Raja Junankar

Weak inflation figures have been seized on as an example of the slowing Australian economy. However if we listen to the politicians it appears that the Australian economy is suffering from a major crisis of ballooning government debt and an impending crash. This is patently not the case – the way the economy has continued to grow shows Australia really is the miracle economy.

Most of the countries of the OECD are still suffering from the Global Financial Crisis – or as the Americans call it the Great Recession. However the Australian economy is still very healthy. Admittedly in the past few months, it appears that the Australian economy is finally slowing down as the resources boom comes to an end, however unlike most of the OECD countries, Australia did not have a recession, and indeed finances remained very healthy.

Indeed, much rhetoric from Canberra seems to ignore this. For example, if you look at the unemployment rate it increased slightly after the GFC, but it came down again. All the other countries had much higher unemployment rates than Australia in the post-2008 period. The period of record low unemployment in Australia for the past five years seems to be frequently ignored in discussions about the economy.

Looking at how well the Australian economy has fared over the past few years, compared to other countries, it appears to score very highly.

Looking at the debt to GDP ratios, Australia has the lowest ratio. Even Germany, the country that is imposing austerity on the eurozone countries, has higher debt ratios. And yet if you listen to some politicians they believe that Australia is in debt crisis – but actually, Australia is in a far better situation than pretty much every other country. Until the population start listening to some of the facts, rather than myths about the economy, the negative stories will dominate rather than the facts.

Honorary Professor Raja Junankar is from the Industrial Relations Research Centre at the Australian School of Business.