Australia often has been dubbed “Lucky Australia.”
Over the past year or so that adjective has been justified by its current economic leadership. Even though Canada and Australia share a family resemblance, recently we have not lived up to expectations. However, if we change our policies, there is every reason to believe Canada can be “Lucky too.”
According to a recent commentary by the Reserve Bank of Australia, the country’s central bank, “Economic conditions in Australia have been stronger than expected and measures of confidence have recovered. Housing credit growth has been solid and dwelling prices have risen appreciably over the past six months.”
Recently that nation’s central bank surprised us by raising interest rates. Overall, Australia thus is one of the very few countries of the Organization of Economic Development that did not experience any recession, and proving the point credit conditions no longer need to be eased as unemployment numbers have started to fall.
While Canada and Australia were in good financial shape going into last year, are significant natural-resource exporters and the two countries have seen their currencies appreciate relative to that of the United States and many other nations, that is where the similarity ends.
The two, Canada and Australia, provided large stimulus outlays to boost their economies, but Canada concentrated on what it termed “shovel-ready” infrastructure; projects in sharp contrast to Australia’s stimulus spending, centred on so-called “soft infrastructure” like education, innovation, science and technology. As quite predictable, those investments accomplished a great deal to bolster the economy, mainly by increasing productivity, the efficiency of the labour force.
Even though it is widely recognized that education levels supplement economic success, Canada has kept a tight rein on spending for education, not increasing that as is part of the Australian program. Unfortunately, some here still view education as “nice to have” rather than the essential requirement for economic growth.
Our manufacturing sector has been hard hit by the downturn in the economy south of the border and our concentration of exports to the United States.
Australia has focused its export drive on China. It must be recognized that Australia’s proximity to Asia gives it an edge; we have an added plus in our oil industry and our more diversified mining sector. China has been importing large quantities of coal from Australia, which provides Canada with an opportunity to supplant that with our plentiful reserves of oil, widely recognized as less harmful to the environment than coal.
If we began to rely more heavily on the Asian market and less on the United States for our exports, while greatly increasing our education programs, our manufacturing sector could regain some of its lustre; then our nation could be called, “Lucky too.”