How Australia’s economy is among the most successful

29 Oct 2018

Australian economyWhat makes Australia such a successful country? Many-a-time, the country’s accomplishments are either forgotten or ignored, but many countries ought to learn a thing or two from the land down under.

In a magazine article titled: “Aussie Rules: What the world can learn from Australia”, The Economist pointed out Australia’s successes, and what can be learnt from in order to benefit other countries around the world.

Ongoing concerns regarding median incomes, public debts and immigration levels have caused disturbance among Western politicians, to whom the idea of an affordable welfare state, manageable immigration levels, rising incomes and a low public debt – and achieving success in all such sectors – seem anything but realistic.

However, despite Australia attracting less attention, the country boasts a combination of all desired sectors mentioned above. Its economy is perhaps the most successful in the rich world, having grown consistently for 27 years, without a recession. This in itself is already a record for any developed country, and one must acknowledge that it is almost three times what Germany has managed, with a median income that has risen four times faster than that in America, and a public debt amounting to less than half of Britain’s.

There are, of course, several reasons as to why this is the case. Natural circumstances – such as the country’s iron ore, natural gas and proximity to China – have helped. Policymaking plays a big role too, however. After the 1991 recession, the health-care and pensions systems required changes which resulted in the middle class paying more. Therefore, Australia’s government spends just half the OECD average on pensions as a share of GDP, and the gap is set to continue widening in coming years.

Australia’s approach to immigration is also among its best accomplishments. 29% of those inhabiting the country were born outside of it, with this percentage amounting to twice that of the United States. The Economist notes that half of Australians are either immigrants themselves or children of immigrants, and Australia’s two main parties both perceive skilled migrants as extremely beneficial to the health of the economy. This is a very different opinion to that shared in America, Britain or Italy – where a far lesser inflow has generated hostility and chaos – or in Japan, where allowing foreigners to settle in any number is a political taboo.

Of course, Australia’s achievements come with their own disadvantages too. Despite the country’s open-armed welcome to immigrants who arrive through normal channels, those who arrive by means of a boat without the proper paperwork are generally sent to remote islands in the Pacific which offer a low quality of living. Additionally, Australia ceases to undertake certain reforms – with global warming not being tackled efficiently.

Even so, Australia’s successes could be used to learn a thing or two from. The country is an example to governments elsewhere that perceive certain reforms as impossible – as they are, in fact, perfectly achievable.