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On the face of it, Australia seems to have dodged most of the bullet that hit the world economy about a year ago. Though we are the only developed country to avoid a technical recession, Kevin Rudd should resist the temptation to gloat at the G20 meeting in Pittsburgh next week.
About a year ago, Lehman Brothers, the storied New York bank, collapsed. And for a time, a re-run of the 1930s’ Great Depression seemed possible. The dangers of inter-connected credit swaps backed up by loans people couldn’t afford to repay became clear with alarming speed.
Large profits came back quickly, too. Goldman Sachs, soon after taking taxpayer bailouts, is rolling in it again. It can’t repay the bailouts fast enough, so it can break free from the salary constraints the U.S. Government imposed. With each green shoot that appears, it’s more like business as usual every day.
That’s a problem. And Mr Rudd should argue less with John Howard about what happened before, and prepare more for what’s needed next. This is not to say our history is a failure. Preventing big banks from merging, having better corporate law stemming after HIH Insurance collapsed and closer trade links with China did shield Australia from the worst of the global financial crisis.
But there are problems, too: the gradual privatisation of monetary policy; diminished competition especially in mortgages; off-shoring jobs and longer wait times for customers; and alarming levels of household debt.
If Mr Rudd arrives in Pittsburgh pretending Australia has it all right, it will be an opportunity missed. Instead, he should present us as we are: better regulated than some, but still with some way to go. And if he’s serious about increasing Australia’s clout in global forums, he should vow to make us the best-regulated world economy by learning from our mistakes.
The online ballot on AustralianSuper’s final offer on a proposed new Enterprise Agreement ends at close of business Friday 25th September.
The offer includes pay increases for non-managerial staff of 12.5% over three years, improvements to parental and long service leave, the addition of community service leave, and changes to vehicle policy to reflect support for locally manufactured, environmentally sustainable vehicles.
Don’t forget to have your say on the proposed Agreement, by participating in the ballot.
Don’t miss out on your chance to win an iPod nano. All you have to do is complete our online survey before 5pm Friday 25th September to enter the draw. The survey is available here.