Australia’s “Black Swan Moment”
Wayne Swan, Treasurer of Australia from 2007 to 2013, Deputy Prime Minister and the Deputy Leader of the Labor Party from 2010 to 2013, who thought he saved the Australian economy but just delayed the inevitable, is now blaming everyone but himself for the downward spiral:
Image source: Twitter
As I argued in my book Australia: Boom to Bust, Australia will eventually see a significant economic recession in the not too distant future. And all the data points are clearly indicating my worst fears on where the Australian economy is headed. But we have to ask who is responsible for this economic downturn, and which policy makers helped line Australia up for the collapse in capital expenditure.
Well, we can all try to blame Joe Hockey, Treasurer in the now defunct Abbott Government from September 2013 until September 2015, even though his approach was most definitely the icing on the cake, but unfortunately he was not Treasurer at the time Australia’s political elite truly made what could be two of the greatest (yet laughable)economic related mistakes in the history of Australian economics. And the blame lies with Wayne Swan, alongside the Reserve Bank of Australia (RBA), Treasury, and Australian Prudential Regulation Authority (APRA).
Mistake 1. Flawed Calculations
As per the chart above from the 2012 ‘Australia in the Asian Century White Paper,’ If there was ever such a stupid miscalculation by Australians, it was the forecast on how much iron ore Australia would need to extract from the ground to export to emerging nations such as China to fulfill their long term consumption requirements.
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