SURVEY: AUSTRALIA

Third time lucky

Sep 7th 2000
From The Economist print edition

Australians reckon their economy has entered a third golden age, even more promising, and more sustainable, than the previous two. They should use it wisely, says Barbara Beck

“THE lucky country” is a label that has stuck to Australia ever since Donald Horne, one of the country’s best-known social critics, wrote a book of that name back in 1964. The book gained instant fame and is still regularly reprinted. But Mr Horne has been much misunderstood. Far from praising his country, he was trying to shake it out of its complacency. Australia had been fortunate in its natural endowments, he was saying, but it lived on other people’s ideas, and its leadership was second-rate. If things went on as they were, its luck could not last.

With the world about to descend on Sydney for the Olympics, and Australia’s 100th birthday as a nation coming up at the beginning of next year, the country has been engaged in yet another bout of its favourite sport of all, navel-gazing. Its conclusion has been deeply gratifying: that things have indeed not gone on as they were, but taken a decisive turn for the better. Indeed, many Australians like to think that their country has entered a third golden age, to match the mineral-rich heydays of the second half of the 19th century, and the post-second-world-war boom fuelled by other countries’ reconstruction. What is different this time round, they say, is that with careful management the new golden age should be sustainable indefinitely.

The main cause of this new confidence is Australia’s recent success in rebuilding its economy. The country may no longer be quite the “working man’s paradise” it was in the late 19th century, when for a long stretch it was the richest in the world per head of population. But it is now comfortably ensconced among the 15 most affluent countries (see chart 1), and income inequalities, though widening, are still smaller than in most comparable places. Australian pay is not particularly high by the standards of the better-off developed countries, but nor is the cost of living, and there is a reasonably generous welfare system. Even the good old Aussie “battler” with an ordinary sort of job, a mortgage and two kids is able to lead a fairly comfortable life.

After a series of reforms over the past 15 years to make the economy more competitive, the place now seems to be running like clockwork. Growth has hovered around 4% or more for the past seven years, productivity has improved beyond all expectations, inflation is relatively quiescent, and unemployment is heading downwards. All this continued even as South-East Asia next door went through a severe economic crisis. The only obvious ill effect the crisis had on Australia was a deterioration in its current-account balance, which nobody takes too seriously, and a fall in the Australian dollar, in which other factors also played a part. That may be bad for the national ego, but it is making exporters’ lives easier.

More work, less play

Inevitably there has been a price to pay. To become more competitive, the famously laid-back Australians are having to work harder. When Rudyard Kipling visited Sydney in 1891, he found it populated

They are indeed doing wonderful things now, but Sydney’s or Melbourne’s gleaming central business districts are packed with the same sort of smartly besuited, mobile-phone-toting, stressed-out people as New York, Tokyo or London. Australians may still be better than most at enjoying themselves, but they have less time for their pleasures, and sometimes “mateship” loses out in the struggle up the greasy pole. The old Australian dislike of “tall poppies” (annoyingly clever, hard-working and successful folk) is fading as more people get the chance to become tall poppies themselves.

Living in a more competitive society has also forced Australians to reconsider their prejudices. Australian men have had to update their attitudes to women, who have crowded into the labour force and are earning their own money. There is more tolerance towards minorities, such as gays. But best of all, Australia has become a much more multicultural society. Gone are the days of the “White Australia” policy when immigrants were carefully selected by the colour of their skin. Now entry depends on qualifications, skills, age and the ability to speak English. Information-technology specialists, accountants, nurses and chefs will get a warm welcome, no matter where they come from. There are also slots for the close family of those already settled in the country, and bona-fide asylum seekers. A quarter of today’s Australians were born overseas, in an astonishing variety of places, and increasingly in Asia. Most Australians now seem comfortable with the idea of a racially mixed country.

It did not seem like that when Pauline Hanson won a Queensland seat in the 1996 general election, campaigning as an independent against immigration, free trade and special treatment for Aborigines; and even less so when her One Nation Party gained 8% of the national vote in the 1998 election. But support for One Nation dried up quickly. Mrs Hanson is no longer a member of parliament, and the most visible thing she has recently done is to publish a cookery book. In retrospect, the biggest part of her appeal may have been not so much her immigration policy but her stance on Aborigines. She struck a chord with less-well-off Australians who felt that the money spent on Australia’s indigenous people was out of proportion to their numbers (about 390,000 out of a population of 19m), and that they were losing out as a result.

Australia has struggled to find a modus vivendi with the Aborigines, who were appallingly treated for most of the time since the first settlers arrived in 1788, and not recognised as Australian citizens until 1967. Their cultural beliefs and their strong links to the land do not easily fit in with modern individualistic lifestyles, and many of them find themselves at the margins of society. There is now a strong movement for reconciliation, but it is not yet clear what form this may take, and some Aborigines dismiss the whole idea as “white man’s therapy”.

What Ms Hanson tapped into very successfully were apprehensions in rural and regional (ie, urban but non-metropolitan) Australia, which city slickers rudely refer to as rara-land. The people who live in those parts of the country have neither clout nor weight of numbers. For all its rugged outback image, Australia is a highly urbanised country, with 85% of its population concentrated in cities, towns and suburbs. Many rural Australians feel, probably rightly, that the affluence so evident in the country’s main population centres has passed them by, and want to be given a “fair go”. People out in the bush are against globalisation and free trade because they reckon it eliminates their jobs, and want to see more money being spent on rural roads, schools and medical services. In political terms they are conservatives: the “bush” vote was an important factor in stopping Australia from becoming a republic in last November’s referendum. But their apprehensions are sometimes expressed in unexpected ways, as in last September’s state election in Victoria, where their vote helped to remove a government made up of the conservative Liberals and their National Party coalition partners. The coalition’s brand of conservatism had proved too radical for their tastes.

Distance no object

In one important respect, though, life in recent years has been getting better, both for rural and regional Australians and for the country as a whole: keeping in touch with other people has become much easier. One of Australia’s defining characteristics has always been sheer distance, both within the country itself and to other places, but that “tyranny of distance”, a phrase coined by the Australian historian Geoffrey Blainey, has now been largely overcome.

There have been many landmarks on the way. When in 1872 the first overland telegraph line from Alice Springs to Darwin was connected up to Java in today’s Indonesia, linking it to the main network, the speed of communications between South Australia and Britain suddenly leapt from many weeks by sea to just a few hours by wire. When telephones first arrived in rural Australia—heavily subsidised to ease the cost in a huge and thinly populated continent—they made an enormous difference. Practically every Australian household now has one. Television, too, has provided a welcome window on the world, though it is not interactive.

Now the rapid advance of the Internet is making it possible for more and more Australians, from schoolchildren to pensioners, to communicate both ways and conduct business inside or outside Australia, any time they like and for next to nothing. Of course distance has not been eliminated altogether—moving around physically still involves long trips by road, train or air—but Australians now feel much less remote, both from each other and from the rest of the world. They also feel less hedged in because they have become more affluent.

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