When asked to describe Australia’s rebound in employment, CBA boss Matt Comyn used one word: miraculous. It’s hard to argue with that description – from a pandemic that has cost the world trillions and will likely leave visible economic scars for decades to come, Australia has emerged in an unquestionably strong position, light years ahead of other advanced economies.
Of course, there is an argument that much of Australia’s pandemic success can be attributed to its lack of porous land borders and the willingness of its people to endure successive (and occasionally indefinite) metropolitan lockdowns.
The enormous fiscal stimulus unleashed by the Morrison government, and the corresponding unconventional policy measures employed by the RBA, have doubtless played a role – but you would be hard-pressed to find a developed economy that did not take similar steps, with less success. Though ours was one of the largest as a per cent of GDP, countries that have spent similar amounts still face rolling lockdowns and curfews. Success cannot be attributed solely to spending.
The phrase “The Lucky Country” has historically been used in a favourable sense, to describe everything from the character of our people to our ability to avoid the predations of belligerent neighbours. But Donald Horne used it as a pejorative: “Australia is a lucky country run by second rate people who share its luck.”
While Treasurer Josh Frydenberg has said the government is in no rush to embrace austerity, it is still his goal to see a return to “fiscal discipline” and a balanced budget. That does little to confront the problem that Australia faced pre-COVID – extremely sluggish growth stemming from what RBA governor Philip Lowe described as an increasingly less “dynamic” economy.
The stumbles around the vaccine roll-out illustrate this problem handily. With our resounding success in containing COVID-19 – and so no burning need to vaccinate against it – that program has been the victim of a happy-go-lucky attitude that will now see Australia lag significantly behind our developing neighbours.
And so with a “miraculous” recovery comes the assumption that a new era of growth is guaranteed – that businesses, in the aftermath of our first recession in more than 30 years, will take on more risk; that economic scars will fade; and that, in the face of rising geopolitical tensions and the looming threat of runaway climate change – Australia’s lucky streak will continue.
