Euromoney magazine’s decision to give Australia’s Treasurer Wayne Swan their “Finance Minister of the Year” award has been met with much derision in the media, on blogs and on Twitter. However, in many respects Australia is indeed extremely well placed, in no small part due to Mr Swan. Craig James, chief economist at CommSec, has put out some numbers which contradict the general air of derision with which Australia’s current economic position is held.
Of course as expected, Australia’s current economic position has a lot to do with the rise of China and its increasing dominance of our exports. But some may not realise exactly how much China’s command of our exports have exploded in the last ten years. This is shown by a graph supplied by Commsec.
Furthermore, as this image shows, Australia has not experienced a recession in the past 20 years. In Fact, the only two quarters which have seen negative GDP growth during Mr Swan’s tenure can easily be attributed to the GFC and the recent natural disasters. Of course as always much of this can be attributed to China, but economics and trade does not play out in a vacum, Mr Swan deserves more than a little credit.
Furthermore, despite tumbling share and housing markets, the average wealth of Australians is actually at a record high. Of course as usual much of this can be attributed to China, however no small part can be also be attributed to sound economic policy throughout the seemingly continuing Global Financial Crisis. As shown by this graph, the per capita private wealth of Australian’s is actually higher than pre GFC levels.
Now we get to the crux of something to which Mr Swan definitely deserves the lion’s share of the credit. Contrary to fear mongering on twitter, blogs and in the media in general, Australia’s government debt is actually incredibly low as compared to other developed economies. In fact as this graph shows, when compared to the likes of Japan and the United States, Australia’s government debt is so small as to be rendered meaningless.
In short, while Australia’s current economic position is in no small part due to a myriad of factors both in and out of our collective control, it is also a very large part due to sound governance by Mr Swan. It is ludicrous to insinuate that he does not deserve this honour when Australia is in such a wonderful financial position as compared to almost every other developed economy. It is impossible to pin down the exact reasons for our current position, however one thing is certain. Wayne Swan has not done a bad job.
Further reading: Economy page at Commsec