Ten years ago yesterday, the Australian sharemarket hit an all time peak: the ASX 200 reached 6851 points. At the time, the financial story was the collapse of the country’s second biggest shopping centre company, Centro. Many of us, of course, were preoccupied with the looming wipeout of the Howard government, and John Howard himself.
It was a different economy back then, and not just because the mining boom was filling Peter Costello's coffers with revenue. Manufacturing still employed a million people; retail was the biggest employer, not health and social care. Productivity growth, strangled by John Howard's Workchoices, was nearly non-existent. Wages grew around 4% a year; inflation had briefly dipped to 2% but it was bouncing between 4% levels that prompted the Reserve Bank to raise interest rates -- most famously during the 2007 election campaign. It was a high-growth economy in which Australians chose to spend their perceived wealth -- often from reducing their savings -- on goods; the "experience economy" that is now hurting retail across the world and even in countries like India was still in the future.