Debt. Dollar. Deficits. Three little words so close to the hearts of our contributors in a year dominated by a critical federal election, a waning mining boom and continuing international turbulence.
The September 7 election returned the public debate to its traditional default - the strength of Australia’s economy. As Bill Clinton’s strategist James Carville said, it’s the economy, stupid. And talk we did. During the campaign, various forecasts were presented, then reformulated, budget emergencies were declared and denied and we were apparently awash with debt.
Amid these claims, the Conversation’s FactCheck - launched especially to coincide with the election - delved into the evidence to present the facts on how strong our economy actually was; whether our debt was heading towards European levels; how our car industry subsidies stacked up against other countries (although it appears treasurer Joe Hockey may have missed this one); the real rate of job attrition in manufacturing; foreign investment restrictions on agricultural land; and the Coalition’s paid parental leave scheme, amid many other topics.
This was the year everyone got sober, as the mining boom party ended and it became apparent Australia is now facing a decade of deficits. While many of our writers this year debated the merits or otherwise of running deficits, next year’s debate will centre on what policy levers will be used to balance Australia’s budget. The Abbott government have already indicated expenditure cuts, but what of the need for tax reform to address Australia’s structural deficit? Will there be the courage to grasp the GST nettle, for instance?
The looming structural changes and disruptive forces sweeping through the economy finally became something we couldn’t ignore. In sectors such as manufacturing, announcements from first Ford, and now recently Holden, to cease making cars in Australia by 2017 reveal an uncertain future for the sector. Some of our contributors were bleak: others see opportunities.
This sector’s fortunes were inextricably linked to the strength of the Australian dollar - great for travellers who at times enjoyed an above-parity exchange rate and prospective home owners making the most of Australia’s historically low interest rates, but also troubling for currency-exposed businesses, including Qantas.
Amid the domestic focus, a number of international events dominated. In the debacle of the US government shutdown, our writers reminded us there have actually been 18 shutdowns since 1976. In the fallout of the shutdown, the American dream may have retained its appeal, but the Tea Party reached new levels of unpopularity.
The crisis is over for now, but legislators have just kicked the can down the road – the dysfunction is here to stay. But while the US style may have been awful, its policy substance is sound – and should be broadly continued.
So what else for next year? The Abbott government has announced a Commission of Audit, a plethora of reviews and far-reaching financial services reforms, as it moves to fulfil its pledge to cut red tape and streamline government services. From the looks of the Mid Year Economic and Fiscal Outlook, we can expect the Budget to End All Budgets in May. The new version of the NBN, complete with a new CEO and unburdened by previous promises of reach and speed, promises to take shape.
The veracity of Australia’s claim to be open for business - already tested with the GrainCorp takeover - will come under further scrutiny with a number of pending free trade agreements, including the Trans-Pacific Partnership and bilateral trade negotiations with our largest trading partner, China.
Meanwhile, Australia will take to the international stage to host the G20 from Brisbane. We’ll see you there for all of it next year.
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