The wonder from down under
I write from Perth, the resources capital of Australia, and the powerhouse of the economy.
A year on from the financial convulsion unleashed by the collapse of Lehman Brothers, it seems a fitting enough place to write about how Australia has managed to avoid a technical recession, just as it did during the Asian financial crisis in 1997 and the dot.com bust in 2000.
The June quarter saw 0.6% growth, which means that the Australian economy has expanded by 1% in the first six months of the year. Some economists are calling it the 'wonder from down under,' and this performance is all the more impressive when you consider that Australia is now entering its 19th year without recession.
But I wonder whether Perth really is the most appropriate place to compose this blog. For while the resources sector has helped buffer Australia from the worst effects of the global downturn, there are other, more important, reasons why the country has avoided recession.
Perhaps I should be writing this from outside the Reserve Bank of Australia, in the heart of Sydney's central business district, since the central bank's aggressive policy of slashing interest rates has been fittingly central.
Perhaps it should come from the steps of the Treasury Building in Canberra, where the Rudd government produced its multi-billionaire dollar stimulus packages - or 'fiscal Viagra', as some have taken to calling them.
Perhaps it should come from any number of suburban shopping malls around the country, since it is domestic consumption, more so than mineral exports, which chiefly explains Australia's continued economic expansion. Australians spent their hand-outs from the government. They responded to the global downturn by going shopping.
Who else deserves the credit? Reaching further back into economic history, you could argue that the successive governments which tightened up the regulatory framework governing the banking system played a key part. After all, there was no need for any bail-outs of Australian banks.
Perhaps you could dispatch a herogram to the former Treasurer, Peter Costello, whose fiscal prudence meant that Australia was cashed up when it went was hit by the downturn, which meant the Rudd government could spend its way out of trouble.
Now the debate in Canberra is over whether the stimulus packages should be pared back, to limit the national debt. For the Rudd government, this will be a matter of very careful political and economic calibration. Moreover, a hike in interest rates could now come before Christmas.
Forgive me for returning to Donald Horne yet again, but this does revive the old Lucky Country argument: that so rich is Australia's endowment of mineral resources that it will always compensate for the paucity of political leadership.
But it seems to me that many of the factors which have delivered 18 years of consecutive growth are man-made rather than God-given. Above-ground strategies and solutions have arguably been just as important as the country's below-ground treasures. In other words, Australia has made a lot of its own luck.
Australia is not basking under entirely cloudless skies. Unemployment will probably continue to rise for a while, and there are fears still that a housing bubble is about to explode. The booming education sector - which, after coal and iron ore, is Australia's third biggest export - could be hammered by the Indian student crisis.
But over the past twelve months, the Australian economy has performed better than any other advanced economy. So who should take the credit?
UPDATE: Thanks for weighing in on the Opera House, and Blues Point Tower, one of Harry Seidler's less successful buildings which overlooks Sydney harbour. Bren54 raises Robin Boyd's Australian Ugliness, which was one of the Oz-loathing books that seemed particularly fashionable at the start of the 1960s. Was Rolf the first to perform in the concert hall, asks Whitlamite? Of course. For the record, Sir Charles Mackerras, and a full programme of Wagner, came the following night. He performed alongside Birgitt Nilsson, a Swedish soprano who should not be confused with Sylvester Stallone's second wife.....
I'm 
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