Author: Ian Buchanan, Crawford School, ANU

Australia has emerged as the world’s strongest performing advanced economy in the aftermath of the global financial crisis. While the US unemployment rate is the highest it has been since 1983, at 10.2 per cent, the latest forecasts from the Australian Treasury have lowered the peak unemployment target from 8.5 per cent to 6.75 per cent, and unemployment unexpectedly fell last month to 5.7 per cent. In the May budget growth forecasts were raised from 0.5 per cent to 1.5 per cent for 2009/2010 and to 2.75 per cent for 2010/2011.  Australia’s strong economic performance has translated into a stronger Australian dollar — up 32 per cent against the US dollar over the year to December.

Prime Minister Kevin Rudd and his government deserve credit for their decisive actions in dealing with the onset of the crisis.

In October 2008, the Rudd government guaranteed bank deposits and wholesale funding for Australian banks. Then in February 2009 the Rudd government launched a A$42 billion ‘Economic Stimulus Package’. But the Rudd government also benefited from some luck Read more…