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A discussion of what is in store economically for Australians after COVID-19, by one of Australia's leading economic voices.
Reconstruction: Australia after COVID
About the author
John Edwards
John Edwards is a Nonresident Fellow at the Lowy Institute and an Adjunct Professor with the John Curtin Institute of Public Policy at Curtin University.
Until the coronavirus pandemic, nearly two-thirds of Australians had never experienced an economic slump in their working lives. Indeed, nearly half were not yet born when the Australian economy last tipped into recession. Creating a path for Australia through these difficult times requires a careful assessment of where we have come from, where we are, and where we are going.
This book, by one of Australia’s leading economic voices, examines the fractured state of the global economy and financial system, the ailing US economy and its epic contest with China, the global economic order, and what it all means for us.
Reconstruction: Australia after COVID is available for purchase from all good bookstores, and as an e-book.
Continue reading our complementary preview.
In the third decade of the twenty-first century, Australians find themselves in a strange place. Until the coronavirus pandemic, nearly two thirds of Australians had never experienced an economic slump in their working lives. Indeed, nearly half were not yet born or not resident in Australia when the economy had last tipped into recession, in 1991.
For most Australians, the savage economic shock of the pandemic and the subsequent troubled recovery have been the first sustained, widely shared and adverse interruption to their working lives in what was otherwise almost thirty years of unspectacular but sustained prosperity.
Incomes today are lower than they were before the pandemic. Many more Australians are jobless. Government debt is much higher, and much of it is held by the central bank. Decades after the float of the Australian dollar freed the Reserve Bank to manage the economy, power is shifting back to the Treasury. After three decades thriving in a congenial global economy, Australia now finds the world at odds with its interests. Among the slower, America and China are deeply involved in what China's government calls a 'contest', in which Australia should work. Australia is at odds with its economy as its comments are deeply involved in what China's government calls a 'contest'. Unemployment remains high and global economies seem more fragile than before the pandemic. The conflicting objectives of managing the pandemic, government debt and the post-pandemic life of the rest of the decade.
Yet many of the most alarming problems for the post-pandemic world are already looking widely overblown. Economic growth has resumed rapidly, big household cash balances is proving stronger than expected. Despite vast money creation by central banks, inflation is not now a problem and is unlikely to become one. Economic globalisation is not dead. On the contrary, cross-border trade is rebounding and the shared experience of the pandemic has made the nations of the world more conscious of their interdependence. America and China are at odds but have not decoupled their economies and are unlikely to. Australia has so far been doing well due to the pandemic. The speed of recovery suggests the growth path of the world economy in a few years will be much the same as it might have been without the pandemic.
And while Australia's record-breaking run of economic success ended in the first half of 2020, it was not terminated by any fault in Australia's economic structure or its economic policies. Australia can regain the prosperity it enjoyed before the pandemic, and exceed it. But this demands recognition of new obstacles, and some old ones. It demands a clear focus on reducing unemployment, managing the increase in government debt, and navigating the competition between the United States through the increase in Australia's commercial and strategic interests. To find the right path, we need to know where we have come from, where we are, and where we are going.
John Edwards, a Lowy Institute Senior Fellow and an Adjunct Professor at Curtin University's John Curtin Institute of Public Policy, is a former member of Reserve Bank Board. He was a senior economic adviser to Prime Minister Paul Keating. His six nonfiction books include Keating: The Inside Story and John Curtin's War.
