It’s 45 years since Donald Horne christened Australia “The Lucky Country,” and even writing in the middle of the balmy ’60s he was being ironic.

But it seems Australians still believe they’re especially favoured by fortune; either that or they are blind optimists.

Last week two separate measures of consumer sentiment saw confidence jump like a goosed kangaroo. The Melbourne Institute-Westpac index had its biggest rise in the 22 years of its existence — 13 percent — to level out at a figure of 100. In other words 50 percent of consumers believe things are going to get better in the immediate future. The National Australia Bank index went up 12 percent to get back to the level of last February, before the Global Financial Crisis had really penetrated public consciousness. And this at a time when the world economy is generally seen to be going to hell in a hand basket.

Admittedly the punters can bring some evidence to bear to back up their remarkable cheerfulness. Political spin aside, Australia really does seem to be holding up remarkably well compared to the rest of the industrialised world. The figures show that, almost uniquely, we are not actually in recession; — well, we weren’t when the figures were collected, at least not technically speaking; we had slowed down to a snail’s pace but we were not actually going backwards. To rejoice in such circumstances is a bit like the man who cried because he had no shoes until he met a man with no feet, but then, all things are relative.

There are, of course, reasons to suppose that by now the economy has almost certainly gone into reverse: the main positive in the March quarter was the unexpectedly high balance of trade, and since then commodity prices for our exports have fallen and the Australian dollar has appreciated, making our exports less profitable on two fronts. On top of this the fall in imports was not entirely good news because some of the imports we did not have included plant and equipment that could be used to increase productivity and generate jobs. However, viewed through rose coloured glasses it was a pretty beautiful set of numbers, made prettier still by the fact that consumer spending was holding up.

Kevin Rudd and his colleagues immediately pointed to their stimulus measures as the cause, and fair enough; there is no doubt they have had considerable effect and it may not be over yet. Those who prudently used their first stimulus package to pay off debt may be more inclined to splurge out on the second one, and if the consumer confidence figures mean anything, that sector of the economy at least is doing amazingly well.

But not as amazingly as employment. Here, the figures are absolutely mind-blowing. If they are right, the rise last month was miniscule, and even that had a lot to do with the fact that quite a lot of those who had previously given the game away are now back in the workforce and actively looking for jobs. Moreover a closer look at the numbers reveals something even stranger: while full time jobs shrunk, part time jobs showed a marked increase. This shift may be deplored by hardline economists, but it may also show something entirely praiseworthy about Australians: there appears to have been an informal arrangement between many employers and their workers to share the pain.

In other words, as the available work has diminished, rather than some employees being sacked altogether, quite a lot have agreed to take cuts to their hours, and therefore to their wages. This is a wonderful example of real mateship in action; the kind of mateship John Howard, who tried to copyright the concept, could only dream of.

It probably can’t be extended to cover a more serious downturn, and as Rudd keeps saying, we aren’t out of the woods yet. In fact, we are barely entering them; like Hansel and Gretel we are just pushing our way through the outlying scrub and relying on a trail of breadcrumbs to get us home again. But the progress so far has been astonishingly good, and the surveys make it clear that a great many of us still regard the glass as half full.

One reason for this sanguine outlook may be that so far at least Australia has appeared an island of stability in a storm-wracked world. There have been few real collapses, no flood of repossessions, and not many families have had friends or relatives dumped in the dole queue but perhaps above all, the banks have stood rock solid, declaring in stentorian tones that for them it will be business as usual. They will continue to be arrogant, grasping, and above all profitable bastards.

Thus it was almost reassuring to hear the Commonwealth say it was ignoring Reserve Bank policy, Government pleas and common decency and putting up its rates; some things never change. Back in the days when Horne wrote The Lucky Country, university students had a song:

There’ll always be a Menzies
While there’s a BHP
For they have drawn their dividends
Since 1893.

There’ll always be a Menzies
For Menzies never fails
As long as nothing happens to
The Bank of New South Wales.

If we should lose out Menzies
Wherever would we be
If Menzies means as much to you
As Menzies means to me.

Of course BHP is now Billiton and the Wales is now Westpac, but apart from that you could just about substitute Kevin for Menzies and use it today. For Rudd is our shepherd, even if we’re not quite sure where he’s leading us, and the banks we trust — to be bastards.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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