Australia

Ultimately, fiscal management is about choices: choices made according to principle and responding to circumstance. Swan made easy but poor choices, while English made difficult but sensible choices. As a result, New Zealand’s public finances are in good shape, and the Kiwi economy looks forward to continuing its healthy growth rates.

Sometimes Australia seems an odd country indeed. Kevin Rudd’s elevation to the Australian Labor Party (ALP) leadership last week after three years spent undermining his own leader, colleagues and political party, is the latest astonishing development.

Rudd’s second premiership may turn out to be short-lived because Australian Labor, divided and exhausted, lies in tatters. Only someone like Rudd could not care about that. After all, he never cared for anyone or anything other than himself. The kindergarten of Australian politics has finally turned into a farce. It is the Australian people who will have their say on it in the forthcoming elections.

If you really can’t help yourself and desperately yearn for a currency union between Australia and New Zealand against all odds, then at least you should also include Papua New Guinea. Simply because every failing monetary union deserves its Greece.

What Australia would need instead are the kinds of structural reforms that have been neglected for years. But unlike an interest rate cut, they cannot be delivered with the stroke of a pen.

Neuseeland und Australien, das ist eine Geschichte von zwei ungleichen Brüdern. Als ehemalige britische Kolonien in der geografischen Isolation des Südpazifik – so könnte man annehmen – müsste sie das gemeinsame Schicksal zusammengeschweisst haben. Tatsächlich jedoch sind beide Länder damit ganz unterschiedlich umgegangen. Während sich Neuseeland immer noch britisch gibt, haben sich die Australier eher an Amerika ausgerichtet. Und das sind nicht die einzigen Unterschiede.

Being an economist is tough. You can’t even enjoy a beer without considering the macro-economic consequences. I just discovered my local New World is now stocking Flensburger Pilsener.

Australia’s population is growing, whether you like it or not. But in dealing with it, nothing would be more irresponsible than pessimism. The challenge is not to stop population growth but to find practical solutions to accommodate it.