Conventional wisdom says that Australia needs to undergo a painful adjustment and transition after the mining investment boom.
A casual read of the RBA minutes from this month’s board meeting would suggest that the RBA itself is worried about this transition.
Not so according to John Edwards, RBA board member, former adviser to Paul Keating and former long term chief economist at HSBC Australia, who writes in a new book Beyond the Boom that the mining boom has been overstated.
Edwards says the contribution of the mining boom was smaller than many have calculated and, as a consequence, the challenge faced by the Australian economy is far less onerous than many believe.
The AFR reports Edwards argues the notion of “national renewal” harking back to the Hawke/Keating reforms of the 1980s is unnecessary and that, “Within reach of a quarter-century of unbroken economic success, and with trends in the global economy suiting Australia, it is surely not remarkable that revolutionary changes are not now required.”
Importantly and most optimistically, Edwards writes:
Australia has not been living in a fool’s paradise during the mining boom, it has not been complacent, it has not wasted its endowment, and it has not evaded recognition of some fundamental shortcoming.
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