Javier Milei’s anti-socialist revolution holds lessons for Australia. By Adam Creighton in The Australian.

Milei’s party won almost 41 per cent of the vote on Sunday, compared with 32 per cent for the main left-wing opposition party Fuerza Patria, which favours the economic policies of the Perons and Kirchners, which had turned Argentina into an economic basket case over successive generations.

Since 1950, Argentina has spent more time in recession than any other nation …

Milei has already demonstrated rapid cuts in government spending need not prompt a recession, as most economists in Australia would immediately suggest should even modest pruning be proposed Indeed, for the first time Argentina is providing economic lessons to the world that stagnating Australia should heed.

Compare: 18% vs 27%:

The Argentine economy, which has minuscule net immigration, is expected to grow between 4.7 and 5.5 per cent this year, according to the International Monetary Fund, compared with only 1.8 per cent in Australia, where mass migration is the order of the day. Milei has slashed Buenos Aires’s fiscal footprint from around 26 per cent of GDP to 18 per cent in two years, achieving the first balanced budget since 2009 on IMF figures wholly through reductions in spending.

Meanwhile, Canberra’s fiscal footprint is headed toward 27 per cent of GDP. …

So, listen up:

Milei has slammed net zero as a “socialist lie”, while Australia has embraced it as quasi state religion. Argentina embraces nuclear energy, while our government outlaws it.

 

 

In December 2024, Milei announced an as yet unlegislated simplifying reform that would abolish 90 per cent of Argentinian taxes. Former Treasury secretary Ken Henry recommended a similar change in Australia in his 2010 tax review that continues to gather dust.

A century ago Australia and Argentina were among the richest nations on Earth; Melbourne and Buenos Aires among the two most prosperous cities. While Australia embraced free markets Argentina opted for socialism and paid dearly. Its GDP per capita, as a share of US GDP per capita, fell from almost 90 per cent to 30 per cent.

Let’s not swap places in the 21st century. Australia, thankfully is a long way from embracing anything like Peronism but the political class is showing worrying signs. Perhaps it’s no surprise underlying inflation remains stubbornly high at an annualised rate of more than 4 per cent, while Argentina’s has plunged from almost 290 per cent last year to around 32 per cent.