SUBJECTS: National Accounts; global economic recovery
The envy of the world, that's how the Australian Treasurer Wayne Swan is describing the nation's economic expansion. I spoke with him and I began by asking him what he thinks will happen once those stimulus measures start being pulled back.
We've achieved a remarkable result for the calendar year 2009. We were the strongest growing advanced economy, quite a remarkable feat but if it wasn't for stimulus our economy during 2009 would have contracted in three quarters. But we are now seeing the underlying strength of the Australian economy emerge from the impact of the global recession and that is assisted by demand for our commodities, it's assisted by the relative health of our financial system and it's assisted I think by a degree of confidence in Australia that is not evident in many other countries and that's a product I think of the cooperation we've had between our employers and employees, the flexibility of our product markets. All of those things I think make Australia very well placed to take advantage of growth opportunities that will emerge particularly in this region. So I'm optimistic about Australia's future but I'm also cautious about the global outlook knowing the headwinds that exist elsewhere in the global economy.
As you mentioned, the Asian region has been a big buyer of Australian natural resources in particularly China or also more traditional trading partners like Japan and now India as well. Do you have any concerns that the Australian economy could become too reliant on natural resources? Do you see a need in the fairly near future to look at diversifying, deepening, broadening the Australian economic activity?
Well Australia has been a commodity exporter for a long time and we've been a strong commodity exporter to the whole of the region. It's not just a China story, it's not just a Japan story - it's a story about the rest of the region. And we are not just exporting our resources to those countries; the degree of economic linkages across the rest of industry, even to manufacturing industry are strong, But I think as a matter of principle it is prudent for any country not to become too reliant on any particular commodity or for that matter any particular country which is why the Australian government is putting so much emphasis on a future productivity agenda - to lift the productive capacity of our economy across the whole economy. Resources are important, we do need to invest in infrastructure there, but also we need to invest more broadly in the skills of our people and more broadly in infrastructure which lifts the efficiency of our economy, not just in the resources sector but other sectors as well, so that we can be a competitive trading partner across a range of industries and processes.