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Morrison's choice: be exceptional or a time-server

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07.06.2019

Scott Morrison has been immersed in the D-Day celebrations this week. Ordinary men and women were remembered for rising to the challenge of their time and committing heroic deeds. Perhaps he could take a quiet moment to reflect on the possibilities of his own prime ministership. Newly elected, this is his moment of maximum opportunity to shape an agenda.

Bob Hawke has been much lauded recently as a great prime minister, and, by some reckonings, the greatest. He will be praised once again next week at his state memorial service at the Sydney Opera House. He was, after all, a "national icon and political giant", in Morrison's words.

A Prime Minister with role models. Illustration: John ShakespeareCredit:

Why is Hawke so well regarded? He had nice silver hair, a common touch and a way with a yard of beer, but his great accomplishment was that he rose to the overarching challenge of his time. Together with his treasurer, Paul Keating, he thoroughly rejuvenated an exhausted economic structure. This set the country up for the 28 years of unbroken

expansion that we are enjoying to this day.

This has been the root source of every job, every opportunity and every new government benefit since. It's also been one of the sources of Australia's modern exceptionalism.

The chairman of the America's central bank, Jay Powell of the US Federal Reserve, acknowledges Australia's unique accomplishment. He said in November: "Business cycles don't last forever, I guess, unless you're Australia."

But the laws of economics haven't been repealed. Even in Australia. After nearly 30 years, the Hawke-Keating creation needs work. The Reserve Bank's decision to cut the cost of money this week was a klaxon call, like a submarine's siren before it sinks beneath the waves.

The economy is in trouble and about to sink. The cost of official money in Australia is now 1.25 per cent. Core inflation is 1.4 per cent. Meaning? The central bank has made money not only free,
after adjusting for inflation, but cheaper than free. It is now pumping subsidised money into any bank that wants to borrow it.

Australia fared better than any other developed economy in the global financial crisis and the great recession that followed. Only two – Australia and Canada – escaped recession. But after a decade we see that Australia........

© The Age