, the sub-head for your piece in The Economist, which was headed, The wonder down under, says can Australia’s boom last? Now I’m not sure I got the answer from the piece, can Australia’s boom last?
I mean sure it can! I didn’t mean to be sort of elusive or enigmatic. I think, as I hope the piece makes it clear, I have worries about long term policy making. I’m much less worried about the sorts of things that people point to as potential weaknesses in the economy, not that they’re not potential weaknesses, you know, housing prices, let’s say. But just that they’re sort of fairly kind of mundane problems that we know the answer to, that people are engaged with and it’s the bigger questions of policy making where I have my biggest reservations. But were Australia to get to grips with those things, you know, why shouldn’t that continue to run?
Your piece has kind of received an interesting reaction here, because most Australians are pretty down on what’s going on, they kind of think the place is going to hell in a handbasket, and then all of a sudden out comes The Economist saying it’s actually, ‘Aussie Rules, What Australia can teach the world’, it’s just phenomenal. What do you think about that reaction? Have you had that reaction directly as well?
Oh yeah, it’s part of why I wrote the piece. I don’t think Australians realise that most of the world would love to have Australia’s problems and it’s really striking that people outside Australia don’t really know how phenomenal its record is, and within Australia I feel like people don’t really appreciate it. I mean it’s a bit like when you hear people in Sydney gripe about the traffic and you think have you been to another big city? I mean it’s all relative, right? It’s not that I’m not aware of the sorts of things you’re talking about. I just think when you actually sit down and try and compare them internationally, Australia’s problems look pretty desirable.
I just wonder, you’ve got a section on the reforms that were undertaken in Australia 30 years ago. To what extent, and of course there’s the Donald Horne’s book, The Lucky Country, which was an ironic book – to what extent do you think Australia’s lack of problems, as you put it, is luck and how much is it due to good management, and in particular, the reforms that you refer to 30 years ago?
Yeah, there’s no doubt luck plays a part. Usually when people talk about luck with relation to Australia they mean natural resources and I’m not sure I really accept that that’s at the heart of Australia’s good fortune, like natural resources and [00:04:09] obviously don’t help the economy with that much and in even rich countries, it’s quite hard to maintain that diversified economy, like Australia’s when you’re blessed with natural resources, right? But I mean luck in other respects, most obviously proximity to China, right? That surely plays a part. But I do think, again, as I hope the report makes clear, that policy making plays a huge part and in particular, it’s very striking if you are looking from the outside to see a developed economy that doesn’t have really pressing anxieties about how the welfare state will be paid for, or at least not anxieties on the same scale as exist in America or Britain or France or Japan. That part I think is not really about resources or proximity to China, that’s simply good policy making.
What struck you as the main thing? As you looked around Australia and I suppose you spoke to a lot of people, when you sat on the plane back to London what were you thinking about Australia?
Lots of things, but I think that I mentioned earlier is the one that really sticks with me is that, as you say, Australians are a bit anxious, wage growth hasn’t been as good as it was in the preceding decades. They’re worried about house prices and infrastructure and political turmoil as well, all of those things, and as I said they’re all things worth worrying about. But really, the only sort of comparison that ever gets made very commonly, enough that I think it’s sort of sunk into the popular consciousness is this thing about 27 years without recession. As wonderful as that is, that’s really just the start of it. I don’t think people inside or outside of Australia really grasp that.
My wife’s Australian and whenever I say nice things about Australia, she says “No! It’s not like that.” I think that’s a very common viewpoint, but I really do think it stands out.
One of the things I think that colours everyone here, our view about Australia has been the political turmoil and you’ve got a section on that. But I was struck by, that you said, that’s it’s not as bad or our politics are more stable than that of other rich countries. I thought, that’s an interesting paragraph, and then you went on to say insurgent parties are not displaced in the established ones, as in Europe and nor are populist candidates taking control of political machines as Donald Trump has. I thought, yeah, well that’s true but we just keep churning our Prime Ministers.
I got the sense from you that you thought that our political problems are superficial compared to particularly other countries. Is that a fair summary?
Yes. I guess I wouldn’t say they’re superficial but I do see what you’re driving at and I kind of broadly agree. Clearly there is something going on in Australia beyond just the constant change at the top. If you look at all the data on public satisfaction with government, public trust in government. If you look at the two party vote, if you look at all the standard measures that are applied in other countries as well as to how happy people feel about politics, clearly they’ve been gradually becoming disillusioned for several decades now. So it’s not that there’s nothing to worry about there.
I think actually what’s helped Australia and made those kind of dynamics which are similar to the ones in other comparable countries, what’s made those dynamics less damaging is really the political system. You know, compulsory voting, preferential votes – they steer parties towards the centre, and they make it hard, not so much in the Senate, but at least in the House of Representatives, for third parties to break in. I guess it depends what you’re comparing it to. But certainly, compared a proportional system, you end up with fewer parties and therefore more stronger governments, I guess.
Those things have kept Australian politics more moderate in a certain sense, than other countries. The real upheaval, like in America or Britain or France, or any number of European countries, that hasn’t taken place in Australia. But all the spills and the constant changes in Prime Minister, I think that probably has its roots in something slightly different. It’s definitely a worry for the reason we’ve been discussing, right, about policy making. If you don’t have a Prime Minister lasting a full parliamentary term it’s kind of hard to imagine much, really weighted stuff getting done and that’s been the case over the last decade, right? I think in the report I cite some research, obviously it’s a little bit subjective, but counting big economic reforms over the last 30 years and there’s just been far fewer of them in the past decade.
Yes. What people are marching in the streets about at the moment are children on Nauru and climate change, perhaps to a lesser extent. What do you think of Australia’s asylum seekers and immigration policies, which I think you in your piece put them together, immigration and asylum seeker policies. What do you think of those compared to particularly, Europe and the UK?
Yeah, I’m not an Australian politician. I sort of assume the professionals know what they’re doing to some extent, right? It’s pretty clear there’s a consensus amongst at least Labor and the Coalition that a kind of tough policy against undocumented arrivals goes hand in glove with a broadly welcoming immigration policy. I can see the logic of that, but I’m just not sure it needs to be quite as brutal as it is for the boat people. I don’t understand why, for example, once you’ve been judged to be a legitimate refugee you can’t then proceed to Australia. I think the sort of deterrent value of the Pacific solution isn’t hauling people off to Nauru or PNG in the first place, not necessarily keeping them there for the rest of their lives.
I don’t see why it needs to be quite as punitive as it is and you can tell it’s a little bit over the top in the sense that there are these endless sort of nit-picking discussions about whether anybody can go to New Zealand and if they went to New Zealand, what would happen if they came to Australia. I mean it’s just really hard to imagine that someone’s decision about whether or not to get on a boat in Indonesia is motivated by that kind of minutia as a policy. I wish it wasn’t quite so severe, but having said that, Australia admits huge numbers of immigrants and I think that’s a fantastic thing. I wouldn’t want to make it sound all bad.
If there were one or two things you think you could say that the Australian government or Australian policy makers in general, should really focus on and worry about, what would they be?
Well, as you’ve seen in the report, I think the most obvious kind of big kind of policy lapse is climate change. I’ve heard the argument, as I’m sure you have, that it really doesn’t matter what Australia does, and whilst that’s sort of narrowly true, obviously from a moral standpoint, from a kind of leadership standpoint, from the perspective of trying to set an example and get the rest of the world moving in an area that is so obviously in Australia’s interests, it just seems mad not to have come up with a more lasting and ambitious climate policy. I think that’s one. The other thing I highlight in the report is indigenous Australians and how dire the record is there. I was really struck poring over some of the grim statistics and I’m sure you’ve seen far more than I have. But there are plenty of indicators, not just where progress has been slow or targets haven’t been met, but where things seem to be going in the wrong direction most notably around addiction, suicide, incarceration. Where it seems hard to imagine a country as prosperous and well-run in so many respects as Australia, couldn’t do better. Those were the two things I dwelt on in the report.
In fact, you called the condition of the indigenous people a national disgrace, which is quite strong.
I mean I think it is. I don’t mean to pretend that there aren’t lots of different factors and lots of different causes for the poor state of indigenous Australians and I also don’t mean to suggest that governments haven’t been working at this. Obviously, a lot of money has been spent and a lot of policies have been drafted, and it’s a very tricky area. It’s not something that America or Canada, let alone Brazil, you know, handles brilliantly well. But I just think given all the other strengths that I point to in the report in terms of the administrative capacity of Australia, the policy making chops, and the prosperity, it surely has to be possible to do better. I think that’s how I’d put it.
Thanks very much for writing the piece, Ed, and you’ve certainly bucked us all up I reckon, if only for the headline, ‘Dry as a Pom’s Towel’, which was great!
Well, my editor was obsessed with Aussie-isms and I thought he was laying it on a bit thick. So I thought if I chucked in a self-deprecating one, maybe it would seem a bit better! I was looking very hard for a ‘fair suck of a sav’, ‘fair shake of a sauce bottle’, you know, somehow that didn’t happen and I have some personal favourites which didn’t get there, ‘flat out like a lizard drinking!’ That’s another one, but there’ll be other articles.
Good on you, thanks very much, Ed.
Cheers, good to talk to you.
That was Edward McBride, the Asia Editor for The Economist.