I have this piece in Quadrant.
It was triggered by this graphic presenting a 300 year review of the rise and fall of nations in the GDP stakes. By 1913, the Western world’s living standards were two- to tenfold those of the rest of the world. Fast forward to 1973 and this picture had not markedly changed. At that time, (in US 2011 $) China and India had per capita GDPs at little more than $1000 compared with $20,000 for the Western world (by then including Japan).
Demonstrating the absence of barriers to achieving high living stgandards, by 2016, Western nations (now joined by the “Asian tigers”, South Korea, Taiwan, Hong Kong and Singapore) had per capita incomes in the $30,000-53,000 range. Income levels of China ($12,500) and India ($6,100) were on rapid growth trajectories.
These developments have provided Australia with a magnificent base on which to build our own prosperity.
Per capita, the 25 million Australians are sitting on the most valuable natural resources in the world but we have not performed well. Our natural wealth is not matched by our income levels for reasons that include:
- Hostility to the development of and over eagerness to tax coal, gas and other resources, which are the nation’s most important exports
- Determination to ensure the destructive substitution of high cost, unreliable wind and solar for low cost reliable coal for electricity generation
- Measures that restrain the use of water for farming in Australia’s most important agricultural province, the Murray Darling, and in building new irrigation facilities and preventing land clearing in Queensland
- The chronic inability of government to wind back expenditure programs once set in train, with a consequent reduction in labour and capital resources available for productive ventures
- An industrial relations system that is especially vulnerable to trade union and government pressures to require wages and conditions which exceed the productivity levels that can support them
- An education system that is focussed upon equality of outcomes rather than the promotion of excellence and which has been redirected away from school training in basic three R skills in tertiary institutions from engineering and the hard sciences
- Wasteful spending, pandering to political fantasies, best exemplified by the decision to convert French nuclear submarines to less effective diesel power
Pressures generatong these policy misdirections are becoming more prominent.
The consequent lower living standards are regretable per se but also condition our ability to provide the greater self-reliance in defence that will increasingly be required.
Our independence, like that of many other countries, is reliant on the US. The abilities of the US to perform this role will diminish in relative terms, all the more so if the pro-growth policies followed by the Trump administration are replaced by a return to the Obama era’s focus on social welfare, virtue signalling and the appeasement of rogue and aggressive states.