Australia, the Plodding Underperformer

Australia, the Plodding Underperformer, by Alan Moran.

By 1913, the Western world’s living standards were two- to tenfold those of the rest of the world. … Fast forward to 1973 and this picture had not markedly changed.  …

By 2016, Western nations (now joined by the “Asian tigers”, South Korea, Taiwan, Hong Kong and Singapore) had per capita incomes in the $30,000-53,000 range. Some of the former Soviet satellites were approaching that level, which was double that seen in Latin America. Income levels of China ($12,500) and India ($6,100) were on rapid growth trajectories. …

Many countries, like Haiti and a range of African basket cases (described by President Trump as being “questionably run”), continue to have real income levels that are only four to five per cent of those of the US. Such countries are presently incapable of internally generating economic growth and, understandably, place a priority on extracting funding from wealthier countries. …

Australia:

BHPIO iron ore train arriving at Port Hedland, Western Australia

Australia prides itself as having achieved more solid growth over the past four decades than most of other developed countries, but that growth is hardly spectacular and is fuelled by our having become the source of raw materials for the Asian growth stories. There is also a mounting hostility to growth based on resource use on the part of the urban population.  This is reflected in the influence of the Greens and, to some degree, the ALP and has resulted in growth-inhibiting regulatory policies including:

  • Hostility to the development of and over eagerness to tax coal, gas and other resources, which are the nation’s most important exports
  • Determination to ensure the destructive substitution of high cost, unreliable wind and solar for low cost reliable coal for electricity generation
  • Measures that restrain the use of water for farming in Australia’s most important agricultural province, the Murray Darling, and in building new irrigation facilities and preventing land clearing in Queensland

Added to these are other measures suppressing our prosperity including:

  • The chronic inability of government to wind back expenditure programs once set in train, with a consequent reduction in labour and capital resources available for productive ventures
  • An industrial relations system that is especially vulnerable to trade union and government pressures to require wages and conditions which exceed the productivity levels that can support them
  • An education system that is focussed upon equality of outcomes rather than the promotion of excellence and which has been redirected away from school training in basic three R skills in tertiary institutions from engineering and the hard sciences
  • Wasteful spending, pandering to political fantasies, best exemplified by the decision to convert French nuclear submarines to less effective diesel power …

Per capita, the 25 million Australians are sitting on the most valuable natural resources in the world. As custodians we probably should have performed much better — after all, our natural wealth is not matched by our income levels — and the pressures that have led us to performing below par in economic development are becoming more prominent.