tag:theconversation.com,2011:/au/topics/state-of-australia-10220/articlesState of Australia – The Conversation2014-05-12T03:17:05Ztag:theconversation.com,2011:article/262292014-05-12T03:17:05Z2014-05-12T03:17:05ZThe state of Australia: business<p><em>In the lead up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers to take a broader look at the State of Australia; our health, wealth, education, culture, environment and international standing.</em></p>
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<p>As we await the 2014-15 Federal Budget, business in Australia is generally wary, and in a period of transition on several fronts. After two decades of solid growth, many firms are facing new and complex challenges, and are not confident about what the future holds.</p>
<p>While business groups generally support strong action to reduce the budget deficit, many argue that the adjustment should be gradual and done in a way that assists the competitiveness of the non-mining sector. There is growing concern that a single-minded focus on “budget repair” could damage the economy in the short term and do little to assist the necessary processes of structural change over the medium term.</p>
<h2>How are we doing now?</h2>
<p>For Australian business, how you are doing now very much depends on what industry you are in, where you do business and whether you are trade exposed.</p>
<p>Mining generally remains strong, in spite of the continuing high Australian dollar and falls in key commodity prices. Many big miners can offset falling prices by increased export volumes as big projects come on stream, but some smaller miners are feeling the pinch. Resource investment has peaked, and is falling fast, but the volume of mining exports will rise for some years to come.</p>
<p>For manufacturers, other than those with natural protection, the situation is quite different, as we have seen repeatedly over the past year. Motor vehicle manufacturing is being closed down over the next few years, and many other parts of manufacturing are struggling. Wage and other costs (such as electricity) are very high when expressed in say US dollars, and exceptional productivity or an innovative edge is required to survive.</p>
<p>The finance industry is generally doing very nicely, thank you, especially at the larger end. For example, the combined annual profits of the four dominant banks are now about $30 billion. A sustained period of low interest rates, a strong stock market and a housing revival is always good for the banks.</p>
<p>The construction industry is mixed, with the housing sector rising, commercial building still subdued and the engineering construction sector still at high levels as a result of the resources boom, but starting to fall rapidly. Infrastructure remains unsatisfactory, particularly public transport in the cities, as our cities clog up under the pressure of rapid population growth, dispersed development patterns and a focus on roads.</p>
<p>Many trade exposed service industries, such as aviation, are struggling to remain competitive, but education and tourism exports seem to be holding up. The core domestic service industries – health, education, transport and retail trade – remain relatively strong, supported by a shift in the pattern of demand and by continuing strong immigration.</p>
<p>Certain common themes underlie this complex mosaic. One is the rise and coming fall in resource investment, which might drop by 5% of GDP over the next three to four years. Another is the changing growth patterns in China, which is emerging as a massive but as yet untapped market for our food and professional service exports. </p>
<p>A third remains the high exchange rate, implying high wage and other costs in terms of US dollars, even in spite of rising productivity. And then there is the uncertainty about the budget, and concern that it might address a perceived fiscal problem at the expense of business, the community and the economy.</p>
<h2>How we got there?</h2>
<p>The background to this situation is in two parts, the longer term and the shorter term. The longer term picture is well known. It involves the biggest resources boom in our history, the transition of that boom to falling investment and rising exports, and the legacy of a high exchange rate and high costs generally in spite of historically low interest rates.</p>
<p>The shorter term picture is less well known, but also interesting. Since the election of the Abbott Government there has been a distinct pick-up in economic activity, fuelled by a jump in business and consumer expectations and by expansionary fiscal and monetary policy. But expectations are now rapidly subsiding, and the Budget will reveal the new direction of fiscal policy.</p>
<p>In its first eight months, whether by accident or design, the Abbott government has followed a standard Keynesian approach, with expansionary fiscal policy together with <a href="http://www.rba.gov.au/media-releases/2014/mr-14-07.html">low interest rates</a> providing strong stimulus to the economy. The <a href="http://budget.gov.au/2013-14/content/myefo/html/">December 2013 fiscal statement</a> indicates that, excluding the $8.8 billion transfer to the Reserve Bank, in 2013-14 receipts will grow by 4.0% and spending by 9.0% in nominal terms. The five point differential will inject a net $18 billion or over 1% of GDP into the economy.</p>
<p>The combination of low interest rates and the election of the Abbott government in September led to an immediate jump in various measures of consumer and business sentiment. For example, the three Australian Industry Group performance indices (manufacturing, services and construction) all jumped in September, and moved into positive territory by about year’s end. But as confidence has eroded they have fallen, and were at <a href="http://www.aigroup.com.au/economicindicators">much lower levels in April 2014</a>.</p>
<p>This combination of expansionary policy and improved sentiment led to an improvement in the economy – in housing, in retail sales and in employment. But the boost in sentiment has gone, and the expansionary fiscal policy might be about to go. Hence the uncertainty in the business community.</p>
<h2>What’s next?</h2>
<p>Governments influence the environment in which business operates in three main ways: by how they shape expectations, by their impact on the macro economy and by their policies to assist firms to meet the challenges they face and to make the necessary adjustments to changing realities.</p>
<p>In terms of expectations the Government’s performance to date has been a disaster, having quickly turned positive expectations into negative, and even losing the company directors!</p>
<p>More generally it seems to be shaping the budget with little awareness of the fragility of the economy right now and of the magnitude of the economic as opposed to the fiscal challenges ahead. But with so much spin and so many kites it is hard to be sure, and we will find out soon enough.</p>
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<p><strong>Further reading:</strong> <a href="https://theconversation.com/topics/state-of-australia">The State of Australia series</a></p><img src="https://counter.theconversation.com/content/26229/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Sheehan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In the lead up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers…Peter Sheehan, Research Director, Centre for Strategic Economic Studies, Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/264562014-05-11T19:15:59Z2014-05-11T19:15:59ZThe state of Australia: science innovation and research<figure><img src="https://images.theconversation.com/files/48140/original/xb875nhm-1399612900.jpg?ixlib=rb-1.1.0&rect=0%2C215%2C1170%2C802&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Australia playing its part in the world of science with the planned SKA Australia survey telescopes to be located in Western Australia (artist image).</span> <span class="attribution"><a class="source" href="https://www.skatelescope.org/multimedia/image/category/the-sites/australia/">SKA Organisation</a></span></figcaption></figure><p><em>In the lead up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers to take a broader look at the State of Australia; our health, wealth, education, culture, environment and international standing.</em></p>
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<p>Australian higher education institutions are nervously anticipating this week’s federal budget that in the <a href="http://www.pm.gov.au/media/2014-04-29/address-sydney-institute">words of the Prime Minister</a> threatens to “shift” university funding and give them “more freedom to innovate”. </p>
<p>But what will this mean? </p>
<h2>How we’re doing now</h2>
<p>Currently Australia is an excellent place to conduct fundamental research. </p>
<p>The <a href="http://www.chiefscientist.gov.au/2013/02/benchmarking-australian-science-performance/">Office of the Chief Scientist</a> says Australian research in several key areas of science performs above a European average, based on a study of citation rates for journal articles.</p>
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<a href="https://images.theconversation.com/files/48127/original/7fd947wf-1399608048.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/48127/original/7fd947wf-1399608048.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/48127/original/7fd947wf-1399608048.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=300&fit=crop&dpr=1 600w, https://images.theconversation.com/files/48127/original/7fd947wf-1399608048.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=300&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/48127/original/7fd947wf-1399608048.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=300&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/48127/original/7fd947wf-1399608048.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=377&fit=crop&dpr=1 754w, https://images.theconversation.com/files/48127/original/7fd947wf-1399608048.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=377&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/48127/original/7fd947wf-1399608048.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=377&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">The black circle shows Australia’s position and how it compares against the European averages in a selection of science disciplines.</span>
<span class="attribution"><a class="source" href="http://www.chiefscientist.gov.au/2013/02/benchmarking-australian-science-performance/">Office of Chief Scientist</a></span>
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<p>Australia is also third in the region (behind Japan and China) in the <a href="http://www.natureasia.com/en/publishing-index/asia-pacific/by-country">Nature Publishing Index for the Asia-Pacific</a>, although one can always find a ranking system that compliments your nation/institution is you search through enough of them!</p>
<p>In my own sub-discipline of astronomy we are blessed by access to world-class infrastructure such as the telescopes owned and operated by the <a href="http://www.aao.gov.au/">Anglo-Australian Observatory</a> and <a href="http://www.csiro.au/en/Outcomes/Understanding-the-Universe/Operating-our-radio-telescopes/ATNF-overview.aspx">CSIRO</a>.</p>
<p>We are also playing a leading role in developing the <a href="http://www.ska.gov.au/">Square Kilometre Array</a> and <a href="http://www.agmt.org.au/">Giant Magellan</a> telescopes, both billion dollar projects and the former to be partly housed here.</p>
<p>I know that my students and postdocs can compete internationally and find good jobs both here and abroad, with last four to leave Australia going to the <a href="http://www.caltech.edu/content/jet-propulsion-laboratory">Jet Propulsion Laboratory/Caltech</a>, the <a href="http://www.mpg.de/institutes">Max Planck Institute</a> and two to <a href="http://www.harvard.edu/">Harvard</a>.</p>
<p>And yet there are issues, the most fundamental being funding uncertainties and lack of planning at the federal level. The funding for research infrastructure is a case in point.</p>
<p>There is no plan. </p>
<p>State and federal governments are often keen to fund the construction of iconic pieces of equipment but steadfastly refuse to provide running costs.</p>
<p>The <a href="http://www.synchrotron.org.au/">Australian Synchrotron</a> is the most painful and obvious example. Rather than being built as part of a national strategy it was <a href="https://theconversation.com/australian-synchrotron-scientific-marvel-political-puzzle-1177">claimed by Victoria</a> to thwart Queensland’s desire to host it and it now <a href="http://www.smh.com.au/business/victorian-synchrotron-funding-veers-off-beam-20140328-35oi8.html">struggles to remain open</a>.</p>
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<a href="https://images.theconversation.com/files/48146/original/h4cph9tb-1399614885.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/48146/original/h4cph9tb-1399614885.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/48146/original/h4cph9tb-1399614885.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=222&fit=crop&dpr=1 600w, https://images.theconversation.com/files/48146/original/h4cph9tb-1399614885.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=222&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/48146/original/h4cph9tb-1399614885.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=222&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/48146/original/h4cph9tb-1399614885.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=279&fit=crop&dpr=1 754w, https://images.theconversation.com/files/48146/original/h4cph9tb-1399614885.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=279&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/48146/original/h4cph9tb-1399614885.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=279&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">The Australian Synchrotron - should have been part of a national strategy.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/tom-paton/4892746183">Flickr/Tom Paton</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span>
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<p>Competitive research funding needs urgent reform but the Australian Research Council (<a href="http://www.arc.gov.au/">ARC</a>) is burdened with providing meaningless statistics back to the government at the expense of our researchers with only about <a href="http://www.theage.com.au/national/more-scientists-likely-to-miss-out-on-government-funding-for-research-20140109-30kod.html">21.9% of applications</a> being successful. </p>
<p>There are <a href="https://theconversation.com/what-about-science-in-the-commission-of-audit-report-26181">concerns</a> too following the recent Audit of Commission report on <a href="http://www.ncoa.gov.au/report/phase-one/part-b/8-2-research-and-development.html">research and development funding</a> which recommends abolishing the Cooperative Research Centres.</p>
<h2>How we got here</h2>
<p>In the good old days there was the group of eight universities and CSIRO. The former trained research students and the latter concentrated on areas of research thought to aid our national priorities.</p>
<p>CSIRO budgets were largely consistent from year to year and university researchers looked almost solely to the ARC for their research funding.</p>
<p>Then, as the nation prospered we rapidly grew the higher education sector and encouraged more students to gain tertiary training and greatly expanded the number of universities. But the ARC budget didn’t expand at the same rate as the sector and researchers got grumpier as success rates declined.</p>
<p>Meanwhile CSIRO was told it had better earn 30% of its own income and to make it more “efficient” it would have its budget cut by 1% per annum.</p>
<p>It introduced <a href="http://cpsu-csiro.org.au/2013/10/18/staff-survey-slams-csiro-matrix/">an unpopular matrix management</a> and other confused policies that left scientists and engineers doing menial tasks instead of research. Many CSIRO scientists departed and there are still <a href="https://theconversation.com/scrimp-now-pay-later-csiro-cuts-could-stifle-long-term-research-25591">concerns over further cutbacks</a> to the organisation.</p>
<p>Our politicians have realised that research infrastructure spending has no electoral value. Their main verbal slanging matches seem to revolve around petty issues such as compulsory student unionism, as if they were still the presidents of the Young Liberal and Young Labor on campus, not dictating a coherent strategy for our research future in our federal parliament.</p>
<h2>The next ten years</h2>
<p>The only way for Australia to remain a research innovator is to invest in, and have a long-term plan for the sector. But this is unlikely to happen when the budget is in deficit.</p>
<p>Ironically our economic prosperity and budget future will depend upon the research investments we make now, but this will only hurt the budget more, so the government is faced with some unpalatable choices.</p>
<p>It seems almost certain that our children will <a href="http://www.theguardian.com/world/2014/may/01/students-to-shoulder-greater-cost-burden">face higher fees</a> and larger debts to help fund the sector. But <a href="https://theconversation.com/raising-hecs-why-not-some-more-ssecs-for-education-25948">avoiding taxation reform</a> to hit graduates seems somewhat “un-Australian” to me.</p>
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<a href="https://images.theconversation.com/files/48143/original/9m7sqg43-1399614278.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/48143/original/9m7sqg43-1399614278.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/48143/original/9m7sqg43-1399614278.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=340&fit=crop&dpr=1 600w, https://images.theconversation.com/files/48143/original/9m7sqg43-1399614278.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=340&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/48143/original/9m7sqg43-1399614278.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=340&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/48143/original/9m7sqg43-1399614278.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=427&fit=crop&dpr=1 754w, https://images.theconversation.com/files/48143/original/9m7sqg43-1399614278.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=427&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/48143/original/9m7sqg43-1399614278.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=427&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Asking students to pay higher fees is not the answer.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/mikecogh/5605440885">Flickr/Michael Coghlan </a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span>
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<p>I’d like to believe that we invest in our youth and they repay their debt via the taxation system when they’re at the peak of their earning powers, not as they struggle to buy their first home and cot.</p>
<p>A national research infrastructure plan performed in conjunction with the state governments and research institutions is a must. This must look at the total cost of ownership and operation of a facility.</p>
<p>Universities need their red-tape cut so we can invest more in research than reporting on it. We need to scrap stupid bean-counting exercises such as the Higher Education Research Data Collection (<a href="https://education.gov.au/higher-education-research-data-collection">HERDC</a>) and just fund research infrastructure based on simpler metrics that don’t require an army of support personnel and the game-playing associated with <a href="https://theconversation.com/strength-in-numbers-do-era-rankings-add-up-for-universities-7493">ERA</a>.</p>
<p>Research grant applications need to be simplified and be for longer duration to avoid boom and bust cycles that cripple researcher morale and their teams.</p>
<p>The <a href="https://www.universitiesaustralia.edu.au/news/media-releases/Universities-respond-to-Commission-of-Audit#.U2xii62Sz-Q">freedom to set fees</a> may make some institutions richer and able to fund better research leading to a Darwinian survival of the fittest scenario but might have some unexpected outcomes.</p>
<p>But should we really care about having an institution in the top ten in the world if it means the total number of Australians educated falls? These are not easy questions to answer.</p>
<p>Research and innovation should not become a political football, it should be a matter of national pride. Politicians should respect what research is telling us – about our health, our environment and our climate – and they should not denigrate scientists when they tell them what they don’t want to hear.</p>
<p>Finally, programmes to allow research and innovation to diffuse into the private sector will ultimately be to our nation’s benefit, enabling future governments to invest more back into higher education and research.</p>
<p>This is one area in which we can learn extensively from the US where there is a greater connection between universities and the private tech sectors when it comes to technology and innovation. In Australia there is still too large a gulf between industry and university researchers, with the latter often having an unhealthy disdain for companies and entrepreneurship.</p>
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<p><strong>Further reading:</strong> <a href="https://theconversation.com/topics/state-of-australia">The State of Australia series</a></p><img src="https://counter.theconversation.com/content/26456/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Matthew Bailes receives funding and or equipment from the Australian Research Council, Intel, Nvidia, and is helping design the Square Kilometre Array via a Federal grant. He works for Swinburne University of Technology.
</span></em></p>In the lead up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers…Matthew Bailes, Pro-Vice Chancellor (Research) , Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/260842014-05-09T04:15:18Z2014-05-09T04:15:18ZThe state of Australia: our people<figure><img src="https://images.theconversation.com/files/48102/original/d2tyqrzg-1399592311.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Developing policies to shape the level and nature of future population change must go beyond the 'big' versus 'small' Australia dichotomy.</span> <span class="attribution"><span class="source">AAP/David Crosling</span></span></figcaption></figure><p><em>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers to take a broader look at the State of Australia; our health, wealth, education, culture, environment and international standing.</em></p>
<hr>
<p>Australia is currently the <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3101.0Sep%202013?OpenDocument">fastest-growing OECD nation</a>. In 2013, Australia’s population grew by 1.8% compared with the OECD average of 0.7%. This is not as high as the 2.2% in 2008, which was the most rapid rate of growth since 1960. However, among Asian countries, only Singapore and Afghanistan have populations that are growing faster.</p>
<h2>How we’re doing now</h2>
<p>High levels of <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3101.0Sep%202013?OpenDocument">net migration gain</a> (1.1% in 2012-13) – the highest rate in the OECD – are fuelling most of the growth. The Australian government is almost unique in its ability to control the numbers settling permanently in the country, with only New Zealanders (30,115 in 2013) not subject to a cap. The Abbott government has largely <a href="http://www.immi.gov.au/about/reports/annual/2012-13/pdf/2012-13-diac-annual-report.pdf">maintained the skilled and family migration quotas</a> of the Labor government but reduced the refugee/humanitarian quota (from 20,000 in 2012-13 to 13,750 in 2013-14).</p>
<p>In addition to permanent migrants, at any one time around one million foreigners are in Australia as visitors or temporary residents. Levels of temporary migration have remained high with 457 visa holders, working holiday makers and students all increasing in 2013 compared with 2012. </p>
<p>Emigration from Australia counterbalances immigration to some extent. In 2012-13, Australia recorded 369,459 permanent and long-term departures compared with 675,941 arrivals.</p>
<p>Net international migration accounted for <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/3101.0Main+Features1Sep%202013?OpenDocument">60% of Australia’s population growth</a> in 2013. The remainder was <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3101.0Sep%202013?OpenDocument#Publications">due to natural increase</a> – the excess of births over deaths.</p>
<p>The Australian total fertility rate in 2013 was 1.951, a little below the recent peak of 1.963 in 2009 but still high by OECD standards. <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3302.02012?OpenDocument">Mortality improvements</a> continue, with <a href="http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/4125.0main+features3110Feb%202014">life expectancy</a> at birth being 79.9 for males and 84.3 for females. This is respectively 13.8 years and 13.7 years higher than for people born in the year after World War Two.</p>
<p>The biggest recent change, however, has been in the number of extra years that we can expect an Australian turning age 50 to live. Since 1970 this has increased 8.9 years for men and 7.3 years for women. In this context, it doesn’t seem misplaced to increase the eligibility age for the pension by five years.</p>
<p>But there is a cloud on the mortality horizon. The OECD has identified Australia as one of the world’s most obese nations with <a href="http://www.oecd.org/australia/Health-at-a-Glance-2013-Press-Release-Australia.pdf">28.3% of Australian adults obese</a> and another 35% overweight. If this does not half the incremental improvement in life expectancy, it will increase the death rate and prevent older Australians remaining longer in the workforce.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/48100/original/hfztz9cy-1399590343.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/48100/original/hfztz9cy-1399590343.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=387&fit=crop&dpr=1 600w, https://images.theconversation.com/files/48100/original/hfztz9cy-1399590343.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=387&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/48100/original/hfztz9cy-1399590343.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=387&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/48100/original/hfztz9cy-1399590343.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=486&fit=crop&dpr=1 754w, https://images.theconversation.com/files/48100/original/hfztz9cy-1399590343.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=486&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/48100/original/hfztz9cy-1399590343.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=486&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Obesity may increase the death rate and prevent older Australians remaining longer in the workforce.</span>
<span class="attribution"><span class="source">AAP/John Pryke</span></span>
</figcaption>
</figure>
<h2>How we got here</h2>
<p>There can be little doubt that the average standard of living of Australians has improved over the last decade. Australia, by any measure, is a wealthy country but a key issue relates to how this wealth is distributed. </p>
<p>The OECD <a href="http://www.oecd.org/els/soc/income-distribution-database.htm">has found</a> that Australia is the 11th most unequal of 34 OECD members with a Gini Coefficient - a widely used measure of income inequality - above the average. Also, ABS data on income inequality show that the coefficient increased from 0.27 in 1981-82 to 0.328 in 2009‑10. The rich have become richer with the top 20% of income earners receiving over 40% of total household income compared with 38% in the mid-1990s. </p>
<p>However, disposable income levels of the two lowest quintiles have risen, although their share of total income has fallen. Social policy researcher Peter Whiteford <a href="https://theconversation.com/income-and-wealth-inequality-how-is-australia-faring-23483">has argued</a> that interpretation of these data can be complex, with some wealth distribution data suggesting a more equal distribution than of income. The <a href="http://ppcg.org.au/dev/wp-content/uploads/2011/08/HAIF_report_final.pdf">most recent report</a> of the Australian Social Inclusion Board found some 680,000 Australians (around 5%) experience multiple, entrenched disadvantage.</p>
<p>Australia has eschewed adopting a population policy but has many policies influencing population trends. Despite the issue of asylum seekers dominating migration discussion, they have had an <a href="http://www.immi.gov.au/media/fact-sheets/60refugee.htm#e">infinitesimal impact</a> on population growth, even during 2012‑13 when irregular maritime arrivals peaked at 25,724. </p>
<p>The main driver of continued rapid population growth has been the high immigration intakes during the Howard, Rudd, Gillard and Abbott governments. Skilled migrants have dominated immigration, with their share of the total migration intake increasing from 29.1% in 1993-94 to 69.6% in 2005-06. </p>
<p>The Big Australia vs Small Australia debate flared during the 2010 election campaign but was muted during the mining boom years with discussion of regional labour shortages. The Abbott government has thus far not given any signs of any drastic reduction in immigration levels.</p>
<p>The latest ABS <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3222.02012%20(base)%20to%202101?OpenDocument">population projections</a> released in 2013 largely anticipate higher rates of growth than did either of the two previous series in 2005 and 2008. Even the low-growth scenario envisages an annual net migration gain of 200,000, compared with the most recent net migration gain (2012-13) of 244,371. This would mean the nation’s population grows from 23.2 million currently to 26.1 million in 2021 and 29.3 million in 2031.</p>
<p>The “high-growth” projections assume a net migration intake of 280,000, with the national population reaching 26.8 million in 2021 and 31.9 million in 2031.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/48101/original/cdnqd5gt-1399590648.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/48101/original/cdnqd5gt-1399590648.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=384&fit=crop&dpr=1 600w, https://images.theconversation.com/files/48101/original/cdnqd5gt-1399590648.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=384&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/48101/original/cdnqd5gt-1399590648.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=384&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/48101/original/cdnqd5gt-1399590648.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=482&fit=crop&dpr=1 754w, https://images.theconversation.com/files/48101/original/cdnqd5gt-1399590648.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=482&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/48101/original/cdnqd5gt-1399590648.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=482&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The main driver of continued rapid population growth has been the high immigration intakes during recent governments.</span>
<span class="attribution"><span class="source">AAP/Dan Peled</span></span>
</figcaption>
</figure>
<h2>The next ten years</h2>
<p>Ageing is clearly of significance yet it is extremely predictable. Hence, Australia should be initiating all of the policies needed to ensure we meet its challenges but at the same time take full advantage of what has been called the “longevity dividend”. </p>
<p>Despite the different ABS population projections, the low and high projection series show virtually no difference with respect to the numbers aged 65-plus that they anticipate in 2021 and 2031 (2%).</p>
<p>There are few iron-clad certainties in Australia’s future but the doubling of the population aged over 65 in the next quarter century is one of them. We need to develop a comprehensive set of coherent, integrated policies not just relating to population but involving employment, health, social security and social inclusion. </p>
<p>This should not only allow us to best meet the challenges this presents but also identify and include policies that maximise all of the opportunities that ageing can present.</p>
<p>Historically, national discussion on population has largely been a debate between supporters of zero growth and those of a “big” Australia of 50 million or more residents. It has involved the extremes talking past each other and has been very short on broad community involvement and balanced discussion based on evidence derived from the best science. Growth and sustainability have been seen as mutually exclusive goals and equity and fairness have rarely been considered. </p>
<p>Developing policies to shape the level and nature of future population change is an important national priority but must involve a broad-based national conversation and go beyond the “big” versus “small” Australia dichotomisation. Australia’s major political parties have avoided such a discussion, not only because of the heat generated by the two extreme positions but also because both those extremes are represented within each party’s ranks. </p>
<p>A national conversation that is not dominated by interest groups but is inclusive and informed by evidence is necessary. Few discussions will have a greater influence on the Australia that our children and grandchildren inherit.</p>
<hr>
<p><strong>Further reading:</strong> <a href="https://theconversation.com/topics/state-of-australia">The State of Australia series</a></p><img src="https://counter.theconversation.com/content/26084/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Graeme Hugo receives funding from the Australian Research Council.</span></em></p>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers…Graeme Hugo, ARC Australian Professorial Fellow , University of AdelaideLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/263232014-05-08T20:38:33Z2014-05-08T20:38:33ZThe state of Australia: cultural economy<figure><img src="https://images.theconversation.com/files/47831/original/2qmn5j9s-1399337504.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The state of culture in Australia? Basically, it’s in rude health</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/arselectronica/4308925550/in/photolist-7yLnrQ-7yN6nb-7BtLcP-7Bun38-7Bxzm5-7yGA2p-7yGA1k-7yNTJS-7BtLca-7yK7yR-7yK7xt-7Bybey-7Bun4V-7BuBXK-7Bybhy-7BybfC-7BuBVB-7BtLba-7BuyxV-7By4Vy-7By4Wo-7BuBWR-7By4Y9-7BuyzV-7By4Xj-7BA1om-7yLnmw-7Bwcn2-7yGA4i-7yGzWi-7Bwckp-5j1Q5m-5j1VAb-7yGzZH-7yN6uj-7BuyAT-7yGA2R-7BwciK-7yGA52-5j6Es1-7Buqgi-7yGzYX-7yGzY8-7yN6sj-7yNTP7-5j1KJw-7yN6tj-5j1TLj-5j1HBW-7BAJPd">Ars Electronica</a></span></figcaption></figure><p><em>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers to take a broader look at the State of Australia; our health, wealth, education, culture, environment, well-being and international standing.</em></p>
<hr>
<p>Naturally, federal budgets are fretful times for economic sectors underwritten by discretionary public expenditure. The arts and cultural sector is composed of parts that rely heavily on public funding (such as heritage, museums), parts that are a mixture of public and private (such as film, television, radio), and parts that are largely private (fashion, design, video games). Obviously, some parts of this sector therefore have more reason for trepidation than others.</p>
<p>The recent report from the <a href="http://www.ncoa.gov.au/">Commission of Audit</a> makes clear that there is indeed a budget crisis – although <a href="https://theconversation.com/australias-economy-is-healthy-so-how-can-there-be-a-budget-crisis-26036">not everyone</a> would see things that clearly. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/47835/original/ys3xmv6j-1399338216.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/47835/original/ys3xmv6j-1399338216.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/47835/original/ys3xmv6j-1399338216.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=905&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47835/original/ys3xmv6j-1399338216.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=905&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47835/original/ys3xmv6j-1399338216.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=905&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47835/original/ys3xmv6j-1399338216.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1137&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47835/original/ys3xmv6j-1399338216.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1137&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47835/original/ys3xmv6j-1399338216.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1137&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Neal Sanche</span></span>
</figcaption>
</figure>
<p>But if we can accept for a moment there <em>is</em> such a crisis, political reality indicates it will need to be met with expenditure cuts as well as tax increases (although the Abbott government did make an election promise not to do this). As <a href="https://theconversation.com/commission-of-audit-and-the-arts-cuts-are-not-galore-26211">I previously noted on The Conversation</a>, those spending cuts – come May 13 – will probably not have much impact on arts and culture in this budget cycle (although the Commission did recommend that <a href="https://theconversation.com/proposed-merger-of-screen-australia-and-australia-council-spells-incoherence-26178">Screen Australia face funding cuts</a>).</p>
<p>So what then is the state of culture in Australia? Basically, it’s in rude health. We know this from government data itself. The Australian Bureau of Statistics collects a variety of statistics, although as with most aggregate economic data, there are several years of lag between gathering and reporting. </p>
<p>In February of this year the ABS released an experimental set of <a href="http://www.abs.gov.au/AusStats/ABS@.nsf/Latestproducts/5271.0Main%20Features12008-09?opendocument&tabname=Summary&prodno=5271.0&issue=2008-09&num=&view=">cultural and creative activity satellite accounts</a>. These are for 2008-9.</p>
<h2>How we’re doing now</h2>
<p>The ABS Satellite account for 2008-9 shows the contribution of the cultural and creative economy to Australian GDP was A$86 billion, which is almost 7%. Cultural activity makes up A$50b of that, and creative activity is larger, at A$80b (a A$42b overlap of cultural and creative explains how these numbers add up to A$86b).</p>
<p>Public cultural spending was A$7.6b. Some A$2.3b of this was from federal spending, about half of which was for public broadcasting.</p>
<p>A <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features40Jun+2011">2010 survey</a> carried out by the ABS indicates that Australians get a regular fix of culture, with about 85% reporting attending a cultural event, the most popular being cinema, but with music festivals, parks, and museums and galleries not too far behind.</p>
<p>Private cultural spending in 2010 was just under A$20b, with television, books and film capturing the bulk of that spending. According to the <a href="https://www.ato.gov.au/About-ATO/Research-and-statistics/In-detail/Tax-statistics/Taxation-statistics-2010-11/">Australian Tax Office</a>, just A$28 million was donated to cultural organisations from tax-deductible private ancillary funds.</p>
<p>By industrial sector, gross value added (GVA) estimates run to A$65b, the majority of which was broken down as:</p>
<ul>
<li>design (A$26b)</li>
<li>literature and print media ($13bn)</li>
<li>fashion ($12bn)</li>
<li>broadcasting, digital media and film ($8bn). </li>
</ul>
<p>The cultural and creative sector produces more GVA than health care, but less than construction.</p>
<p>There were about 1 million employees in this sector, with a quarter of those working in cultural and creative occupations outside the cultural and creative industries. There are more than 160,000 business or non-profit organisations in the cultural and creative industries sector.</p>
<p>International comparisons are plagued by definitional consistencies, but the ABS reports that Australia’s cultural and creative sector is very similar to that of Canada, Finland, Spain and the UK by most measures. (The largest, on a per-capita measure, is <a href="http://arts.gov/sites/default/files/nea_guide_white_paper.pdf">the US</a>.)</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/47834/original/gjn7r4sq-1399338094.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/47834/original/gjn7r4sq-1399338094.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/47834/original/gjn7r4sq-1399338094.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47834/original/gjn7r4sq-1399338094.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47834/original/gjn7r4sq-1399338094.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47834/original/gjn7r4sq-1399338094.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47834/original/gjn7r4sq-1399338094.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47834/original/gjn7r4sq-1399338094.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Yu Shibao</span></span>
</figcaption>
</figure>
<h2>How we got here</h2>
<p>There is much more detail that we could report from the above statistics. Yet we don’t need to worry too much about the lags in the data or the crude aggregations because a few overarching findings and long-run trends stand out.</p>
<p>The first is that the cultural and creative industries are large, vibrant and growing, and it is the creative, market-facing parts that are doing most of the heavy lifting.</p>
<p>That is entirely unsurprising, and nor – I will stress to add – is it an ideological point. These sectors can grow because they face not just millions of Australians but billions of global consumers. </p>
<p>The single most important factor driving and shaping the Australian cultural and creative economy is the global marketplace. And within that, Australia’s single greatest advantage is that we are a multi-cultural English-speaking nation, meaning that we have a comparative advantage in cultural content production for a global market.</p>
<p>The factor most accelerating this is the rise and spread of digital and computational technologies into all corners of cultural and creative production. This lowers the cost of production and distribution, increases access and variety, creates new platforms, and makes possible new business models.</p>
<p>A further significant trend is the long-run <a href="http://www.step.org/global-wealth-report">growth in household wealth globally</a>, not just in Australia. This increases the quantity of household spending and, consequentially, demand for cultural and creative content. Furthermore, <a href="http://www.theatlantic.com/international/archive/2013/07/does-art-help-the-economy/277842/">as demonstrated recently in the UK</a>, a strong case can be made connecting the growth of the arts and cultural sector with GDP growth. </p>
<p>These three factors – globalisation, technology and wealth – are not the only things that matter, but to a first order of approximation they are most of the story of how we got here.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/47833/original/m6h2qmzg-1399337844.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/47833/original/m6h2qmzg-1399337844.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/47833/original/m6h2qmzg-1399337844.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=379&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47833/original/m6h2qmzg-1399337844.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=379&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47833/original/m6h2qmzg-1399337844.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=379&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47833/original/m6h2qmzg-1399337844.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=476&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47833/original/m6h2qmzg-1399337844.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=476&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47833/original/m6h2qmzg-1399337844.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=476&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">National Museum of Australia.</span>
<span class="attribution"><span class="source">Sam Ilić </span></span>
</figcaption>
</figure>
<h2>The next ten years</h2>
<p>The most important policy forces affecting the cultural and creative economy in Australia are not those from within Australian cultural and creative industry policy. They are the factors affecting Australia’s position <em>vis-à-vis</em> the global economy, digital technology development and adoption, as well as the factors affecting household wealth.</p>
<p>These are factors relating to bilateral trade agreements (and the intellectual property provisions written into these), the state of the National Broadband Network, Australian tax policy, the vibrancy of the mining sector, and so on, will likely continue to have a far greater impact on the state of Australia’s cultural economy than, say, specific details pertaining to the funding of the National Gallery.</p>
<p>What is likely to change? We might usefully distinguish among the cultural economy between those parts that are more in the manner of <a href="http://en.wikipedia.org/wiki/Public_good">public goods</a> (such as national galleries, museums, and so on) from those that are subsidised industries (such as public support to the film industry).</p>
<p>Public goods suffer <a href="http://www.standard.net/topics/opinion/2011/01/14/free-rider-problem">free-rider problems</a>, and are best supplied through public funding. We can expect that Australian cultural public goods will continue to be funded, and maybe even receive greater funding as Australian wealth grows.</p>
<p>But the subsidised industries part of the cultural sector will face a tougher time. These can survive through lobbying and scare campaigns. But they also tend to be eventually defeated by innovative competition and new technologies.</p>
<p>It’s unclear where, for example, <a href="https://theconversation.com/topics/the-future-of-public-broadcasting">Australia’s public broadcasters</a> fall on this spectrum. In the early years they very clearly were a public good. They still are in the case of some remote and regional broadcasting. But they are a purely subsidised industry in most urban markets and many media segments.</p>
<hr>
<p><strong>Further reading:</strong> <a href="https://theconversation.com/topics/state-of-australia">The State of Australia series</a></p><img src="https://counter.theconversation.com/content/26323/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jason Potts is affiliated with the Institute of Public Affairs.</span></em></p>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers…Jason Potts, Professor of Economics, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/262302014-05-08T04:37:40Z2014-05-08T04:37:40ZThe state of Australia: the economy<figure><img src="https://images.theconversation.com/files/47961/original/xws5pzmr-1399449736.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">What is the true state of Australia's economy?</span> <span class="attribution"><span class="source">Image sourced from www.shutterstock.com</span></span></figcaption></figure><p><em>In the lead up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers to take a broader look at the State of Australia; our health, wealth, education, culture, environment and international standing.</em></p>
<hr>
<p>Australia has had unprecedented growth in GDP since December 1991 and avoided the both the 1998 Asian financial crisis and the global financial crisis in 2008, without a recession. Compared to most of the OECD countries who have suffered increases in unemployment and long term unemployment since then, Australia has powered ahead. </p>
<p>It is true that as the global financial crisis hit and tax revenues fell, Australia introduced a series of stimulus measures to tackle the crisis that moved the economy from a budget surplus to budget deficits. For what they are worth, the rating agencies have given Australia a triple A rating, which means that they are not concerned about our budget deficits or debt.</p>
<h2>How we are doing now</h2>
<p>As the commodity boom has come to an end, the Australian economy has slowed down but has not gone into a recession. It is certainly not in crisis. In my recent paper, <a href="http://ftp.iza.org/dp7505.pdf">Australia: the miracle economy</a>, I studied the behaviour of the Australian economy compared to some of the OECD countries: according to the OECD our economy has had a stellar performance. </p>
<p>On important macroeconomic indicators, including GDP, unemployment, inflation, Current Account Balances, and debt, Australia compares very favourably. Our GDP has been growing consistently, and our unemployment rate has been consistently lower than most OECD economies since the GFC. </p>
<p>Australia has the lowest debt (measured by Gross Financial Liabilities) in the OECD. In 2013, Australia’s Debt to GDP ratio was 34.4 %, Germany was 80.9 %, the UK at 111.6 %, USA at 106.5 % and the OECD average was 112.0 %. Debt crisis? What debt crisis?</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/47952/original/wygjz2nc-1399447632.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/47952/original/wygjz2nc-1399447632.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=433&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47952/original/wygjz2nc-1399447632.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=433&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47952/original/wygjz2nc-1399447632.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=433&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47952/original/wygjz2nc-1399447632.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=544&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47952/original/wygjz2nc-1399447632.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=544&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47952/original/wygjz2nc-1399447632.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=544&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Government Debt to GDP Ratio.</span>
</figcaption>
</figure>
<p>Even Germany took until the end of 2012 to catch up with Australia. Some of the OECD countries have been concerned about deflation, but Australia has managed to go through the crisis with negligible inflation. We have had current account deficits (CAD) for more than a hundred years, except for very brief spells of a surplus. However, since the GFC, only Germany and Italy have had lower CADs.</p>
<p>However, the Coalition government has been arguing that the economy is in dire straits and is going to collapse because of a large budget deficits and a ballooning government debt. It is threatening to cut back on welfare, health, education, and the public service. These mirror austerity measures that have failed to return many OECD countries back to growth. But the same time it wants to abolish the mining tax and the carbon tax: one set of policies to hit the poor and another to help the rich. </p>
<p>Given the announcement of cuts back on government expenditures at a time the economy is slowing, recent proposals to introduce an income tax - or deficit levy - would lead to an even greater fall in aggregate demand and increased unemployment.</p>
<h2>How we got here</h2>
<p>Thanks to several mining booms and strong demand from Australia’s largest trading partner, China, the Australian economy has had continuous growth since December 1991, with GDP growing even through the GFC. The OECD has <a href="http://www.oecd.org/eco/surveys/australia2012.htm">repeatedly stressed</a> the stellar performance of the Australian economy, saying that with “its 21 years of uninterrupted growth, Australia stands out among OECD countries.”</p>
<p>In comparison, most of the other OECD economies faced falls in GDP that continued for several years.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/47954/original/jw4ypw6x-1399447752.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/47954/original/jw4ypw6x-1399447752.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=426&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47954/original/jw4ypw6x-1399447752.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=426&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47954/original/jw4ypw6x-1399447752.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=426&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47954/original/jw4ypw6x-1399447752.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=535&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47954/original/jw4ypw6x-1399447752.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=535&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47954/original/jw4ypw6x-1399447752.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=535&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Australia leads in the GDP Race.</span>
</figcaption>
</figure>
<p>In the United States, GDP levels did not reach the pre-recession period until 2011; similarly, Germany - the wunderkind economy - did not reach the pre-recession levels until the same year. </p>
<p>While is hotly debated, many economists are convinced (including Nobel Laureate Joe Stiglitz) that the timely introduction of a stimulus package was instrumental in avoiding a recession. At the same time countries like Greece and Portugal, Spain, Italy that introduced major austerity measures are still wallowing in a deep recession.</p>
<h2>What’s next?</h2>
<p>While our manufacturing sector has underperformed due to strength of the Australian dollar, the OECD points to a favourable future for our economy:</p>
<blockquote>
<p>Non-mining tradable sectors have struggled with the strong exchange rate driven by the mining boom. However, fundamentals remain solid with the unemployment rate close to its structural rate and inflation and public debt low. Growth strengthened in 2012, and the outlook is positive, even though there are mainly negative risks stemming from the external environment, to which Australia is however less vulnerable than many other OECD countries.</p>
</blockquote>
<p>In its most <a href="rapid%20growth%20in%20house%20prices%20and%20mortgage%20lending%20requires%20continued%20close%20attention.">recent report on Australia</a>, the OECD forecasts a general pick-up in demand to off-set declining investment in the resources sector, although it warned “rapid growth in house prices and mortgage lending requires continued close attention”. </p>
<p>The IMF downgraded its economic forecasts for Australia late last month in a move <a href="http://www.abc.net.au/news/2014-04-28/imf-downgrades-economic-growth-forecasts-for/5416704">interpreted</a> as an implied message not to bring down too harsh a budget. </p>
<p>It is certainly true that the Australian population is ageing and that older people require more spending on health. Over the future years, we would certainly see increasing expenditure on health, partly due to ageing but also due to the improvements in medical knowledge. </p>
<p>The National Disability Insurance Scheme (NDIS) will certainly make increasing demands on the budget. But as long as we as a society believe it is a good thing, we need to find finances to pay for it. To increase government revenues, we should consider an inheritance tax, remove negative gearing, close down overseas detention centres, introduce a progressive Medicare levy and remove the concessions on capital gains taxes, to name a few.</p>
<p>As long as our interest on debt does not grow faster than our growth rate of GDP, the economy will not collapse.</p>
<p>The Financial industry’s gurus, the ratings agencies, have continued to give Australia triple A ratings, <a href="http://www.smh.com.au/business/the-economy/australias-triplea-safe-amid-strong-finances-moodys-20121114-29blj.html">just as Moody’s in its recent report</a>. It is clear that the finance industry, the OECD, and the IMF are not worried about the health of the Australian economy or its budget deficits or debt. Why, in that case, do the politicians both on the right and the left mouth these words of “budget responsibility” and “budget surpluses”?</p>
<hr>
<p><strong>Further reading:</strong> <a href="https://theconversation.com/topics/state-of-australia">The State of Australia series</a></p><img src="https://counter.theconversation.com/content/26230/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Raja Junankar is also Emeritus Professor, University of Western Sydney and Research Fellow of the Institut zur Zukunft der Arbeit (IZA) in Bonn, Germany.
He has received funding from the OECD.</span></em></p>In the lead up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers…Raja Junankar, Honorary Professor, Industrial Relations Research Centre, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/260482014-05-07T20:37:25Z2014-05-07T20:37:25ZThe state of Australia: our international standing<figure><img src="https://images.theconversation.com/files/47849/original/37c53rdb-1399349163.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C2856%2C2069&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Australia under the Abbott government has so far been treated to a succession of foreign policy gaffes, including with Indonesia.</span> <span class="attribution"><span class="source">EPA/Adi Weda</span></span></figcaption></figure><p><em>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers take a broader look at the State of Australia; our health, wealth, education, culture, environment, well-being and international standing.</em></p>
<hr>
<p>The conduct of Australia’s foreign policy under the Rudd and Gillard governments was anything but inspiring. Under Tony Abbott, we have so far been treated to a succession of gaffes bordering on farce.</p>
<h2>How we’re doing now</h2>
<p>Since its election victory last September, the Abbott government has managed to arouse the ire of three important neighbours (Indonesia, China and East Timor) through words and gestures that are at best ill-informed and at worst foolishly provocative. </p>
<p>Under <a href="http://www.abc.net.au/news/interactives/operation-sovereign-borders-the-first-6-months/">Operation Sovereign Borders</a>, refugee boats are being pushed back into Indonesian waters against <a href="http://www.smh.com.au/federal-politics/political-news/marty-natalegawa-says-turn-backs-not-helpful-as-greens-accuse-government-of-lying-about-boat-arrivals-20140207-325hk.html">Indonesia’s express wishes</a> and Australian vessels have more than once <a href="http://www.abc.net.au/news/2014-02-19/navy-breached-indonesian-waters-six-times-review-finds/5270478">breached Indonesia’s maritime boundary</a>. We place great store on our sovereignty, but seem strangely unable to consider the sovereignty of our neighbours.</p>
<p>The <a href="https://theconversation.com/topics/spy-standoff">spying saga</a> regarding <a href="http://www.abc.net.au/news/2013-11-18/australia-spied-on-indonesian-president-leaked-documents-reveal/5098860">Australian interception</a> of the personal phone calls of Indonesian president Susilo Bambang Yudhoyono, including Abbott’s <a href="http://www.smh.com.au/federal-politics/political-news/indonesia-retaliates-on-spying-20131120-2xvxu.html">ill-judged response</a>, has added fuel to the fire. By the end of 2013 the bilateral relationship was in a state of serious disrepair, where it <a href="https://theconversation.com/abbott-spurning-indonesias-invite-confirms-relationship-troubles-26107">continues to languish</a>.</p>
<p>The relationship with China is more complex and the potential ramifications of misjudgement even more serious. Though China is now by far Australia’s most important trade partner, Australia has chosen to upgrade its relations with Taiwan and has sided <a href="http://www.abc.net.au/news/2013-11-28/australia-taking-sides-in-china-defence-zone-stoush/5122756">openly and somewhat stridently</a> with the United States and Japan in condemning China for declaring an Air Defence Identification Zone in the disputed region of the East China Sea.</p>
<p>To add insult to injury, Abbott described Japan as an <a href="http://www.lowyinterpreter.com.au/post/2013/12/03/Australia-Japan-Abbott-uses-the-A-word.aspx?COLLCC=453581390&">“ally”</a> (which is not technically accurate) and our <a href="http://www.theaustralian.com.au/national-affairs/policy/tony-abbott-reaches-out-to-australias-best-friend-in-asia-japan/story-fn59nm2j-1226736508726">“best friend in Asia”</a>. This comes at a time when Japan has one of the most <a href="https://theconversation.com/senkaku-islands-the-latest-battleground-as-japan-gets-tough-under-abe-19650">nationalist governments</a> of its post-war history, committed to expanding the country’s military arsenal and revisiting its peace constitution. The Chinese <a href="http://www.smh.com.au/federal-politics/political-news/chinas-rebuke-of-julie-bishop-rudest-conduct-seen-in-30-years-says-senior-foreign-affairs-official-20140227-33jid.html">response</a> was predictably fierce and immediate.</p>
<p>In the case of East Timor, attorney-general George Brandis last December <a href="http://www.smh.com.au/federal-politics/political-news/asio-raids-office-of-lawyer-bernard-collaery-over-east-timor-spy-claim-20131203-2yoxq.html">approved an ASIO raid</a> on the office of lawyer Bernard Collaery, who is acting for East Timor in its <a href="https://theconversation.com/explainer-australia-and-timor-leste-in-the-hague-21215">spying case against Australia</a>. East Timor, one of the world’s poorest countries, is attempting to have what it considers an unequal oil and gas treaty it signed with Australia quashed in The Hague.</p>
<p>Much can be added to this sorry list of mis-steps. Unseemly pressure has been brought to bear on Papua New Guinea and Nauru to help the government deliver on its election promise to “stop the boats”. Discussions are underway to have asylum seekers <a href="http://www.smh.com.au/federal-politics/political-news/cambodia-agrees-in-principle-to-resettle-asylum-seekers-bound-for-australia-20140430-zr1jz.html">redirected to Cambodia</a>, another poor country with a <a href="https://theconversation.com/why-resettling-asylum-seekers-in-cambodia-is-fraught-with-risk-23591">deplorable human rights record</a>. </p>
<p>The budget deficit has also been used to justify cutting back the projected growth of Australian overseas aid by <a href="http://www.abc.net.au/news/2014-01-18/federal-government-announces-details-of-foreign-aid-cuts/5206594">as much as A$4.5 billion</a> over the next four years. Yet defence spending is <a href="http://www.theaustralian.com.au/national-affairs/policy/new-white-paper-urges-doubling-of-defence-spending-to-50bn/story-e6frg8yo-1226838711659">planned to rise</a> to $50 billion over the next ten years, nearly double the current defence budget.</p>
<p>At the UN General Assembly, Australia <a href="http://www.abc.net.au/news/2012-11-27/australia-to-abstain-from-palestinian-vote/4395000">abstained</a> on two key resolutions calling on Israel to cease its settlement activities, widely <a href="https://theconversation.com/settlements-illegal-under-what-law-take-your-pick-minister-22341">regarded as illegal</a>, and to “comply scrupulously” with the 1949 Geneva Convention. The resolutions were carried by an overwhelming majority of UN members, including most allies of the United States.</p>
<p>Australian interest in international climate change and nuclear disarmament negotiations has also visibly diminished.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/47850/original/7kk77jqb-1399349376.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/47850/original/7kk77jqb-1399349376.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47850/original/7kk77jqb-1399349376.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47850/original/7kk77jqb-1399349376.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47850/original/7kk77jqb-1399349376.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47850/original/7kk77jqb-1399349376.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47850/original/7kk77jqb-1399349376.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Australia’s relationship with China is complex and the potential ramifications of misjudgement are extremely serious.</span>
<span class="attribution"><span class="source">EPA/Ed Jones</span></span>
</figcaption>
</figure>
<h2>How we got here</h2>
<p>Striking though it is, this catalogue of policy failures does not signify a marked break with the Labor years. Neither Kevin Rudd nor Julia Gillard was able to set Australia’s China policy on a sound footing. The simplistic idea that Australia could rely on China for its prosperity and the United States for its security was never seriously questioned – nor was Australia’s costly and unproductive military commitment in Afghanistan.</p>
<p>Rudd’s poorly articulated proposal for the creation of an <a href="http://www.theage.com.au/national/rudds-grand-vision-for-asiapacific-20080604-2lw1.html">Asia-Pacific community</a> soon fizzled in the absence of prior consultation with Asian neighbours. </p>
<p>Gillard oversaw the production of the <a href="http://www.asiaeducation.edu.au/verve/_resources/australia-in-the-asian-century-white-paper.pdf">Australia in the Asian Century</a> white paper, but its sanitised contents, with their fixation on trade and investment opportunities, were strangely silent on the geopolitical and security implications of Asia’s rise and on the cultural gap still separating Australia from its Asian neighbours.</p>
<p>Labor’s steady abandonment of anything resembling a humane asylum seeker policy meant acceptance of a <a href="http://www.abc.net.au/unleashed/3886792.html">Pacific solution</a>, leading first to the abortive approaches to <a href="http://news.smh.com.au/breaking-news-national/gillard-unveils-east-timor-solution-20100706-zy9s.html">East Timor</a> and <a href="http://news.smh.com.au/breaking-news-national/gillard-unveils-east-timor-solution-20100706-zy9s.html">Malaysia</a>, and then to the re-opening of the <a href="http://www.smh.com.au/federal-politics/political-news/gillard-signs-manus-island-agreement-20120908-25kyt.html">Manus Island detention centre</a>. And, it was Labor governments that authorised the spying operations aimed at the highest levels of the Indonesian and East Timor governments.</p>
<p>A Labor government did <a href="http://www.abc.net.au/news/2012-10-19/australia-wins-seat-on-un-security-council/4321946">secure a seat</a> on the UN Security Council, but it seemed averse to or incapable of crafting a coherent set of initiatives. Rudd <a href="http://www.heraldsun.com.au/news/rudd-wants-to-change-the-world/story-e6frf7jo-1111116585807">set up a commission</a> for the elimination of nuclear weapons, but its key recommendations were left to gather dust.</p>
<p>How is such lack of drive and imagination to be explained? Why is it that both major parties find it so difficult to rethink Australia’s place in the world? No doubt several factors are at work.</p>
<p>The movers and shakers of the two major political parties and the political class at large remain profoundly insular in their thinking and parochial in their politics. They do not grasp the far-reaching regional and global changes already underway and their dramatic impact on economy, environment, culture and governance everywhere, not least in Australia.</p>
<p>The reality, however, is that many of the principles and premises that have guided Australia’s external relations since 1945 have lost whatever relevance they may once have had.</p>
<p>We are seeing an unprecedented shift in economic power and political influence away from the west and towards the east. European empires have dissolved and America’s ascendancy is slowly but surely coming to an end. The old reliance on great and powerful friends – first Britain, then the United States – has reached its use-by date.</p>
<p>In the coming years, China, India, South Korea, Indonesia, but also Russia, Brazil and others will play increasingly important roles not just in trade and investment, but in shaping security, political and environmental agendas.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/47851/original/9vkd246s-1399349547.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/47851/original/9vkd246s-1399349547.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=340&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47851/original/9vkd246s-1399349547.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=340&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47851/original/9vkd246s-1399349547.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=340&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47851/original/9vkd246s-1399349547.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=427&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47851/original/9vkd246s-1399349547.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=427&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47851/original/9vkd246s-1399349547.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=427&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Labor did secure a seat on the UN Security Council but seemed averse to or incapable of crafting a coherent set of foreign policy initiatives.</span>
<span class="attribution"><span class="source">EPA/Andrew Gombert</span></span>
</figcaption>
</figure>
<h2>The next ten years</h2>
<p>The critical decisions Australia has to make do not involve choosing between the United States and China, nor between China and Japan. While maintaining strong and co-operative relations with all three, it has to develop its own independent diplomacy and put an end to its subservience to US diplomatic priorities and the US military and intelligence establishments. </p>
<p>Australia needs to work closely with middle and small powers to develop mechanisms that can help defuse maritime disputes, especially in the East and South China Seas.</p>
<p>A serious policy of engagement with Asia entails, of course, more than military security and economy. The environment, human rights, poverty reduction and transnational crime require urgent attention. Where states violate the rights of their own people – whether in China, North Korea or Burma – Australia must be prepared to speak strongly on behalf of the vulnerable.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/47854/original/km4pj5pk-1399350964.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/47854/original/km4pj5pk-1399350964.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=806&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47854/original/km4pj5pk-1399350964.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=806&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47854/original/km4pj5pk-1399350964.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=806&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47854/original/km4pj5pk-1399350964.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1012&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47854/original/km4pj5pk-1399350964.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1012&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47854/original/km4pj5pk-1399350964.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1012&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A proper regional approach could provide a solution to the asylum-seeker question.</span>
<span class="attribution"><span class="source">AAP/Eoin Blackwell</span></span>
</figcaption>
</figure>
<p>Similarly, Australia has to distance itself from surveillance activities, including those of the United States, for they erode the democratic fabric of society. Such pressure, however, is more likely to be effective if it is carefully applied in concert with others and if it engages not just government, but business and civil society. </p>
<p>A similar approach could facilitate a region-wide, long-term solution to the processing and resettlement of asylum seekers.</p>
<p>Such a multifaceted agenda must necessarily take advantage of the opportunities for multilateral solutions and be sensitive to the diverse mindsets, interests, cultures and languages of our Asian partners. </p>
<p>To this end, after years of neglect, it is time to revamp the Department of Foreign Affairs and Trade, endow it with much greater resources and skills and an enhanced capacity to support initiatives and projects in conflict prevention, mediation, peacebuilding and importantly regional and global disarmament.</p>
<p>In all of this, the federal government has an important initiating and co-ordinating role. But its efforts and resources must be carefully pooled with those of state and local governments, and with the energies and expertise of business, professional and community organisations. </p>
<p>Effective processes of consultation at all levels and a renewed national educational strategy will be critical to positioning Australia as a thriving, confident, internationally minded country equal to the challenges of the coming decades.</p>
<hr>
<p><strong>Further reading:</strong> <a href="https://theconversation.com/topics/state-of-australia">The State of Australia series</a></p><img src="https://counter.theconversation.com/content/26048/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joseph Camilleri does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers…Joseph Camilleri, Emeritus Professor, La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/260352014-05-07T05:00:24Z2014-05-07T05:00:24ZThe state of Australia: our environment<figure><img src="https://images.theconversation.com/files/47588/original/jhsnskpm-1398986609.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Four out of five Australians live within 50 kilometres of the coast – but expanding cities are taking a toll on our environment.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/witnesskingtides/6758764497/in/photolist-nscNKE-nrUoCe-nhFLq5-mNRv3t-mNRWzn-fUvWc1-kXmjoA-kNVo9k-kfaztK-hResir-fz5JGy-fjm7oZ-dZAuq7-dZAwxN-dXefhg-dppQxT-bTdLPK-bRsPF4-byh2py-bifrdn-bifqXg-bifqPg-bifrkt-asrpsu-eA2o6z-a6yxNt-a6yxnV-a1EQqV-a1HGQj-9ThgRg-9Thhbt-9ThgwX-9QPHaT-9MoobH-9LWB5X-9JcDz7-9HkooY-9GMwgD-9Gi7cf-9Gi6vW-9CZC5u-9pEGxi-9pEGr8-9pEGvn-9pEGti-9oUxTn-86XggT-86XfGv-871qTG-871oHu">Paul Boyce/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span></figcaption></figure><p><em>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers to take a broader look at the State of Australia; our health, wealth, education, culture, environment and international standing.</em></p>
<hr>
<p>The state of Australia’s environment is a real worry – and we have the report cards to prove it. </p>
<p>For the past two decades, successive federal governments have received a series of independent, five-yearly <a href="http://www.environment.gov.au/topics/science-and-research/state-environment-reporting">State of the Environment</a> reports. I was appointed to chair the first national assessment, which delivered its findings in May 1996. And what <a href="http://www.environment.gov.au/topics/science-and-research/state-environment-reporting/soe-1996/soe-1996-report">we concluded</a> then – a lifetime ago for an 18-year-old reading this today – is even truer now: </p>
<blockquote>
<p>Some aspects of Australia’s environment are in good condition by international standards … Unfortunately, [this] report also shows that Australia has some serious environmental problems.</p>
</blockquote>
<h2>How we’re doing now</h2>
<p>Whether you read the latest <a href="http://www.environment.gov.au/topics/sc%5Bience-and-research/state-environment-reporting/soe-2011">2011 State of the Environment report</a>, or the <a href="http://www.environment.gov.au/topics/science-and-research/state-environment-reporting/soe-1996/soe-1996-report">first from 1996</a>, many of Australia’s biggest environmental problems have remained the same. But what has changed is the scale and speed of action now needed to fix them.</p>
<p>Some of those <a href="http://www.environment.gov.au/system/files/pages/ce99e0e1-1c6f-4a10-8a2d-db22f0e0d4f3/files/key-findings.pdf">persistent problems include</a>:</p>
<ul>
<li>worsening traffic snarls in poorly connected, sprawling cities;</li>
<li>population pressures along our much-loved coastline; </li>
<li>degradation of productive rural land; </li>
<li>major declines in native wildlife; </li>
<li>the growing global challenge of rising greenhouse gas emissions; and</li>
<li>major gaps in our knowledge and monitoring across many areas. As any management expert will tell you, you can’t properly manage what you don’t measure.</li>
</ul>
<p>While most advanced nations have recognised the need to protect productive land, we continue to lose it to urban expansion, a direct consequence of the high rate of population growth, compounded by urban development policies encouraging further sprawl. </p>
<p>That sprawl in turn contributes to one of key factors causing Australians to have the highest rate of greenhouse gas production per person of any affluent country. The very low population density of our urban areas gives us extremely inefficient urban transport systems, with inadequate public transport and a high dependence on private cars.</p>
<p>Pressures on coastal areas also continue to be driven by our unusually high rate of population growth, augmented by social and economic changes that are driving people from inland regions. </p>
<p>Despite the recent expansion of renewable energy systems, we still get most of our electricity from burning high-emissions fossil fuels, as shown below. Overall, our dependence on coal has fallen, but gas use has risen rapidly.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/47336/original/xfpftysy-1398824798.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/47336/original/xfpftysy-1398824798.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/47336/original/xfpftysy-1398824798.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=386&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47336/original/xfpftysy-1398824798.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=386&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47336/original/xfpftysy-1398824798.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=386&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47336/original/xfpftysy-1398824798.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=485&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47336/original/xfpftysy-1398824798.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=485&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47336/original/xfpftysy-1398824798.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=485&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">What’s powering Australia?</span>
<span class="attribution"><a class="source" href="http://bree.gov.au/sites/default/files/files//publications/aes/2013-australian-energy-statistics.pdf">2013 Australian Energy Update</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>And there has been no observable slowing in the rate of <a href="https://theconversation.com/topics/australian-endangered-species">loss of our biodiversity</a>, largely because the main causes have not been addressed: loss of habitat and introduced species. Our inland rivers remain a concern, especially the Murray-Darling system, largely because of the past enthusiasm for allowing extraction of river water for irrigation.</p>
<p>So if we’ve known for decades that all of these areas need to improve, why haven’t we done more about it?</p>
<h2>How we got here</h2>
<p>During the last decade, national governments have given some attention to the symptoms of our environmental decline. The state of the Murray-Darling system is one example. Although the previous government backed away from the original plan, which would have given the river system at least a fighting chance of recovering its health, the revised document at least stopped further deterioration. </p>
<p>In the case of our greenhouse gas emissions, the mix of policies adopted by the Rudd and Gillard governments produced a measurable reduction and we did <a href="https://theconversation.com/australia-trounced-kyoto-climate-target-new-report-reveals-25744">actually meet our Kyoto target</a>, although that is mainly because the Howard government had demanded a goal that was <a href="http://www.abc.net.au/science/earth/climate/diary.htm">uniquely generous</a> and clearly out of line with our global responsibilities. </p>
<p>But the underlying problem is a failure to recognise and address the driving forces of environmental decline. </p>
<p>The 1996 State of the Environment report found that the problems we faced stemmed from a growing population, increasing consumption, lifestyle, and technology choices.</p>
<p>Yet we continue to have a rate of population growth higher than that of much poorer countries. Consumption per person is still increasing. And we continue to use outdated technologies like coal-fired electricity and large, inefficient cars.</p>
<iframe width="100%" height="325" frameborder="0" scrolling="no" marginwidth="0" marginheight="0" src="https://www.google.com.au/publicdata/embed?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=sp_pop_grow&scale_y=lin&ind_y=false&rdim=region&idim=country:AUS:CAN:USA:CHN:NZL:IND&ifdim=region&hl=en_US&dl=en&ind=false"></iframe>
<p>The Rudd and Gillard governments did little to address these underlying drivers of environmental problems. That was bad enough.</p>
<p>Now, the Abbott government appears actively hostile to environmental protection. It has abandoned its responsibility for <a href="https://theconversation.com/explainer-one-stop-shop-for-environmental-approvals-19515">approving major projects by passing the job to the states</a>, is trying to <a href="http://www.smh.com.au/federal-politics/political-news/labor-and-greens-join-forces-to-reject-carbon-tax-repeal-bills-in-first-vote-20140320-354aw.html">roll back the policies that cut greenhouse gas emissions</a>, has <a href="http://www.abc.net.au/news/2013-12-18/funding-cut-to-environmental-defenders-offices/5164934">reduced funding for bodies that actively protect the environment</a> and is proposing an absurd <a href="https://theconversation.com/direct-action-policy-still-leaves-loopholes-open-for-big-polluters-25918">“direct action” scheme</a> that is not seen even by its supporters as an adequate response to climate change.</p>
<p>The government also continues to promote ridiculously high rates of population growth, distracting attention from its policy by demonising <a href="http://www.refugeecouncil.org.au/r/stat-int.php">the relatively small number of people</a> who seek asylum here. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/47530/original/mhh9wcs8-1398925140.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/47530/original/mhh9wcs8-1398925140.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/47530/original/mhh9wcs8-1398925140.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=550&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47530/original/mhh9wcs8-1398925140.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=550&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47530/original/mhh9wcs8-1398925140.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=550&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47530/original/mhh9wcs8-1398925140.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=691&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47530/original/mhh9wcs8-1398925140.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=691&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47530/original/mhh9wcs8-1398925140.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=691&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">How Australia’s population changed between 2000 and 2010.</span>
<span class="attribution"><a class="source" href="http://www.environment.gov.au/system/files/pages/dd9888fd-a0ba-4115-900a-8fc02f0b5714/files/soe2011-report-coasts.pdf">State of the Environment 2011</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Just as the Rudd and Gillard governments did, the current government is ignoring the consequences of rapid population growth. That growth is a factor in high unemployment levels. It’s also causing chaos as state governments struggle with the spiralling costs of urban infrastructure: roads, public transport, water, power and waste treatment. </p>
<p>Our domestic greenhouse gas production is now swamped by <a href="http://www.smh.com.au/comment/peabody-and-the-coal-juggernaut-20140429-zr17k.html">our exports of fossil fuels</a>, but the government continues to promote further expansion. The underlying issue is the ideology of the government, an obsession with economic growth and a studied refusal to recognise what science has been telling us for at least 40 years: it is not possible even in principle to have unlimited growth in a closed system. The continuing attempt to pursue growth at all costs will inevitably have very serious consequences.</p>
<h2>The next ten years</h2>
<p>The next State of the Environment report is due in 2016. What will it conclude? I wish it weren’t the case, but I suspect it will keep repeating what has been said before in 2011, 2006, 2001 and back to 1996.</p>
<p>Australia is still blessed with many beautiful, unique places, plants and animals, including natural wonders from the Kimberley to Kakadu, and the Great Barrier Reef to Tasmania’s wilderness. Yet as a nation, we’re still not acting to conserve the natural fortune we’ve inherited for generations well beyond the next decade.</p>
<p>For at least the next few years, the prospects for environmental leadership from the current federal government look bleak.</p>
<p>Nearly a generation ago, I signed off <a href="http://www.environment.gov.au/system/files/pages/9da175c0-7b61-4d0b-8544-a053c9aa2900/files/ex-summary.pdf">the first State of the Environment</a> by stressing that while we had found Australia faced serious environmental challenges, most of those problems did have solutions. Today, that’s still true.</p>
<p>But environmental organisations are increasingly seeing it as futile to attempt to persuade closed minds in Canberra. Instead, they are putting more effort into engaging with community groups and concerned citizens to change the political framework in which governments operate. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/47368/original/ndbm3349-1398837172.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/47368/original/ndbm3349-1398837172.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/47368/original/ndbm3349-1398837172.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=158&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47368/original/ndbm3349-1398837172.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=158&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47368/original/ndbm3349-1398837172.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=158&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47368/original/ndbm3349-1398837172.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=198&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47368/original/ndbm3349-1398837172.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=198&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47368/original/ndbm3349-1398837172.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=198&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Solar isn’t just for the rich. The five areas of Australia with the largest number of solar systems – Bundaberg and Hervey Bay in Queensland, Mandurah in WA, and Werribee and Hopper’s Crossing in Victoria – all have below state average income levels.</span>
<span class="attribution"><a class="source" href="http://reneweconomy.com.au/2014/rooftop-solar-uptake-still-highest-in-low-income-australia-63263">REC Agents Association/Renew Economy</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Ordinary people are voting with their wallets to <a href="http://reneweconomy.com.au/2014/rooftop-solar-uptake-still-highest-in-low-income-australia-63263">install solar panels</a> and <a href="https://theconversation.com/why-is-electricity-consumption-decreasing-in-australia-20998">save more energy at home</a>. </p>
<p>Movements like <a href="http://www.lockthegate.org.au/">Lock the Gate</a> are the mood of the future, uniting rural producers, scientists and environmentalists to protect productive land. In the absence of national leadership, people across Australia will have to lead instead.</p>
<hr>
<p><strong>Further reading:</strong> <a href="https://theconversation.com/topics/state-of-australia">The State of Australia series</a></p><img src="https://counter.theconversation.com/content/26035/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ian Lowe was president of the Australian Conservation Foundation for a decade, from 2004 until last month.</span></em></p>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers…Ian Lowe, Emeritus Professor, School of Science, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/262362014-05-06T20:37:48Z2014-05-06T20:37:48ZThe state of Australia: education<p><em>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers take a broader look at the State of Australia; our health, wealth, education, culture, environment, well-being and international standing. Here, Peter McPhee talks about the state of education in Australia.</em></p>
<hr>
<p>One day last week I had the pleasure of picking up my grandchildren from their primary schools. My granddaughter is at a large, bustling outer-suburban state school where the central classroom block gives every sign of not being maintained since being built in the 1950s: the paint is flaking off wooden walls which have rotted through in many places. </p>
<p>Thanks to his parents’ sacrifices, my grandson, who has mild autism, attends a special preparatory program at an elite private school with small classes and equipped with superb facilities. The “central block” is a heritage mansion. The contrasts are unsettling.</p>
<p>What the schools have in common is a dedicated, purposeful and welcoming staff who provide reassurance to parents that they are seeking to realise the core promise of a national education system: the development of the academic and social skills of individual students to enable them to have fulfilling, productive lives and to be good citizens. But the stark contrasts signal key elements in the agitated debates about the state of Australia’s education.</p>
<h2>How we’re doing now</h2>
<p>A brief report card would read: “quite well given the circumstances; clear potential to do better”.</p>
<p>An <a href="http://www.oecd.org/education/">OECD statistical report</a> on international education trends from 2001 to 2012 showed that while the average public expenditure was 6.2% of GDP and rising, in Australia it actually fell, from 4.9% to 4.4%. In Finland – so often the benchmark – it increased from 6.1% to 7%. Australia ranks 22nd among the 29 OECD countries. The <a href="http://www.acer.edu.au/documents/PISA-2012-In-Brief.pdf">2012 Programme for International Student Assessment</a> (PISA) report showed worrying signs that Australia’s comparative performance was slipping in mathematics, science and reading.</p>
<p>While there is heated debate about a causal link between PISA performance and education funding, what all sides agree on is the fundamental importance of the expertise and social esteem of teachers at every level. The <a href="http://www.curriculum.edu.au/leader/have_we_mistaken_the_symptom_for_the_problem*:_ex,4622.html?issueID=9691">attrition rates</a> of new teachers (estimates vary from 25% to 40% within five years) should concern us.</p>
<p>The achievements of our higher education sector have been remarkable given the doubling of student-staff ratios over 25 years: about 40% of young Australians now have a bachelor qualification compared with 3% of adults in 1970, and 19 of our universities <a href="http://www.shanghairanking.com/">are in the top 500</a> in the world for their research. </p>
<p>But whether our measures of quality are international research rankings, greater levels of participation, or rates of graduate employment, there are other, sobering indicators. While subjective - based on judgements by 16,000 senior academics in 150 countries – it may be revealing that our top six universities all fell in the <a href="http://www.timeshighereducation.co.uk/world-university-rankings/2013/reputation-ranking">Times Higher Education Reputational Rankings in 2013</a>.</p>
<h2>How we got here</h2>
<p>We know that interested parties use statistics to suit their ends. So the Australian Education Union <a href="http://www.aeufederal.org.au/Publications/2011/Schoolfundreviewsub.pdf">points to an</a> 11% increase in funding of state schools in 2009-12, while that for Catholic and Independent schools increased by 20%. In contrast, the <a href="http://docs.education.gov.au/system/files/doc/other/review-of-funding-for-schooling-final-report-dec-2011.pdf">Gonski Review of Funding for Schooling</a> has been lambasted by <a href="http://www.theaustralian.com.au/opinion/columnists/gonski-must-be-shown-the-door/story-fn7078da-1226835313831">some commentators</a> because state schools would receive 50% more by 2017 while the non-government sector’s increase would be just 23%, and the largest increases would be for schools in low socioeconomic areas.</p>
<p>Regular debates in the education discourse are about <a href="https://theconversation.com/class-size-gonski-and-schools-funding-what-are-the-facts-8934">class sizes</a>. The strong evidence is that the school systems we admire are characterised by smaller classes. In particular, students with specific needs, like my grandson, or those from disadvantaged backgrounds, <a href="https://theconversation.com/smaller-class-sizes-improve-student-achievement-26155">benefit</a> from being in smaller groups.</p>
<p>Just as a more effective funding model is the necessary, if not exclusive, condition for the improvement of our schools, and our international standing, so it is for higher education. After several years of Consumer Price Index increases and a demand-driven funding model, <a href="http://www.timeshighereducation.co.uk/news/australian-higher-education-hit-by-large-funding-cut/2003207.article">the decision</a> by former education minister Craig Emerson to reduce funding by A$2.3 billion across four years has caused cost-cutting and redundancies throughout the sector, mirroring those in state TAFE systems. </p>
<p>Current education minister Christopher Pyne’s endorsement of his predecessor’s funding cuts is the saddest indicator of all, that public funding of universities is not a key measure of electoral popularity. Universities may still be public spirited, but they are no longer publicly funded.</p>
<h2>The next ten years</h2>
<p>Pyne will receive a new report on school funding by the end of the year. The polarity of debate about the Gonski funding model has raised doubts about whether prime minister Tony Abbott will keep his <a href="http://www.abc.net.au/news/2013-12-02/abbott-gonski/5129118">pre-election promise</a> to fund at least the first four years of the six in the report’s recommendations.</p>
<p>Similarly, state education sectors and their teachers are at differing stages of implementing the national curriculum in the first four areas – English, History, Science and Mathematics. </p>
<p>However, educators in the Prep to Year 10 years are mired in uncertainty about the fate of the Gillard national project as they await the <a href="http://www.studentsfirst.gov.au/review-australian-curriculum">Donnelly-Wiltshire curriculum review</a>, expected at the end of July. Will its authors be content with a victory in the “history wars” or will they surrender to the phalanx of “states’ rights” and return to the way things were before? Eight school curricula in a nation of 24 million people seems nonsensical to many. </p>
<p>There is currently great <a href="https://theconversation.com/five-reasons-why-queensland-should-adopt-a-national-atar-score-like-everyone-else-25253">inconsistency</a> across states in the assessment and tertiary ranking of Year 12 students. Uniformity would be a significant step in the direction of a properly national higher education system. </p>
<p>The national mission of higher education – ranging from small private providers to the Group of Eight – must be to ensure that the increasing rates of secondary school completion (a true success story) align with the promise to provide tertiary students with access to a diverse range of courses of good quality and a rich student experience.</p>
<p>One positive outcome of the equally hotly debated <a href="http://www.education.gov.au/report-review-demand-driven-funding-system">Kemp-Norton</a> review of the demand-driven system of higher education may well be the freedom for faculties of education to set the fees necessary to provide higher quality training and professional development. </p>
<p>We all have a vested interest in ensuring that teaching attracts those with the passion and abilities to meet national aspirations for our young people. The more expensive model where teachers require a postgraduate qualification is one demonstrably successful way to achieve that.</p>
<p>If the Kemp-Norton recommendations are accepted, the great challenge for universities will be to ensure that the mix of government and student contributions results in the ability to fund the quality of education students deserve, equitably across degree programs.</p>
<p>It is many years since our Federal Parliament acted with a bipartisan sense of mission on a matter of national urgency. Notwithstanding pre-election commitments to Gonski, there is every sign that the future funding of the education of our young will remain the subject of partisanship and uncertainty.</p>
<hr>
<p><strong>Further reading:</strong> <a href="https://theconversation.com/topics/state-of-australia">The State of Australia series</a></p><img src="https://counter.theconversation.com/content/26236/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter McPhee does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers…Peter McPhee, Professorial Fellow in the Melbourne Graduate School of Education, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/260372014-05-06T04:33:41Z2014-05-06T04:33:41ZThe state of Australia: welfare and inequality<figure><img src="https://images.theconversation.com/files/47773/original/b5s2m34m-1399258152.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The fair go has been selectively reinterpreted as applying only to competitive opportunities for the economically productive.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/takver/8689297482/">John Englart (Takver)/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p><em>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers to take a broader look at the State of Australia; our health, wealth, education, culture, environment, well-being and international standing.</em></p>
<hr>
<p>Is Australia a good place to live in these days? On a range of economic indicators we are doing well, but who has and who has not benefited socially from our two decades of growth? Can we still call ourselves egalitarian now there are visible social fractures? </p>
<p>The <a href="http://www.treasury.gov.au/PublicationsAndMedia/Publications/2013/Economic-Roundup-Issue-2/Economic-Roundup/Income-inequality-in-Australia">measures of inequality</a> are increasing, with the <a href="http://www.equalitytrust.org.uk/">potential to damage social well-being</a>. Progress, as such, is no longer used as a term to describe social change as the reforms of the post-war period, such as poverty reduction and gender equity, slow and even reverse.</p>
<h2>How we’re doing now</h2>
<p>Today’s policies tend to punish those who do not fit the new, leaner, economic model. There is no valuing of alternative social contributions: parenting, Indigenous traditional roles, volunteers who care for others. We turn back and punish boat arrivals who seek asylum. Recent <a href="http://www.scanlonfoundation.org.au/research.html">data on social inclusion</a> show visible flaws in our social cohesion as seen by newer arrivals.</p>
<p>In Australia’s last federal budget, <a href="http://www.abc.net.au/news/2013-05-09/interactive-budget-2013-where-will-your-tax-go/4682404">34.68%</a> (A$138 billion) of the total spend was allocated to social security and welfare programs. Of this, 13.75% ($54.8 billion) went to assistance for the aged, 8.77% ($34.9 billion) went to assisting families with children, while just 2.4% ($9.55 billion) went to assisting the unemployed and sick.</p>
<p>In terms of welfare spending as a percentage of Gross Domestic Product (GDP), Australia ranks <a href="http://stats.oecd.org/Index.aspx?DataSetCode=SOCX_AGG">comparatively low</a> compared to other OECD nations at 19.5% in 2013. This ranks behind countries such as France (33%), Sweden (28.6%) and the United Kingdom (23.8%). However, it is true that Australia’s welfare system is <a href="https://theconversation.com/robin-hood-and-piggy-bank-what-the-welfare-state-does-for-us-25790">relatively efficient</a>.</p>
<p>Despite doing much better in the recent financial crisis than other OECD countries, Australia is not necessarily a comfortable place to be for many people. </p>
<p>Australia’s welfare policies provide many examples of why some people are struggling. Sole Parent Allowances and Disability Support Payments have recently been tightened to ensure fewer people can claim them, despite <a href="https://theconversation.com/an-800-000-plus-jobs-gap-between-welfare-to-work-and-reality-22226">no evidence that this increases workforce participation</a>. People are being <a href="https://theconversation.com/is-unsustainable-welfare-growth-really-being-driven-by-newstart-22288">transferred to the inadequate Newstart</a> payment. This locks the best part of one million people into penury and covers all those of working age who don’t fit respectable categories of payment.</p>
<p>These are mean changes, justified as “assisting” recipients to get jobs, but which mainly increase the numbers of forced job seekers for far too few available jobs. As both major parties support such changes, the gaps between haves and have-nots are increasing under the current government directions.</p>
<h2>How we got here</h2>
<p>Australians embedded in our early history the idea of a fair go, albeit omitting the original inhabitants. By the end of the 19th century, this gave rise to a new nation that offered possibilities of opportunities for all, not just the privileged. </p>
<p>Australia started well as one of the early adopters of the age pension, the vote for women and the basic wage, which showed commitments to ensuring public involvement in setting standards for “white men” at least. The legislated basic wage – which offered a decent living to a man and his dependents in 1908 – signalled a social contract that was clearly aimed at a fair go. </p>
<p>The post-war welfare state was devised to ensure quality public education, shorter working hours, national health services and diversity in a good society until the 1980s when social policy was overlaid by economic goals.</p>
<p>Social policy researcher Veronica Sheen in The Conversation <a href="https://theconversation.com/the-commission-of-audit-wants-to-rip-up-australias-social-contract-26188">summed it up</a> last week:</p>
<blockquote>
<p>The social contract – the suite of policies, legislation, programs, health care and social services – has served to ensure that every Australian is able to have a basic but decent standard of living. It has been carefully crafted over the 20th century since federation.</p>
</blockquote>
<p>However, this implicit social contract has been gradually undermined since then as neoliberal policy models of a minimalist state started to displace more socially driven policy priorities. The decreasing inequality of the post-war welfare state, pushed by the Whitlam government but generally retained by the Fraser government, was replaced, initially slowly, under Hawke but very clearly through the 1990s. The fair go/mateship goal became about individualised competitive opportunities and the focus shifted from social change to economic growth.</p>
<p>Those whom society failed, and often discriminated against, were gradually redefined as the problem. This shows clearly this century as <a href="http://www.smh.com.au/national/welfare-crackdown-misses-targets-20100310-pzea.html">Welfare to Work</a> under the Howard government was extended under the ALP. More controls and cuts were imposed, with current proposals including increases in <a href="https://theconversation.com/creeping-spread-of-income-management-must-be-challenged-24560">compulsory income management</a> and further <a href="https://theconversation.com/commission-of-audit-report-released-experts-respond-26177">cuts to entitlements</a>. </p>
<p>The egalitarian concept of a fair go is selectively interpreted as applying only to the economically productive, but the change has never been openly discussed or even clearly acknowledged.</p>
<h2>What’s next?</h2>
<p>The <a href="https://theconversation.com/commission-of-audit-lays-path-for-deep-cuts-26172">Commission of Audit</a> may be designed as a Golem monster to scare the punters and make lesser changes in next week’s federal budget seem reasonable. However, it has created something of a firestorm because it has, for once, clearly articulated the gradual and now almost complete demise of the implicit social contract. </p>
<p>This has caused widespread negative reactions across the community. This includes many relatively conservative voters who value the more traditional approaches and see themselves threatened by changes they don’t like. Even if the Commission of Audit report suggestions are not taken up, the distrust of the government may remain high as the suggested changes have gone too far.</p>
<p>Undermining the idea of a universal health service by excluding the better-off from its services, proposing universal co-payments and decreasing the value of base pensions and the minimum wage all add up to a serious attack on the public role of the state. The report is seen as indicating the government’s intention to “wean Australians off the government teat”, which excludes all those not defined as truly needy. The idea of a partnership between community and state is identified as passé.</p>
<p>The rationale for such changes is clearly related to prime minister Tony Abbott’s mantra of Australia being <a href="http://www.theaustralian.com.au/national-affairs/election-2013/abbott-claims-victory-and-says-australia-is-open-for-business/story-fn9qr68y-1226714414009">“open for business”</a>. We are redefined as a corporate nation – rather than a nation state – to suit the private sector. </p>
<p>The budget is likely to be bad for most families, the poor and the many who do not earn enough to pay for private services. It is possible that the current set of policy proposals may re-ignite discussion on what makes a good society. Can we re-invigorate the concept of public services as tax-funded options that serve us all well in areas that are not really appropriate for commercial providers?</p>
<hr>
<p><strong>Further reading:</strong> <a href="https://theconversation.com/topics/state-of-australia">The State of Australia series</a></p>
<p><em>Editor’s note: thank you to everyone who participated in our Author Q&A. You can read our readers’ questions and Eva’s answers below.</em></p><img src="https://counter.theconversation.com/content/26037/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eva Cox does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers…Eva Cox, Professorial Fellow Jumbunna IHL, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/259202014-05-05T20:35:44Z2014-05-05T20:35:44ZThe state of Australia: health<p><em>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers take a broader look at the State of Australia; our health, wealth, education, culture, environment, well-being and international standing.</em></p>
<hr>
<p>In the lead up to this year’s <a href="https://theconversation.com/topics/federal-budget-2014">federal budget</a>, the government has been telling us short-term budget pain is needed to secure our long-term economic future. </p>
<p>The release of the National Commission of Audit <a href="http://www.ncoa.gov.au/">report</a> last week reinforced the government’s message that we need to do something more than tinker around the edges to get our economy back into shape. </p>
<p>But is Australia’s health system so bad it needs some kind of shock therapy to ensure it meets our future needs? </p>
<h2>How are we doing now?</h2>
<p>In 2011-12, Australia <a href="http://www.aihw.gov.au/publication-detail/?id=60129544658&tab=2">spent</a> 9.5% of GDP on health, just higher than the <a href="http://www.oecd.org/health/health-systems/oecdhealthdata2013-frequentlyrequesteddata.htm">OECD</a> average of 9.3%. Twenty years ago, Australia spent 7.1% of GDP on health, which was about the OECD average. These figures somewhat undermine the argument that we have a <a href="https://theconversation.com/rationing-care-vs-increasing-taxes-the-health-system-sustainability-myth-24774">crisis</a> in health spending. </p>
<p>When you take a look at the headline indicator for health status, life expectancy, Australians are doing fairly well by global standards. In 2011, the average <a href="http://www.compareyourcountry.org/health/index.php">life expectancy</a> for all Australians was 82 years, making us the seventh longest-living people among OECD nations. </p>
<p>There are some concerns, however, that we might not be living such long lives in the future. In 2011, <a href="http://www.oecd.org/els/health-systems/Health-at-a-Glance-2013-Chart-set.pdf">Australians drank</a> a little more alcohol than the OECD average (ten versus 9.3 litres per person per year). And we’re also a lot fatter: 21% of the population report being obese, compared with an OECD average of 15%. </p>
<p>While these indicators and global comparisons are useful high-level measures of our health system’s effectiveness, we need to get beyond averages to find the true picture. </p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/47634/original/dv4k7jkf-1399009976.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/47634/original/dv4k7jkf-1399009976.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=849&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47634/original/dv4k7jkf-1399009976.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=849&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47634/original/dv4k7jkf-1399009976.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=849&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47634/original/dv4k7jkf-1399009976.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1066&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47634/original/dv4k7jkf-1399009976.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1066&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47634/original/dv4k7jkf-1399009976.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1066&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">More Australians are obese than the OECD average.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-117272272/stock-photo-bathroom-scale-overloaded-with-the-pointer-pointing-over-one-hundred-and-twenty-five-kg.html?src=aXQ4bCiNGYor23T6EWsg9w-1-25">Olivier Le Moal/Shutterstock</a></span>
</figcaption>
</figure>
<p>Most people know – whether from personal experience or just watching the news – that our health system does not serve us all equally well. Some people cannot get access to essential health care, such as pharmaceuticals, general practitioners or dentists, when they need it simply because of cost. </p>
<p>Other people, especially those living in rural and remote areas, struggle to get access to services close to home. </p>
<p>And with some types of elective surgery and cancer services now predominately done in private hospitals, people without private health insurance can find themselves waiting for an excessively long time for treatment. </p>
<p>If the care you get depends to some extent on where you live, what you earn or whether or not you have private insurance, we have a problem with equitable access to care. And it’s a serious one too because there is strong <a href="http://www.aihw.gov.au/socio-economic-disadvantage-and-health/">evidence</a> showing the people in most need of health care are the ones least able to afford it. </p>
<p>Getting timely access to care is one thing, but the quality of it matters too. In an <a href="http://www.commonwealthfund.org/%7E/media/Files/Publications/Fund%20Report/2010/Jun/1400_Davis_Mirror_Mirror_on_the_wall_2010.pdf">international survey by the Commonwealth Fund</a>, Australia’s performance was patchy on a series of quality measures. </p>
<p>When compared with seven other developed countries (including the United States, United Kingdom and New Zealand), Australia ranked sixth overall on a series measures looking at medical errors. </p>
<p>We ranked fourth on how well care was coordinated between different health professionals and third on how well care was centred around patient’s needs and preferences. </p>
<h2>How we got here - past reforms</h2>
<p><a href="https://theconversation.com/explainer-what-is-medicare-and-how-does-it-work-22523">Medicare</a> is the foundation of the Australian health system. The scheme, now 30 years old, is funded partly through our progressive tax system, and this is one of the key reasons our health system is considered to be <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2560789/pdf/10916912.pdf">relatively equitable</a>. While Medicare has served us well, the time is right to consider reforms. </p>
<p>Medicare was originally developed to help people get access to basic medical and hospital care; in the 1960s when the scheme was conceived, most people suffered from relatively straightforward acute health conditions (infections, for instance, and traumatic injuries). Treatment from GPs, medical specialists and public hospitals was often all people needed to be cured.</p>
<p>Now, with more than <a href="http://www.aihw.gov.au/chronic-diseases/">seven million</a> Australians having at least one chronic disease, people’s health needs are more complex. For some, a basic level of care might mean being treated by a GP, physiotherapist, dietitian, occupational therapist and an array of medical specialists. Medicare now funds a limited range of non-medical services, but much of what people need still falls outside its scope. </p>
<p>Medicare also works on an insurance model, with patients reimbursed for each visit to the doctor, and doctors paid largely on a fee-for-service basis. This model works reasonably well for one-off visits to the GP, but provides few <a href="https://theconversation.com/phase-out-gp-consultation-fees-for-a-better-medicare-13690">incentives</a> for health-care providers to work co-operatively and ensure patients receive coordinated care. </p>
<p>Over the last 20 years or so, federal and state governments have tried many different ways of improving the coordination of care. Some focused on reforms to financing health care, for example, the <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Publications_Archive/CIB/cib9899/99CIB11">coordinated care trials</a> of the 1990s. </p>
<p>Others have tried to improve coordination by making changes to the governance of the health system at the local level – the more recent establishment of <a href="https://theconversation.com/let-medicare-locals-find-their-feet-and-improve-primary-care-22008">Medicare Locals</a> is an example. </p>
<p>In some <a href="http://sydney.edu.au/medicine/public-health/menzies-health-policy/research/homd.php">areas</a>, the long struggle to improve the coordination of care is starting to pay off, but these successes have yet to be replicated cross the country. </p>
<h2>What’s next?</h2>
<p>The National Commission of Audit <a href="http://www.ncoa.gov.au/">report</a> recommended some major changes to the structure and operation of our health system, and a 12-month period to review some of the proposals it outlined. But before the government looks at them in any detail, it’s important to recognise the limits of what Medicare, or any health system, can do to improve the length and quality of people’s lives.</p>
<p>It is well established that health services are just one of many factors that influence health outcomes. Other important <a href="http://www.who.int/hia/evidence/doh/en/">determinants</a> of health include the social, economic and physical environment, and people’s individual characteristics and behaviours. To improve the health of Australians, governments will also need to make gains in some of these other areas that determine health outcomes.</p>
<p>Health systems, however, do have an influence on health outcomes. A large <a href="http://www.globalizationandhealth.com/content/7/1/42">study</a> of 136 countries found that there was a correlation between rates of death and certain health system variables. Countries with more doctors, lower out-of-pocket costs, and higher total expenditure, for example, had lower premature death rates at the national level. </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/47636/original/q3ph2s7k-1399010602.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/47636/original/q3ph2s7k-1399010602.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/47636/original/q3ph2s7k-1399010602.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/47636/original/q3ph2s7k-1399010602.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/47636/original/q3ph2s7k-1399010602.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1130&fit=crop&dpr=1 754w, https://images.theconversation.com/files/47636/original/q3ph2s7k-1399010602.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1130&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/47636/original/q3ph2s7k-1399010602.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1130&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">When you take a look at the headline indicator for health status, life expectancy, Australians are doing fairly well.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/mercyhealth/7142786421">Mercy Health/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>While this study includes many less wealthy countries than Australia, it shows that the design and operation of our health system does matter, even to headline indicators such as mortality. </p>
<p>The Australian health system clearly has some problems that need to be addressed, but they are long-standing ones, and ones shared by most other <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2560789/pdf/10916912.pdf">OECD countries</a>. </p>
<p>We are unlikely to solve persistent challenges, such as ensuring equitable access to well-coordinated care, with quick fixes (we have tried most of them before). Nor are they likely to be solved by reforms naïvely borne out of economic theory, or imported holus bolus from other countries. </p>
<p>To improve Australia’s health system, we need to carefully consider a range of reforms and evaluate their potential to solve the most important problems we face (and this is not overall health expenditure). </p>
<p>If we don’t, we will simply add to the growing pile of overly ambitious reform proposals that have fallen by the wayside and made no difference at all. </p>
<hr>
<p><strong>Further reading:</strong> <a href="https://theconversation.com/topics/state-of-australia">The State of Australia series</a></p>
<p><a href="http://www.informa.com.au/conferences/health-care-conference/future-of-medicare-conference">The Future of Medicare Conference</a> opens on 13th August in Sydney.</p><img src="https://counter.theconversation.com/content/25920/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anne-marie Boxall works for the Australian Healthcare and Hospitals Association</span></em></p>In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers…Anne-marie Boxall, Director, Deeble Institute for Health Policy Research, Australian Healthcare and Hospitals Association; Adjunct Lecturer, University of SydneyLicensed as Creative Commons – attribution, no derivatives.