BLESSED WITH, AND industriously exploiting, a natural resources
bounty pointed at China that would embarrass Croesus, some
Australians will find it strange that Euromoney has
chosen their treasurer, Wayne Swan, as finance minister of the
The less charitable might
even recall the words of Donald Horne, in his 1964 book The
Lucky Country, which read: "Australia is a lucky country,
run by second-rate people who share its luck."
Swan would probably be
among the first to admit that he has indeed had some luck. But
his work as treasurer is acknowledged by Euromoney as
much for what didnt happen to Australia on his careful
four-year watch economic Armageddon in the trail of the
2007-08 subprime meltdown, which he confronted in his first
year in office as for what he positively did,
positioning Australia to power through the new crisis looming
"The fiscal rules that we
put in place to deal with the global recession when we moved to
stimulate the economy were ahead of the rest of the world,"
says Swan, in an interview from the kookaburra-chorused back
verandah at his home in Brisbane.
"These were the sorts of
rules that were ultimately adopted by the G20 in its summits
through 2009, this whole notion that you needed an exit
strategy. At the time we moved to stimulate, we put one in
place and weve been applying it vigorously. Its not
happening anywhere else in the world."
As a result, Australia is
one of only three OECD economies not to fall into recession
since 2008, alongside Poland and South Korea. And it seems well
placed to repeat the feat as the worsening euro crisis and US
funk spread their infection. After two decades of growth,
Australias sustained expansion has been the most
impressive performance of any member of the developed rich
Thats all very
well, but is Swan a worthy recipient of the award, in this era
of booming Brics and roaring Tigers emerging to trump the
Former ANZ chief
economist Saul Eslake of the University of Melbourne think-tank
The Grattan Institute knows the 57-year-old Swan well, and
offers a qualified yes.
"Swan is certainly after
glory," says Eslake, "but for his party, not for himself.
Hell be thinking how this gong will improve Labors
chances of winning the next election, seeing it in intensely
political terms as will, of course, his political
That political capital
might be useful, given that theres every possibility that
by the next time Euromoney considers
the global field of finance ministers, Swan wont be
among them. The longevity of the minority Labor-led government
of prime minister Julia Gillard Swan is deputy prime
minister depends on the whim of three independent MPs
who face a voter backlash in their own constituencies, because
they backed Labor into power last year.
And none have been
impressed by Hookergate, allegations that Labor backbencher
Craig Thomson, who chaired a key parliamentary economics
committee, paid for prostitutes with his unions credit
card, as Labor bailed him out of bankruptcy with party funds.
With a two-seat majority and a 15-point deficit in opinion
polls, Labor cant waste a single seat, lest it trigger an
early election it will certainly lose.
What does Swan think?
"Oh, I think Australians
recognize that we did really well during the global financial
crisis and the global recession," he says.
understand that we were almost alone among the developed
economies to not go into recession. Thats the thing
Im most proud of.
"When we moved to
stimulate the economy (in 2007-08), given the nature of the
debate in Australia, it was controversial and vehemently
opposed by our political opponents. As time has proven, the
fact is we did keep Australia out of recession, we had one
quarter of negative growth and avoided it in the subsequent
three. We took a well-thought-out, well-executed set of plans
to stimulate the economy.
"And it worked, so we
didnt go into recession and we didnt suffer the
capital destruction and the skill destruction that we saw in
many other countries, and its given us a really great
foundation to approach the Asian century and the resources boom
that comes with it, because we are going into that from a
position of strength."
If only Australians saw
it that way. Through their gloomy prism, things are grim, and
theyre pointing fingers at the government. Indeed, during
this 20th anniversary of the collapse of the Soviet Union,
theres something of Gorbachev about Swan and Labor
hailed abroad by everyone from the IMF to the OECD but loathed
at home. Or perhaps its a little like what sport-obsessed
Australians are world renowned for. They hate it when the
referee intervenes in an epic battle. Sport is best contested
when the umpire is invisible, which usually means hes
doing a good job. But Australian umpires, like their
politicians, arent to be praised, no matter how well run
the contest. Elections elsewhere are fought on the economy, and
Australians are the thankless lot who bounced the conservative
Howard-Costello team from office after 11 years, while the
booming economy was at the peak of its powers.