He may not get the guernsey of Australia’s most engaging politician, but Wayne Swan’s fiscal policies have received recognition from a long-time leading global magazine in finance and banking. Euromoney named Swan as its 2011 Financial Minister of the Year, due to “careful stewardship of Australia’s finances … during and since the global financial crisis”.
Swan follows Paul Keating as only the second Australian to win the award, which he will receive on Sunday at a reception in Washington. But is Swan really the world’s greatest financial minister? We put it to some of Australia’s key economists to explain whether or not he was rightfully named as No.1.
James Craig, chief economist at CommSec, says Swan is “right to accept [the award] on behalf of all Australians, he is the captain of the team”. He credits Swan’s following of federal Treasury advice as the key reason for winning the award, and says that in terms of the Australian economy it shows that “we are following the right strategy, and we had luck on our side”.
Michael Knox, director of strategy and chief economist at ABN AMRO Morgans, does not agree: “I see that Wayne Swan has now achieved the same standard as Paul Keating. This now significantly reduces my opinion of Paul Keating.
“I think the government responsible for Australia’s recovery from the recession is the best government in the world, the government of China. Whatever the theory of the stimulus package, the problem was that the implementation was poor as we can see by the cost over runs by the school building program.”
John Quiggin, Australian Research Council Federation Fellow at University of Queensland’s School of Economics, has a more optimistic assessment of Swan’s achievements. He told Crikey: “I think the Australian response to the crisis was well-judged and highly successful. It’s depressing, though understandable, that the Australian public doesn’t realise what a good job was done and what a bullet we dodged.
“I think it also reflects well on the Australian economics profession. The stimulus policy had overwhelming support from the profession and the outcomes justified this.
“My only question regarding credit is that this was a success for the entire policy family — Treasury, RBA, Swan and his office, and Rudd. I don’t think there’s any good way of dividing it up, so Swan should be regarded as getting the prize for a group effort.”
Saul Eslake, program director of productivity growth at the Grattan Institute, agrees that the strength of the Australian economy was a collective result. Others deserve the credit.
“A good deal of credit should be given to the Reserve Bank, the Chinese authorities, APRA, the managers of Australian banks, the floating exchange rate and to previous governments of both political persuasions, whose achievements and reforms put Australian in a much stronger position to withstand the forces which have much made such a mess of other economies,” he said.
“This said the decisions that Swan has made as treasurer, before during and after the global financial crisis was officially over certainly contributed to Australia’s good records. If Australia’s performance had been as bad as other economies, Swan would have certainly copped the blame for it. So the fact that we avoided dashing ourselves on the rocks, he’s entitled to claim some of the credit.”
While Eslake thinks Swan certainly deserved to win the award, he is sceptical of the level of competition: “Good finance ministers and treasurers have been pretty thin on the ground in recent years in the Western world, particularly in comparison to Peter Costello, who is no doubt peeved he did not receive the award.”
No prizes for guessing which newspaper Michael Knox reads.
Gee, Crikey,this article’s opening salvo has me wondering: Who would gain the guernsey for Australia’s most engaging politicion?
Michael Knox: “the government responsible for Australia’s recovery from the recession is the best government in the world, the government of China.” Just don’t stop taking the tablets so suddenly next time, Michael.
Eslake’s right. You have to wonder about the competition for this award, given that Europe and the US – and several other developed places are in the financial cr*pper.
Doesn’t Michael Knox enjoying sounding like a tool! Cost overruns! Name them! A 3% complaints rate! Knox – go back into the nutty Abbott-esque alternative universe you came from and don’t come back.
This is hilarious. Wayne “Goose” Swan the world’s best treasurer?
Those who really deserve credit for the non-basket case status of the Australian economy:
(1) The employees in the Department of Treasury – for doing a relatively good job despite their incompetent leader.
(2) Wayne Swan’s predecessors – Paul Keating and Peter Costello. The former for making courageous reforms, the latter for being fiscally disciplined. When Goose came to the job, he was handed the best fiscal position of any country in the OECD.
(3) China
And before we get too self-congratulatory about being the world’s best economy, let’s see how the current storm clouds play out (the bursting of the household/private debt bubble and the punishingly high Australian dollar.) With Goose in charge, I’m sure we have nothing to fear.