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The Luckiest Country

2011; SAGE Publishing; Volume: 28; Issue: 1 Linguagem: Inglês

10.1177/0740277511402794

1936-0924

Michael Stutchbury,

Housing, Finance, and Neoliberalism

Sydney—When Lehman Brothers failed in September 2008, Australians felt dangerously exposed to what was locally dubbed the global financial crisis, or the “GFC.” Government debt was low and its banks had not indulged in much American-style sub-prime housing lending or dubious financial engineering. But as a capital-importing and commodity-exporting economy, Australia would be highly vulnerable to a seizure in global financial markets and a collapse in world trade. And Australian families had borrowed too much, largely to finance what suddenly looked like a bubble in housing prices. This ultimately showed up in heavy foreign debt channelled through the banking system. Cracks appeared in the second-tier banks, sending a flood of cash into the big banks and under family mattresses.For the past few years, China's voracious appetite for raw materials had created a boom in Australia's export sector, as Chinese blast furnaces devoured ton after ton of Australian iron ore and coal. Now, though, Australians feared a collapse of the American consumer market—tightly coupled with Australia's China boom. In the last quarter of 2008, the economy had contracted modestly. Dark clouds were gathering from every direction, and the specter of another Great Depression rattled the nation's confidence. Prime Minister Kevin Rudd hadn't helped matters by talking up the peril, describing it as a rolling economic security crisis. To prevent this nightmare, the Australian government had launched a massive stimulus—public-works spending ramped up, interest rates slashed, house-buying subsidies increased and cash handouts provided to lower-income citizens. In an appearance on national television in March 2009, Rudd presciently suggested his government's stimulus response would provoke “the usual political shit storm.”By early June 2009, just about everyone had expected the national accounts for the first three months of the year to confirm a second consecutive quarter of contraction—the popular definition of recession. The governor of Australia's central bank predicted “a significant contraction” for the first half of 2009. The Treasury minister agreed. “The worst global recession in 75 years means it is inevitable that Australia will be dragged into recession,” Rudd declared in late April. It was the first time any Australian government had officially provided such a forecast.On June 3, Rudd waited in the office of a senior cabinet colleague for the tidings from the Australian Bureau of Statistics. It was delivered by Rudd's senior economic adviser, Andrew Charlton, a protege of American economist Joseph Stiglitz. As soon as Charlton finished, Rudd reportedly let out an expletive of excitement and high-fived one of his colleagues. He would not have to deliver the “inevitable” bad news he had warned Australians to strap themselves in for. Instead of being dragged into the worst global economic crisis since the Great Depression of the 1930s, Australia somehow had increased its production of goods and services in the first few months of 2009. The economy had quickly rebounded from the worst global financial crisis since the 1930s. Alone among the developed nations that belong to G-20, it was not being sucked into a world recession.Over the next two years, the economic picture stayed remarkably strong. Two years after the Wall Street meltdown of September 2008, the Australian economy was 4 percent bigger, having only contracted slightly in the first few months of the crisis. Of 31 developed nations surveyed by the Organisation for Economic Co-operation and Development, Australia ranked third in post-crisis economic output, third in employment, and second in export volumes. Two years after the financial shock, 500,000 more Australians were employed than before it, and the jobless rate was headed back down below 5 percent. In stark contrast to its economic peers elsewhere in the world, Australia was faced with an emerging shortage of skilled labor, owing to the biggest mining boom in the country's history.The nation's currency reflected its economic vigor, reaching parity with the U.S. dollar for the first time in nearly three decades. Converted into greenbacks, Australia's per capita national income outstripped America's for the first time in a century. Australians lived, on average, in the world's most spacious houses. And the value of those homes was increasing, even in the wake of a crisis defined in part by a collapse in real-estate prices. The four big Australian banks that financed these dwellings remained among the dozen in the world that comprised the list of the highest, AA-rated banks, along with the likes of the Royal Bank of Canada, Credit Suisse, and the Bank of Singapore. Federal government debt remained modest in size and AAA-rated in quality. Two years after the crisis, 20 percent more Australians were travelling abroad than prior to it. Aussie accents littered New York, London and Paris, marvelling over how cheap things had become—at least when translated back into suddenly potent Aussie dollars.Currently, the economy is entering an unprecedented third decade of uninterrupted annual growth. Earlier this year, the nation was gripped by the massive floods that swept down from Queensland through the Murray-Darling basin, causing billions of dollars of damage to the city of Brisbane and to regional roads, rail lines and coal mines. Yet financial markets and economists still expected the Reserve Bank of Australia to lift its 4.75 percent official interest rate by mid-year to prevent the country's extraordinary modern prosperity from overheating the economy. Not bad for a country that a generation ago risked becoming the “poor, white trash of Asia”—in the words of Singapore's then-leader, Lee Kuan Yew.Yet growing pains have brought their own discontents, and those who presided over the economic miracle found themselves hard-pressed to profit from it, as Rudd found when he was deposed by his own deputy barely a year after Australia's recession reprieve. It is a rarity in Australian politics for a first-term prime minister to be brought down by his own party before he can face the people again in an election. And Rudd's abrupt fall came as a disturbing shock to many Australians. But, by April 2010, his poll numbers started to slide sharply—a tribute in part to his sudden back-flip on some pledges that had been popular, especially his reversal on plans to make Australia's worst polluters pay for their carbon gas emissions. Taking quick advantage of this drop in popularity, factional powerbrokers—some of whom had been left on the outside under Rudd— pressed his deputy, Julia Gillard, to challenge the prime minister. Within hours of news leaking out that she'd agreed, Rudd's support had collapsed. By the next morning, June 24, Rudd did not even contest the vote by Labor MPs. His leadership simply lost its way, explained the new prime minister, whose broad Australian vowels belie her arrival as a child immigrant from Wales in the mid-1960s.Even with Rudd gone, Gillard could only muster the narrowest of victories in the federal elections held two months after she became the first female prime minister of Australia. But her election made history in another way, too. She now heads Australia's first minority government in six decades. Her government is reliant on the support of two rural independents in the lower house of Parliament, and confronts a Senate where the left-wing party, the Australian Greens, holds the balance of power between Labor and the conservative Liberal and National parties.The electoral indecisiveness that produced this result is a recipe for weak government and suggests a troubling national complacency. While the rest of the developed world is desperate for growth, both major parties went to Australia's post-crisis election promising to rein in the nation's most rapid immigration and population expansion since the 1960s. One of Gillard's first vows as prime minister was to reject Rudd's support for a “big Australia.” Australians have simply become ambivalent about economic growth. The financial crisis hit a mining and energy boom that had pushed Australia's annual population growth to over 400,000 people, or 2.2 percent, one of the fastest of any developed economy. Mining development called for importing more skilled workers. But buoyant growth in national income itself was boosting the demand for imported labor in the cities.The problem was that housing, transportation and utilities infrastructure in the big metropolitan areas of Sydney, Melbourne, and Brisbane was lagging behind this population surge. Australia's unusual pattern of settlement, concentrated in a handful of coastal cities, was becoming a bottleneck to its mining-boom economy. Planning failures meant that housing supply failed to ratchet up to meet the boom in housing demand. (Unlike in the United States, this meant the crisis did not leave Australia with a surplus of housing stock.) Residents in leafy suburbs objected to official efforts to increase dwelling density around their sprawling quarter-acre housing blocks, with a couple of cars in the driveway and a swimming pool in the back yard. Congestion was worsening on major urban roads and on public transport. Electricity demand was rising sharply as a result of population growth, the mining boom and the growing demand for air conditioning that accompanied rising incomes. But energy supply was failing to keep up, producing double-digit increases in household power prices.The political debate centered on projections from the Treasury department that Australia's population was set to rise from 22 million to 36 million people by 2050. The projections actually assumed that the mining boom spike in immigration would correct back to the previous long-term average. But many Australians asked how these extra people would be accommodated—inevitably in the major cities. It is a big question politicians are still struggling to answer.Australia's reprieve reflected a fundamental shift in national fortune as the financial crisis convulsively shifted the economic weight from the established rich nations of North America and Europe to the rising powers of China and India. Among already-developed nations, Australia was uniquely positioned to benefit from this change.Settled by Britain in the late 18th century as a penal colony, Australia quickly became a home for the human refuse of the world's first great wave of industrialization. It developed an early 19th-century economic base by supplying English textile mills with wool from its vast flocks of sheep as well as cereals and meat exports— all products of the wide-opened lands Britain lacked. There followed a gold rush in the 1850s. But primary industries were not considered a strong enough foundation upon which to build a nation. So the federation of the continent's six colonies into the Australian nation in 1901 coincided with a strategy to promote urban manufacturing behind a high tariff wall.By the 1960s, Japan's post-war industrialization opened up Australia's vast iron ore deposits in its desolate northwest Pilbara region. Yet a protected and increasingly inefficient manufacturing sector was considered by some critics as lacking expertise and modern sophistication. In 1964, the writer Donald Horne famously described Australia as The Lucky Country. “Australia is a lucky country, run by second-rate people who share its luck,” Horne charged. By the mid-1980s, the reliance on the farm and the quarry collided with the sharp fall in global commodity prices. Australia risked “becoming a banana republic,” warned Labor Treasury minister Paul Keating.Then, beginning around 2003, the Lucky Country found itself the prime supplier of raw materials to the blast furnaces of the mother of all industrial revolutions. Australian iron ore was stoking the very Chinese industrialization that in turn was recycling a massive export surplus into excess U.S. consumption, driving up Washington's budget deficits, and inflating an American housing bubble that would almost bring down the global financial system. China now accounts for nearly half of all global steel production, and its voracious appetite for raw materials fuelled an explosion in commodity prices. By 2008, the price of iron ore soared from $20 a ton in 2003 to $160 a ton, the price of coking coal surged five-fold, while thermal coal jumped more than six-fold.For Australians, this export-price bonanza financed a national pay raise, filtering through mining company profits and dividends, government tax cuts and spending, and stronger demand for labor. It also sent a price signal for capital to flood into what is shaping up as the biggest resource boom in the country's history. “On all the indications available, we are living through an event that occurs maybe once or twice in a century,” suggests Reserve Bank of Australia governor Glenn Stevens.As well as fuelling China's blast furnaces, the boom is turning Australia into an energy superpower. The biggest resource developments of the next half-decade will tap gas beneath the seabed off Western Australia and pipe it to massive refrigeration units that chill it into liquid and then ship it off to Asia. In Western Australia, the $43 billion Gorgon liquefied natural gas project, led by Chevron, will cost the equivalent of 3 percent of the nation's annual gross domestic product.The bounty is best summarized by Australia's pivotal economic indicator— the terms of trade. The China boom has lifted this ratio of export prices to import prices by 50 percent above its previous 100-year average. China's industrial revolution has deflated the prices of manufactured goods that Australia imports. At the same time, China's demand for raw materials has inflated the price of the mining commodities Australia exports. The surge has been at least three times greater than those enjoyed by other commodity-exporters, like Canada, Brazil, New Zealand and South Africa. “The strong rise in Australia's terms of trade over the past decade could well turn out to be the biggest external shock to our economy in history,” said Ken Henry, the soon-to-depart secretary of the Treasury department, in a speech last November. Henry, along with the Reserve Bank's Stevens, has been Australia's most powerful economic bureaucrat—or econocrat, as he's known here.All this is a sharp contrast to the mid-1980s, when commodity export prices and hence the terms of trade slumped 20 percent below the 100-year average. Australians figured they were stuck on a perpetual downward spiral. The price of raw materials they export would buy less and less of the manufactured goods they import.The threat of long-term economic decline in turn sparked Australia's modern policy-reform agenda. Rather than a Reagan or a Thatcher, it was implemented by a left-of-center Labor government, led by former trade-union leader Bob Hawke, who served as Prime Minister from 1983 until 1991, and his forceful “banana republic” Treasurer Keating. Hawke and Keating used the external crisis to extend financial deregulation, dismantle the high import barriers that protected an uncompetitive manufacturing sector, privatize bloated government businesses, and strip back labor-market regulation that had allowed the trade unions to blow up previous resource booms with inflated wage demands and strikes. Under Hawke, Labor dismantled the inward-looking and protectionist “Australian settlement” struck when Britain's southern hemisphere colonies mutated into nationhood in 1901.Continued at least initially by the conservative government of John Howard, prime minister from 1996 until 2007, the 1980s economic reform agenda returned a 1990s surge of productivity. It also made the economy flexible enough to digest the first stage of the China boom, before the global financial crisis hit.But the China boom also changed the political dynamic. As the Reserve Bank's Stevens points out, a shipload of Australian iron ore five years ago could buy 2,200 flat screen television sets. Today, that same more expensive iron ore shipment can buy 22,000 cheaper flat screen TVs. By now, the political urgency that sparked the mid-1980s economic policy reform agenda has dissipated. At the peak of the terms-of-trade boom, Australians figured they did not have to bother about inconvenient policy change to become richer. And they struggled to understand why they should share the China bounty with immigrants who some feared would “clog up” their cities and suburbs.That sense of complacency vanished in the immediate wake of the crisis. His initially alarmist rhetoric aside, Rudd could not be blamed for acting quickly and aggressively. Everyone could see the fireball approaching; someone had to dig the firebreaks. At the same time, Rudd also saw potential for a long-term political advantage for Labor, arguing that the crisis would overthrow a generation of “neo-liberal’” free market ascendancy and usher in a new epoch of social democracy and government activism.The apparent lesson of Australia's early 1990s recession was that counter-cyclical budget stimulus had come too late. The budget surpluses from the pre-crisis China boom gave fiscal policy room to maneuver. Treasury secretary Henry urged Rudd to “go early, go hard, go households.” By early December, the government was sending out billions of dollars of cash handouts, mostly to lower-income Australians. “Spend it,” they were urged.The Reserve Bank's Stevens also beat nearly every other central bank governor to the punch. Barely three weeks after Wall Street imploded, Stevens slashed his official cash rate—the equivalent of the federal funds rate in the United States— by one full percentage point, or 100 basis points, from 7 percent to 6 percent. By April 2009, he had slashed it further, all the way down to 3 percent. The official rate cuts quickly inspired lower floating interest rates on housing mortgages and lower credit card interest rates. Both were critical for propping up the consumer economy. Unlike in the United States and much of Western Europe, monetary policy's “transmission mechanism” remained functional in Australia as liquidity did not freeze or even dry up. Interest rates could still provide a stimulus without having to fall to zero. A third macro-stimulus came from the Aussie dollar's sharp slump from close to greenback parity to 63 American cents. The floating exchange rate acted as an automatic stabilizer for the commodity-exporting economy, cushioning its busts and tempering its booms.The ruling Labor Party had thrown everything into the effort of isolating the economy from the global crisis, and it appeared to have worked. But the economy's unexpected resilience also sprang from policy and regulatory reforms that were put in place a quarter-century earlier. Allowing the Aussie dollar to float in 1983 provided a competitive cushion. The less-regulated job market encouraged businesses to cut back workers' hours rather than sack employees outright. Unlike in the United States and Britain, firm prudential supervision had not allowed the banks to run amok. Indeed, the Australian line is that on both sides of the North Atlantic, banking rules were not necessarily too lax—supervisors simply had not enforced them. Regardless of these more established sources of stability, political attention predictably focused on Rudd's fiscal stimulus. Labor Party leaders crowed that this had saved the economy from recession. But the conservative opposition claimed it simply had plunged the budget deep into the red. The household handouts of late 2008 had been followed by a further “cash splash” in early 2009 and then by a so-called jobs and nation-building plan. As in the United States, there were not many shovel-ready public works schemes ready to go. So, in tune with Rudd's vision that wise government would have to save capitalism from itself, a flurry of such projects were dreamed up on the run. Indeed, Australia's announced fiscal stimulus was one of the world's biggest—some 5 percent of GDP over two years.But, apart from the initial cash infusion, the fiscal stimulus could not by itself have shielded Australia from the global recession. The substantial public works outlays—particularly Gillard's $16 billion “Building the Education Revolution” plan to build assembly halls in every primary school in the nation—simply did not get going seriously until the end of 2009. But the financial crisis, recession risk and jobless rate had all peaked more than six months earlier. Moreover, while Labor's fiscal stimulus was designed to be “timely, temporary and targeted,” it was not tweakable. It could not be scaled back when the recession, once thought to be inevitable, failed to arrive. Politics dictated that every school had to get the hall that had been promised.Tellingly, popular opinion soured as waste became evident, most spectacularly in a home-insulation stimulus program run by Rudd's star ministerial recruit, Peter Garrett, formerly the lead singer of the iconic Australian rock band Midnight Oil. As a rock star in the 1980s, Garrett—with his shaved head and imposing six-foot-four frame—created a manic stage persona and became something like an Australian version of Bono. He emerged as an artistic voice of opposition to Canberra's military alliance with Washington, the mining of uranium, and the treatment of Australia's indigenous minority. (“The time has come / A fact's a fact / It belongs to them / Let's give it back / How do we dance when our world is turning? / How do we sleep when our beds are burning?” he sang in 1987 in the group's biggest hit, “Beds Are Burning.”) But as Rudd's environment minister, he proved simply inept.In the rush to super-size a cottage industry, Garrett offered cheap—even free— retrofitting of every home's ceiling insulation. Rogue operators sprang up to pocket the government subsidy, typically targeting lower-income and elderly households. Garrett's hapless bureaucrats had never run anything remotely this complex and soon lost control of both demand and supply to the operators. From about 6,000 houses a month, insulation retrofitting exploded to 180,000 a month. Weak quality control led to a handful of poorly trained young insulators being electrocuted and scores of houses being burned to the ground before the scheme was shut down. On Garrett's watch, beds were quite literally burning.Official audits later confirmed that the primary-school building program came too late to matter and that local governments had lied to Canberra over how quickly their small-scale public works projects had got up and running. Rather than the world's most effective budget stimulus, Rudd's crisis response was blighted by Australia's most bungled government spending programs.But it was electricity bills that ultimately brought down Prime Minister Rudd, who'd famously described global warming as “the great moral challenge of our time,” even if doing something about it threatened Australia's carbon-intensive economy and its reliance on cheap coal-fired power. Rudd's downfall began in late 2009, when, by a narrow margin, the conservative opposition switched leaders and vetoed the previous bipartisan support for an emissions trading scheme. The new opposition leader, Tony Abbott, a muscular social conservative often photographed in his swimming briefs or in bike-riding gear, labelled Labor's cap-and-trade scheme a “great big new tax on everything.” Then the Copenhagen climate change conference ended in shambles in December 2009, and the Mandarin-speaking Rudd was personally embarrassed when press reports later revealed that while at the conference, he had privately accused the Chinese of trying to “rat-fuck” everyone else.After returning to Australia, Rudd quietly shelved his emissions trading scheme, in part at the urging of Gillard and Labor powerbrokers who feared potential a voter backlash over higher power prices. But the weak reversal sparked a revolt on Labor's left flank. Rudd was always a vain political loner, personally liked by few within his own party. When his poll numbers slipped, he became vulnerable to the same powerbrokers who urged him to ditch his climate change scheme.The irony is that both sides of politics basically agree on how much Australia should offer to cut its carbon emissions. But the lack of a market-based price on carbon means that higher cost measures, such as mandated wind power, are bearing more of the burden of hitting this target. And the political uncertainty over whether to impose an explicit price on carbon emissions is undermining investment in cleaner gas generation. This will ensure that power prices rise anyway.Even as the fiscal stimulus bungles were unfolding, the Reserve Bank's Stevens began to sense that something else was cushioning the economy. Around the world, consumers had taken fright over the financial crisis, leading to a collapse in international trade of manufactured goods such as motor vehicles. But Australia is not a big exporter of manufactured goods. And Beijing quickly stimulated Chinese housing construction and transport infrastructure spending, ensuring that demand for steel-making materials faltered for only a few months.By May 2009, the Reserve Bank observed that Australia's export volumes had not fallen much at all in the first six months of the global crisis, pointing to “recent strength” as Chinese steel production recovered toward its 2008 highs. By October, when the public works schemes were starting to ramp up, Stevens started to remove the emergency monetary stimulus by raising his official interest rate, becoming the first central bank governor to do so anywhere in the world. Stevens downgraded the global financial crisis to a “North Atlantic Financial Crisis.” The most effective budget stimulus to the Australian economy came not from Canberra but from Beijing.This external stimulus could be long-lasting. Both the Treasury and the Reserve Bank suggest that demand for Australian mining and energy resources could remain elevated for decades if China follows the North East Asian development path established by Japan, South Korea and Taiwan. Yet there are also risks in the accelerated post-crisis shift in Australia's export orientation toward China and especially its reliance on natural resources to fuel its growth. Australia's top five export markets are China, Japan, India, South Korea and the United States—in that order. Thanks to the previous decade's China boom, natural resources have gone from representing 35 percent of Australian exports to nearly 60 percent. The International Monetary Fund projects that China and India will account for 44 percent of Australia's merchandise exports by 2015, up from only 7 percent in 2000.While this should underpin continued rapid economic expansion, the increased concentration on China and resource exports may also prove more volatile. Nearly all of the economy's faster growth in the past decade is simply due to increased inputs of workers and capital. The 1990s productivity surge has evaporated. All of the prosperity gains have come from the amazing rise in the terms of trade. At best, this will not repeat itself. At worst, it could come undone if China's industrial revolution falters.That means Australians now need to save, rather than spend, during the next phase of their China boom. Between 1990 and just before the crisis, Australian households lifted their borrowing from 50 percent of their incomes to 150 percent. Horror stories from abroad during the world financial crisis shocked Australians into paying off their own debts, while curbing their credit card spending. The surge in tax revenue from the pre-crisis China boom financed eight successive years of personal income tax cuts. This can't be repeated because the revenue from the post-crisis rebound in commodity prices has to be quarantined to return the budget to a solid surplus. And in response to the Queensland floods, Prime Minister Gillard announced a temporary tax hike to finance the reconstruction rather than delay the scheduled 2012–13 return to surplus.The boom also is driving deep structural changes that could take a decade or more to play out. While making overseas travel cheap, the stronger Australian dollar is doing its job by squeezing out sectors such as manufacturing, tourism, and higher education to make room for the mining development boom. It is commonplace to note that Australia has a two- or three-speed economy—a fast mining boom lane, a slow manufacturing and tourism lane and perhaps a middling lane in much of the services sector. Big business is awash with cash, but many small businesses are hurting.So even amid the boom there is not much bounty to throw at the electorate, particularly the mortgage belt voters— families with big housing debts in the critical suburban electorates—who typically decide Australian elections. With their heavy debt-servicing burden, many will be squeezed as the Reserve Bank lifts interest rates higher in 2011 and 2012 to contain inflation. Many of these voters are angry over the poor urban planning that has siphoned higher population growth into their suburbs without sufficient expansion of housing, transport and other infrastructure. Most are ready to switch their votes away from whomever they blame for a doubling of household electricity bills.To many in the alarmed policy elite, the uproar reflects the broader collapse of Australia's 1980s and 1990s policy agendas. As Rudd's deputy, Gillard fulfilled a 2007 election promise to partly re-regulate the job market and re-empower Labor's trade union affiliates. Treasury minister Wayne Swan ignored some 100 tax reforms recommended by a review panel led by Treasury secretary Henry, instead singling out a “super profits” tax on mine owners. While legitimate in principle, Rudd and Swan ambushed the big miners with class-war rhetoric that guaranteed a public dust-up. Gillard's resulting mess of a compromise reduced the overall tax slug but applied it unevenly for different miners. And an increasingly populist opposition goaded Swan into attacking the private banks, rather than the mining boom or the global credit crunch, for rising interest rates. Mortgage belt anger had to be directed somewhere. The banks supposedly needed to have both more competition and more regulation loaded onto them. So Labor's plodding Treasurer managed to attack the two industries— mining and banking—most responsible for shielding Australia from the crisis.Now Labor is building a $40 billion national fiber-based broadband network that will act as a public monopoly and require restrictions on telecommunications infrastructure competition to make it pay. Independent MPs who represent rural districts—and who hold the balance of power in parliament—love this old-style subsidy to the bush. The sound, pro-market policy thrust that underwrote the nation's economic renaissance appears to be returning to its interventionist and populist traditions. Bad policy may serve short-term political interests. Yet it ultimately cannot be good politics. Without more efforts to improve the economy's supply-side efficiency, the mining boom will only aggravate cost-of-living pressures such as rising interest rates.Australia's economic success has been based on pragmatic pro-market reforms and now the luck of its China boom. From this perspective, there is no point in getting caught up in northern hemisphere doctrinal disputes over the neo-liberal excesses of global financial capitalism versus the evident cul-de-sac of the European welfare state. But Canberra's marooned minority government is sitting on a growing backlog of policy reforms needed to maximize Australia's China fortune and prevent it from being splashed up against the wall, as has happened with previous mining booms. These reforms are mostly orthodox and pro-market, although often politically controversial at a time when politics here has become mostly a struggle over dividing the spoils of the biggest external bounty in a century or more.Most don't realize that the original “Lucky Country” slogan, coined during the 1960s mining boom, was a sarcastic dig at the success of Australian mediocrity. For the moment, Australia remains a model for how not to fall unwittingly into the deep hole of a global recession. But it needs to take its boom economy firmly in hand if it is also to serve as a template for a sure path toward a prosperous future. Australia has to decide how far it can push being the luckiest country in the world.