Alan is right that Australia survived the global financial crisis far better than most countries, but it is hardly due to superior economic management. Australia has enjoyed an unprecedented surge in its terms of trade in the past decade as a result of its close economic relationship with China. Without China, we would have endured a severe recession, like almost every other developed country.

Most countries responded to the GFC just as Australia did with cash handouts, infrastructure and monetary stimulus. It has less effect in Europe and the USA because the depth of the crises there was so much greater, and has left them with huge debt overhangs that will act as a drag on growth for years to come.

Australia also benefitted from entering the global crisis with a comparatively low debt to GDP ratio thanks to years of surpluses. This meant it could afford to spend up when the crisis hit.

Leading Australian economists like Saul Eslake, Chris Richardson and Ross Garnaut have very similar interpretations of Australia’s recent record – it is down to good luck more than good judgement, Governments have squandered the opportunities of the resources boom, the budget should be well in surplus at this stage of the economic cycle to prepare for the inevitable slowdown, and clawing back into surplus is going to be a long and difficult process.

Hello. Interesting discussion. Thanks.

@Rhrosty, re: “Just because we are not quite a basket case economy, is hardly a comfort.”

No. You're as far from a basket case as any nation has ever been.

Re: “Just because we compare favourably to basket case economies like Japan …”

No. Australia now rates better than any economy ever.

Re: “Formerly profitable service industries are doing it tough ...”

Correct. Some are. But not all. Remember, it's the worst economic downturn since the 1930s.

Re: “Doing what you've always done while expecting a different outcome is madness.”

Maybe. What different outcome do you want, Rhrosty? You're travelling superbly at the moment given the conditions. No?

Re: “It follows therefore, we need to do something different.”

Why? Why not accept being the best-managed economy in the history of the world?

Agree with most of your other observations, Rhrosty. Especially on Howard's welfare for the rich and negative gearing. Thanks.

@James O’Neill, Re: “The kindest thing … glass half full approach to economic data, often at the expense of accuracy.”

Not sure, James. An example of inaccuracy?

Re Norway, James, there are about 30 different economic variables. You have selected eight, of which seven are in Norway’s favour. Australia’s GDP growth is actually higher – and more consistent.

On a couple of others, Norway is also ahead – the Gini index and government bond rate. On others the nations are equal – job participation and international credit ratings.

Where Norway settles in fourth place in the world is that taxes are high – 43.2% to Australia’s 25.6%. GDP growth has been patchy since 2008 with nine negative quarters since January 2008 to Australia’s one and a bit, government debt is higher, productivity is much lower, retail sales are negative, interest rates are too low and economic freedom is lagging badly.

The next quarterly figures may be better. Norway is definitely improving.

Re: “The current government has some blind spots and its taxation policies would have to rank high on any list of areas overdue for reform.”

Agree with this absolutely. Thanks, James.

Cheers, AA

I am really surprised people are still reading this blokes output.

From what I read a while back he is on Gillard's payroll. You couldn't write such garbage unless well paid for it.

Hello. Further responses briefly:

@David G: “According to Austin, Australia is the Promised Land.”

Correct. The best-managed economy on all indicators.

But like the ancient Israelites, you will still experience wars, famines and enemies within.

Re: “I'm trying to decide whether to accept 4.45% on my investment money ...”

Lucky you, David! Only Australia and Poland have had interest rates in the optimum range between 2.75% and 5.0%. since 2009.

We're getting 1.2% here in France. The Euro Zone official rate is 0.75%. Norway has 1.5%. Switzerland has zero!

Remember this is the world’s worst crisis since the Great Depression, David.

@Rhian, re: “Without China, we would have endured a severe recession, like almost every other developed country.”

No. The data does not support this. Other countries also export heaps to China - the USA, South Korea, New Zealand, Russia and Japan. None of these averted recession.

Brazil has strong iron ore exports but went into recession in 2009 along with most other ore exporters. Has barely recovered since.

Re: “Most countries responded to the GFC just as Australia did with cash handouts, infrastructure and monetary stimulus.”

Yes and no. No country responded with the speed, quantum and direction though, did they?

Re: “It has less effect in Europe and the USA because the depth of the crises there was so much greater …”

Correct. But why was the crisis so much greater? And why was Europe not impacted evenly? Poland is an intriguing case study, as alluded to in the piece.

Re: “Australia also benefitted from entering the global crisis with a comparatively low debt to GDP ratio thanks to years of surpluses.”

No. Another myth. If valid, then other nations with little or no debt should also have done well through the GFC. And nations deeply in debt would have done poorly.

No such correlation. Several countries which emerged safely from the GFC went in with huge debts at the outset - Israel, Switzerland and Singapore.

In contrast, Spain, Finland, Iceland and Chile all had modest debt and budget surpluses in 2008 yet suffered severe reversals.

Cheers, AA

Alan, I chose a limited number of indicators because they illustrate a point within the word limits imposed by olo in the comments section. They were economic ones but I could equally have chosen social indicators and by most objective measures they place Norway in the top half dozen nations.

It is true that taxes are a bigger percentage of GDP than Australia. But my question would be: what do you get in return? A world class free hospital system; a world class free education system; financial security upon retirement; very low crime rates; superb public transport etc etc. Of course I winced looking at each month's pay cheque, but I also knew that I was free of worry. Taxes are aimed at such items as smoking and drinking. Personal income tax compares favourably with most OECD nations.

Norway opted to remain outside the EU in two referenda. In hindsight that looked like a good decision. They also have an electoral system that gives proportionate representation to the voting public, unlike Australia which thinks it has a good system but like a lot of such beliefs sadly lacks a rational basis.

The late Donald Horne said that Australia was "the lucky country". That is the bit Aussies like to quote. Horne went on to say however, that it was a country run by second rate politicians who share its luck. Never was a truer word said.

AA can never be knocked out by logic. He is one of those people who thinks he knows everything. He will always come back with his arrogance.

Now i being honest here - I believe he is one of the silliest authors that have ever been published in terms of his commentary on economic matters.

But he is indeed good for a laugh.

He has the audacity to criticise Murdoch papers and journalists, but it is he that is an absolute joke.

If he ever got a job working for Labor i would indeed piss myself laughing.