First the good news
Up there, Europe is looking down the barrel at another recession, and the USA is unable to break free of its staggering economy and soaring unemployment.
Down here, the OECD has forecast a 4% growth in the Australian economy, and unemployment at around 5%. Australia is the best performing developed country in the world.
How did it happen?
It is easy to denigrate Australia’s success as a result of sitting on top of one huge mine at a time when emerging countries, particularly China and India need everything that Australia can produce.
But it is more than that.
Australian governments since 1983 have overhauled the economy, opening it up to deal with competition and to profit from its strengths. Then the combination of saved surpluses achieved and rapidly applied Keynesian economics reduced the impact of the global financial crisis and meltdown in 2008.
By 2003 the effective rate of protection in manufacturing had fallen from 35% in the 1970s to 5%. Foreign banks have been allowed to compete. Airlines, shipping and telecoms have been deregulated. The labour market has been moved from a political wage fixing mechanism to economic rationalism reached through bargaining. Taxes have been overhauled, reducing both company and personal income taxes, and introducing capital gains tax and the GST, taxes that did not inhibit productivity.
Do you want a falafel with that?
Immigration policies have also been overhauled. In the 1940s Australia was about 98% Anglo-Celtic, largely locally born. Now more than 25% of the population has been born outside of Australia, coming from over 120 different countries. This is a figure comparable only to that of Israel. European countries appear to be torn and challenged by demographic movements. Countries such as Belgium, France, Netherlands and UK struggle to deal with an immigrant population of around about 10%. Resentment, racism and riots proliferate. In comparison Australia has had a relatively peaceful ethnic cohabitation, if not mixing.
High level immigration has fuelled the economy and now contributes in excess of 350,000 people every year to the population. This figure is not the misleading figure of immigration targets set by the government, but represents the net gain of people coming into Australia every year to work and live, over those who leave. For these people, no matter how long they stay, infrastructure has to be provided for them and those who will succeed them.
At Hillman Laxon Tobias we are lawyers and migration agents. Feel free to contact us at any time for further information, on Australian Work Sponsored Visa or Employer Sponsored Work Visa including an estimate of professional costs.