I bring news. I am alive, well and keen to crack on. I’ve just established a home in Manly in Sydney but will be pursuing projects in both the UK and Australia. I’ve just written a report on high speed broadband in the UK and Australia, which will be launched on 3rd February. I will say more on that in the next blog. In the meanwhile, here are some thoughts on the economies of the two countries.
Just as Blighty was pounding my new hosts in the Ashes , CEBR,one of the best UK economic consultancies published a tongue in cheek report on the good news for the Australian economy being ‘bad news for its cricket’. The latter is contentious ;the former is not. CEBR points out some really big numbers concerning Australia’s economic rise in the last decade or so – and the UK’s relative fall. If you are Australian this is impressive. If you are a Brit, it’s depressing not because of Oz’s great performance but because of the dire one of the UK.
So, Australian GDP has grown by 37.9% in real terms compared with an OECD average of 17.9% .This has shown up obviously in the price of the currency which now more or less has parity with the US dollar.In ten years in cash terms Australian GDP has doubled from 27% of UK GDP in 2000 to 54% in 2010. CEBR calculates that given population growth and the trend in minerals demand, ‘it is likely that Australian GDP will overtake UK GDP in the next 20 years and possibly as early as 2020’. CEBR anticipates growth of 4% per annum sine die for Australia and rather a lot less than 4% for the UK .This latter economy I note actually shrank in size in the last quarter of 2010.
CEBR puts the growth down to liberalisation of the economy under Keating, the reduction in public spending under Howard, the vast mineral wealth of the country currently being consumed by the Chinese economy(growing at 10% per annum) and an influx of enterprising Asian migrants. Whilst I see evidence of under-spending in Australia on infrastructure as a worrying counter-trend – raising the question of whether in fact public spending is just too low in Australia – this is a very benign scenario for the country’s future.Even if you believe there will be a switch over to renewable energy sources in the next generation, that gives Australians 30 years to diversify their economy. They need to fix the roof while the sun is shining. They also need to ensure that their city-planning really delivers on the massive potential of their cities. But than can await another column
And the UK? I note that the outgoing director general of the Confederation of British Industry is now exercised about the lack of a growth strategy from the UK government. One wonders where he’s been since May. There is no plan B . The cuts plan is the growth plan. The UK government really does think that by cutting public spending drastically and doing almost nothing else that UK productivity growth will lift itself from subterranean levels and GDP will reverse its nose dive. I cannot see this working as a theory and I do not see it working in practice.
The results on the ground in the areas I care about look decidedly unpromising. As I write neighbours in Hackney speak of the return of car-theft and drug-dealing at the end of our street,things not seen in the vicinity for maybe a decade. One swallow doesn’t make a spring and 5 break-ins don’t make a recession-induced crime wave.But I’m not optimistic. Are you? I add: I may now be suffering from exile’s syndrome –where everything is both better and worse at home than in your current billet though I’m not sure I’ve yet spotted the down side to living ten minutes from the beach.Give me time!
Filed under: Uncategorized |
Tim Williams 
Sitting in a very cold London on a grey morning it is hard to see a down side to being ten minutes from a sunny beach. Though recalling summer days on Tynemouth Long Sands with sun and a cruel east wind I would want to be assured about temprature, and sea crocodiles.
I am struck by a sense that we have been here before, 30 years ago to be exact.
A Government fanantically opposed to the post war consensus on social justice and economic equity, seeking confrontation with working people and destroying social capital. then as now we are told there is no alternative. That is only true in the sense that to achieve the policy outcomes soiught this is the onl way to do it. This begs the question of whether these are the appropriate policy objectives.
The perils of inadequate investment in infrastructure must be painfully obvious in Australia at this time and not just on the cricket pitch.
There is a limit to the “liberalisation” of labour markets which comes when people are prevented from taking on long term commitments because they are fearful for their livelihoods.
The Government has cleverly positioned it argument about public service workers, caricaturing them as all highly paid adminsitrators. Let’s make it real and personal!
A West London borough with a rapidly growing population of under 25’s, significant youth unemployment and major community cohesion issues is planning to close its youth service. Two days before Christmas my son and all his colleagues were given notice of redundancy, by a Labour Council. Yes I am angry. For 15 years as a volunteer then a sessional worker and finally as a paibd work my son has dealth with young people in levels of distress that I will spare readers from. his work has bene to help them regain soem semsbalnce of self respect and self worth. He cannot afford to buy even the cheapest flat in his area and if he loses his job the cuts to Housing Benefit will mean he has to give up his flat as the benfit will only pay for a room in a shared house.
Cuts are not only affecting the nice to have services. They affecting support to the most vulnerable and those who work with them.
This is a false economy, the impact of closing youth service will be felt very quickly in health services, increased teenage preganancy, more young people entering the criminal justice system, more young people out of education or training. The annual cost of the Youth Service is equivlanet to keeping 6 young people in jail.
Cuts don’t affect others, they affect us all.
At a very crude level and I expect to be howled down for this the youth service delivers an economic benefit by equipping ypng peole for work, helping them gain soft skills and helping them to acquire relevanmt vocational skills at college or school.
To be serious about growth our masters need to be investing in those activities which contribute to achieving it. Not stripping away the foundations.
Tony Hutchinson is right – the Government should heed the lessons of 30 years ago. It won’t of course until things get so bad that it is forced to act (Enterprise Zones and the Heseltine version of City Challenge 1980s style anyone?)
There is a big difference this time of course. In 1979 many voters liked the sound of Thatcher’s “stand on your own two feet” manifesto rhetoric, only regretting it years later. In 2010 there were sufficient sceptics from the outset not to give the Conservatives a Parliamentary majority. This lack of a clear mandate, and even what there was based on manifesto promises that have been casually discarded since, clearly carries with it the risk of a period of social and economic instability far worse than anything we saw in the 1980s. At least we had oil revenues in those days even if they were wasted on needless unemployment. The fact that we all pretty much know where we’re heading makes it even worse.
I was going to quote John Stuart Mill on political stupidity at this stage but Forrest Gump’s “Stupid is as stupid does” (1994) does the job just as well.