October 30, 2018

THE SCHOOL OF AUSTRALIAN ECONOMICS:

Clever reforms 30 years ago helped Australia's growth: But can today's politicians make similar, shrewd changes? (The Economist, Oct 27th 2018)

"We will just end up being a third-rate economy...a banana republic," warned Paul Keating in 1986. He used such threats to persuade the country to accept a series of radical economic reforms over the next decade, when he was treasurer (finance minister) and then prime minister. Along with his predecessor as pm, Bob Hawke, Mr Keating floated the Australian dollar, abolished import quotas, slashed tariffs, deregulated the financial sector, privatised state-owned enterprises, overhauled the tax code and did away with country-wide wage accords in favour of company-by-company "enterprise bargaining".

Many of these reforms were instituted during Australia's last recession in the early 1990s ("the recession we had to have", in Mr Keating's words). Most economists believe they have saved it from subsequent recessions by providing the flexibility needed to adjust promptly to changing economic conditions.

They were Third Way before it was cool.

Posted by at October 30, 2018 4:10 AM

  

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