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The Forum > Article Comments > The world's best economies, past, present and future > Comments

The world's best economies, past, present and future : Comments

By Alan Austin, published 26/3/2014

The new formula will also be directly applicable in the future: how will Australia rank after a full year of Coalition government? After three years? Beyond?

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Ludwig, just standing there, waving your arms around and expostulating doesn't cut it.

>>Holy snapping duck poo Pericles? Open ye eyes!! It’s everywhere around us! Ohmygoodness! I’m speechless. My poor head! Now it’s REALLY spinning! <<

So what exactly are you complaining about? Too much investment, or not enough investment?

>>Well of course [lack of planning is the problem]. And the rate of population growth and the ultimate size, for a town, city, state or the whole country, are surely two of the most fundamental factors in developing those plans.<<

Absolutely. So we are in agreement. If a city is growing faster than its infrastructure, then there is a failure of planning. It is not the growth that is the problem, it is the lack of planning to cater for that growth. As you point out, it doesn't just happen by itself, does it?

>>...my idea of forward planning could possibly maybe be to strive to greatly reduce population growth in places like Sydney where the water supply capability is not guaranteeable in dry times?<<

That is simply perverse thinking, Ludwig. If your city is growing, you plan to keep water supply ahead of that growth. Which is why Sydney now has a desalination plant, ready for the next drought. That's called planning.

Your concept of planning - reduce population growth - is simply a curtailment of personal freedom, which you seem to be hooked on.

>>So……. the incredibly stifling congestion in Sydney is ok by you.<<

Compared with other major cities, particularly in our region, we have the barest minimum of congestion, and then only in rush hour. You may think of it as "incredibly stifling", but that is probably because you don't get out much.

>>...of course, they aren’t cities to you – they’re just large country towns!<<

Correct. Cities are major population centres, these are not. And at the risk of being disloyal, Sydney doesn't actually qualify either as a big city.

Do some research. Check out why cities are the key contributors to the wealth of a country. Start with China, you could learn something.

http://www.economist.com/news/leaders/21599360-government-right-reform-hukou-system-it-needs-be-braver-great
Posted by Pericles, Saturday, 29 March 2014 12:27:54 AM
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How good was Australia under Labor?

Well, according to the only poll that counts, the 2013 federal election, not really that good. That is that is why it was voted out with Labor falling well behind as the preferred economic manager (Newspoll).

Were the people wrong? No, and silly comparisons of international data will not prove otherwise.

There are a whole lot of reasons why the wider electorate support change, but we will see how events play out.

The answers are tough, but more of the old Labor (2007-13) would not have addressed Aust's various economic shortcomings.

It's a competitive world, and one can hope we remain one of the best countries in terms of balancing wealth creation and being compassionate, but who knows what the future will deliver.
Posted by Chris Lewis, Saturday, 29 March 2014 10:36:14 AM
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Sure, Aust could have led the world for years to come on a whole range of criteria mentioned by some. With such a low level of public debt, options are out there to just spend, spend for a while yet.

But, as lost on some, the majority of Aust's said to hell with that. They said we need to address high business and labour costs, regardless of an awareness that social spending would be cut.

There are some huge issues ahead, and I have more hope that the Coalition will address them, but again who knows what the future will bring.

But, would the majority of Austs say that things were going great under Labor, even looking back in 3 years time? I doubt it very much.

I suspect this is more the stuff of Labor diehards and people who live a long, long way away who really have no idea at all. That is why some rely more on international data to supposedly tell a story about how well we were going
Posted by Chris Lewis, Saturday, 29 March 2014 11:08:04 AM
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The very best economies, face a certain boom or bust reality, that remains cyclic.
Ideologues, limit their and therefore our options by thinking within a limited circle of often very flawed or highly selective ideas.
Every western style economy rests on just two support pillars, energy and capital. And those relying on outside sources for either are in the most vulnerable and precarious economic positions.
Meaning, the more we pay for energy and everything that depends on it, (food, transport) the less there is for discretionary spending.
We have the highest median house prices in the English speaking world!
Again, the more we spend on rent or mortgages, the less there is to spend inside the real economy.
The so called wealth in our higher priced housing, is a false positive, particularly, when one needs to sell and then replace former housing, with something that caters for a larger family.
Today, we in Australia, import 91% of our oil needs, and at a cost of 26+ billion per and rising!
Those imports create four times more total carbon, from well head to harvester, than what lies beneath our feet!
Our economic success in the period referred to, was bought and paid for, by previous surpluses, created for the most part, by huge economic growth in China, rather than Howard/Costello's, so called economic management. And by debt.
Paying down that debt is made harder, by shrinking tax receipts, and a non mining economy, still going backwards.
One doesn't have to be Nostradamus, to see, we confront a period of future economic downturns and stagnation.
What might help us avoid the worst aspects, is greatly increased house building, and replacing energy imports with indigenous supplies; and quite massive tax reform and simplification, that in the first instance, shuts down all avoidance!
Just this much change would allow us, to avoid economy harming austerity!
However a rosy picture you paint Alan, no nation can borrow its way to prosperity, particularly, where those borrowings are used to service debt or recurrent spending!?
Rhrosty.
Posted by Rhrosty, Saturday, 29 March 2014 12:20:58 PM
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Hi Alan, it shouldn't matter how Chile was managed before the GFC, what should matter is how it has been managed since the GFC. And over that time their economy has basically doubled in size. However, the claim that it was poorly managed before that doesn't stack up as in the six years before that it grew by about two-thirds. This graph illustrates that http://www.tradingeconomics.com/chile/gdp.

Chile embarked on a free market experiment in the 80s, and it took some time to work, but it has, as you can see from this graph contrasting Chilean growth with South American growth in general. The structural adjustments were initially tough, but started to pay dividends around 1991 when the economy really took off. http://en.wikipedia.org/wiki/File:GDP_per_capita_LA-Chile.png

Chile is now presenting us with a natural experiment. A very left-wing government, advocating the sorts of policies you seem to advocate, has just taken over promising to reverse 35 or so years of economic policy. How long will it take before Chilean growth tails off, or will it survive the socialists? This will be a much better test than your index of whether merely spending money you don't have, which is what Labor did over the last 6 years, amounts to good economic management, or whether it is a little more sophisticated than that.
Posted by GrahamY, Saturday, 29 March 2014 1:50:19 PM
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Chris Lewis
Those of us who find economics arcane but who nevertheless try from time to time to understand what brawling commentators are saying usually slink away defeated. In your case, how can you accept that Australia has "such a low level of public debt" when the Coalition is doing its best to persuade us that we have such a huge debt that only it can be trusted to manage it? Are you distinguishing between public and private debt and if so what are do you want us to infer about the difference? Are you saying, for example, that it is not "public" Australia — that is, Australia the nation — that has a huge debt but only private Australian businesses?

How can you so lightly dismiss all "international data", as if it's somehow non Australian and therefore irrelevant to us, when what international data does is compare the performances of all countries, including Australia. And if you are implying that the available "international data" somehow gives a false impression of our economic performance, could you please explain, with examples, how and why it does this, and, if you have some in mind, list for us other measures of the comparative economic healthiness of different countries which would show not only that Australia is not the economic envy of other countries, as widely believed, but that it is in fact doing poorly?
Posted by GlenC, Saturday, 29 March 2014 2:33:02 PM
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