Australia and Spain – an uncomfortable comparison

Recently, I wrote a “Travelogue” blog about our recent visit to Spain and, along the way, there were a number of things regarding our own country that made an interesting (If not a comfortable) comparison.

I must state from the outset, that I am not an economist, and the following comments come from experience only and from observing what is obvious in Australia and apparent in Spain.

After we had been in Spain for about a week, it suddenly occurred to me that something wasn’t quite right. I turned to my friend Rob, who had made the trip with us from WA, and asked, “This country is supposed to be stuffed, right? Apart from the unfortunately ubiquitous European beggar, everything looks OK, doesn’t it? Business appears as normal; there is no great evidence of vacant shops; people are well-dressed and going about their business; the cost of living is low. So what’s going on?” He agreed that life in Spain looked pretty good.

We then reflected on life in Australia and how we, both as a nation and individually, are continually looking for more. Tug boat operators working 26 weeks a year earning $140,000 per annum are looking to strike for more money; young people in their 20’s having been paid well over $100,000 per annum for sometimes almost unskilled work, can suddenly live on nothing less; the social services sector continually demanding additional services or increased funding.

Just as Spain had overspent leading up to the GFC, so is Australia overspending. Australia – Australians – simply cannot afford our standard of living. It will, sooner or later, come crumbling down, unless we, as a nation, see the reality of our situation. The difference in Spain is that it had the European Community to bail it out. As my Austrian friend later vehemently expressed it when we visited him “They can afford their low cost of living, because the rest of Europe is paying for it!” And indeed, it had been just a four-hour plane flight from Portugal to Innsbruck (where my friend is a Professor of Communications at Innsbruck University) to see a dramatic increase in the cost of living. Australia will have no such community to come to its aid.

So, who would come to the rescue? The obvious answer is China and, if this occurred, imagine the outpouring of protest from those already concerned with its level of ownership in this country.

Spain had simply overspent. Evidence of this is obvious with wonderful infrastructure projects and community amenities evident in places like Barcelona – although some of these were apparently paid for as a result of the Olympic Games. While life may appear to be “normal” now in Spain, the country has crippling debt and high unemployment. With Australia’s economy perilously perched on the shoulders of the mining industry and its exports to Asia, it will not take many elements to turn (or remain) unfavourable, for our situation to take a turn for the worse.

Successive governments and the mining industry have to take some responsibility for what has occurred – and continues – in terms of lack of planning and providing for the obvious. Blind Freddie could have seen that we were short of skilled labour. The type of shortage that has sent wages skyrocketing and continuing unrealistic expectations; that has reverberated through industries that cannot afford to compete on pay; that has caused the collapse of some services to rural communities; that has young people saddled with debt they may not be in a long-term position to repay; that has resulted in a high cost of family breakdowns from huge “fly-in, fly-out” workforces. However, the planning to address this was poor, to say the least. In some cases, it appears that it was non-existent.

Leadership in government is being aware of the truth of the current situation, making prudent plans for the future and inspiring the population to believe in those plans and to follow the lead. This leadership is not obvious.

Leadership in business is not dissimilar. However, business leaders need also to recognise that they have a responsibility over and above that to their shareholders; they have one also to the country that provides the business environment in which they operate. In taking from that environment, they have a responsibility to contribute back to it – for the longer term.

Without this kind of leadership, from what we have observed, Australia is heading towards the type of recession my least-favoured politician, Paul Keating, termed “the recession we had to have” – except it probably needs to have a greater impact to restore our sense of reality.

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What John Matthew believes about small business

That the owner has risked many things that others take for granted;

That there is no guaranteed income or reward for the considerable effort that is required;

That often, the family home is on the line to support the business and its constituents;

That there is a dignity and self-respect that is earned;

That entire communities would be better places if there was an increased appreciation and respect for small business.

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