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The economic challenges ahead

By Alan Austin - posted Tuesday, 26 November 2013

Having the world's best economy should be great news. But it does present challenges to a new government.

Australia's incoming ministry faces three awkward realities. First, they must now admit that some of their assertions about the state of the economy in recent years may have been exaggerations. There is no "budget emergency". Australia is not "drowning in debt". And the path to surplus during the worst downturn since the Great Depression will be uphill.

Second, as they are now adopting almost identical broad economic policies as Labor – stimulus spending, continuing deficits and increasing debt – they will be judged as inconsistent.

And, thirdly, with Australia's economy leading the world, there is only one direction it can go in global rankings.

According to Treasurer Joe Hockey before the election, "the cupboard is bare". He insisted that his plans alone would re-stock the larder.

How will we know if he succeeds? Easy. By making time comparisons on the key measures.

So what is the actual state of the economy Hockey has inherited?

1. Income

The International Monetary Fund (IMF) measures Australia's income per person at US$64,157 for 2013. This places Australia fourth among the IMF's 35 wealthy nations.

2. Wealth

According to September's Credit Suisse global wealth report for 2013, Australia's wealth per adult is US$402,600, the second highest in the world after Switzerland.

"Even more strikingly, [Australia's] median wealth of $219,500 is the highest in the world."

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About the Author

Alan Austin is an Australian freelance journalist currently based in Nîmes in the South of France. His special interests are overseas development, Indigenous affairs and the interface between the religious communities and secular government. As a freelance writer, Alan has worked for many media outlets over the years and been published in most Australian newspapers. He worked for eight years with ABC Radio and Television’s religious broadcasts unit and seven years with World Vision. His most recent part-time appointment was with the Uniting Church magazine Crosslight.