April 2019 marks the tenth anniversary of Australia first achieving "world’s best economy" status. Alan Austin concludes his two-part retrospective which seeks to counter the myth of the Coalition as "best economic managers" mantra.
[Read Part one here.]
THE COLD, hard facts show Australia’s economy in April 2009 was the world’s best. Observers worldwide have affirmed this. In 2016, IA quoted 14 authorities hailing Australia’s extraordinary success in managing the global financial crisis.
They included former Treasury Secretary Dr Ken Henry, UNICEF’s Bruno Martorano, former UK Prime Minister Gordon Brown, former U.S. Treasury chiefs Henry Paulson and Timothy Geithner, Nobel Prize winner Professor Joseph Stiglitz and several other academics.
Since those analyses, more have been published and the file of accolades for Labor’s economic decision-making has expanded.
Here, by way of wrapping up the tenth birthday of the world’s best-performed economy, are several more acute observations. These provide a timely antidote to mendacious media claims that continue to denigrate Labor’s record and cover up the failures of the Coalition.
Prime Minister Kevin Rudd and Treasurer Wayne Swan ... saved the country. Australia was the only developed nation not to go into recession during the global financial crisis but the ignoble response from Opposition leaders Malcolm Turnbull and Tony Abbott (who soon replaced him) to the stimulus and borrowing required sowed the seeds for the difficult times the country now faces.
~ Pádraig Collins, Irish economics writer, 2017
The great merit of the (Labor) government was to adopt a strongly counter-cyclical fiscal policy stance. The fiscal expansion that started in 2008 was the right move at the right time … There are simply no empirical foundations to the statement that Rudd and Gillard mismanaged the economy. In fact, the data tell exactly the opposite story.
~ Fabrizio Carmignani, United Nations economist, 2013
‘Australia has navigated the global recession brilliantly ... there's no other developed country that's done half as well. If you made a list of the developed countries that have done well in this recession, Australia is at the top.’
~ Anirvan Banerji, Economic Cycle Research Institute, New York, 2009
‘I hear good things about the way Australia is being run and running. You just had your financial genius just got a nice award, he was voted the best [treasurer] in the world at this time.’
~ Donald Trump, 2011
‘Is it a waste if people use the stimulus money to pay down debt instead of rushing to the shop? No, it's a helpful step because it allows people to repair their personal finances so they are closer to being able to start spending again ... In other words, the money was well timed and was indeed offsetting the downturn.’
~ Deutsche Bank's chief economist, Tony Meer, 2009
‘Although some of the details of these fiscal stimulus packages have since been the subject of domestic political criticism, international organizations such as the International Monetary Fund and the Organisation for Economic Cooperation and Development (OECD) have praised Canberra’s response.’
~ Lowy Institute for International Policy director Mark Thirlwell, 2017
‘Even though many countries moved quickly to enact large fiscal stimulus packages, these packages generally have not had a strong effect in cushioning the initial decline in employment caused by the crisis, although Australia is a notable exception.’
~ John Martin, OECD employment director, 2009
‘Too few of the people blathering on about the stimulus spending understand that need for compromise and the clever way Rudd and Treasurer Wayne Swan tackled it ... it is not surprising that, in the OECD’s review of the stimulus applied by the developed countries, it judged our efforts as among the most effective.’
~ Ross Gittins, economics writer, 2009
‘The effectiveness of our stimulus was due to both the size of its measures and the speed with which they were introduced. The targeting of households and schools (on which work can be undertaken rapidly) also contributed to the speed of its effect. So it seems the design of the stimulus is critical.’
~ Christopher Stone, research director, Centre for Policy Development, 2013
... the decisions that Swan has made as treasurer, before during and after the global financial crisis was officially over certainly contributed to Australia’s good records. If Australia’s performance had been as bad as other economies, Swan would have certainly copped the blame for it. So the fact that we avoided dashing ourselves on the rocks, he’s entitled to claim some of the credit.
~ Saul Eslake, Grattan Institute program director, 2011
‘The Australian Treasury estimates that without the stimulus packages the unemployment rate would have been forecast to peak at 10 per cent rather than 8½ per cent. With the stimulus, there are estimated to be up to 210,000 more people with jobs.’
~ Dr Steven Kennedy, Treasury General Manager, 2009
‘Had the stimulus measures been poorly targeted, no amount of surplus would have helped. And the reality is the stimulus measures worked pretty much as they were expected to ... you had Australia’s economy continuing to grow while the rest of the world was on the on the floor wondering if anyone got the number of the truck that had just hit it.’
~ Greg Jericho, economics analyst, 2016
It’s now been 25 years since Australia had a recession. We came damn close in 2009 but avoided one thanks to the timely actions of the Reserve Bank, Kevin Rudd and Wayne Swan. We like to bag our politicians, but a quarter century without knowing the misery, the dislocation and waste of human life that comes from high unemployment is something to be very proud of.
~ Bernard Keane, Crikey senior politics reporter, 2016
‘Australia's high level of political stability and governance is maintained, which supports the country's attractive business climate ... Australia has remained one of the strongest performing economies in the AAA universe since the global financial crisis began’.
~ Fitch credit rating agency, London and New York, 2013.
For the record, Australia’s economy was ranked as follows by the IAREM over the last 12 years:
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