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 didn’t 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 from abroad.
"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 we’ve been applying it vigorously.
It’s not happening anywhere else in the
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,
Australia’s sustained expansion has been the most
impressive performance of any member of the developed rich
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.
He’ll be thinking how this gong will improve
Labor’s chances of winning the next election,
seeing it in intensely political terms as will, of course, his
That political capital
might be useful, given that there’s every
possibility that by the next time Euromoney considers
the global field of finance ministers, Swan
won’t 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
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 union’s
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 can’t 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. That’s the
thing I’m 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
didn’t go into recession and we
didn’t suffer the capital destruction and the
skill destruction that we saw in many other countries, and
it’s 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
If only Australians saw
it that way. Through their gloomy prism, things are grim, and
they’re pointing fingers at the government.
Indeed, during this 20th anniversary of the collapse of the
Soviet Union, there’s something of Gorbachev about
Swan and Labor – hailed abroad by everyone from the
IMF to the OECD but loathed at home. Or perhaps
it’s 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 he’s
doing a good job. But Australian umpires, like their
politicians, aren’t 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.