as sent ---not edited by unswp










The misty expanse of futurity is radiated with divergent lines of rigid steel; and along one of these lines, with diminishing carbon and sighing exhaust, you travel at schedule speed.  At each junction you switch right or left, and on you go still, up or down the way of your own choosing.  But there is no stopping or turning back; and until you have passed the current section there is no divergence, except by voluntary catastrophe.

Another junction flashes into sight, and again your choice is made; negligently enough, perhaps, but still with a view to what you consider the greatest good, present or prospective. One line may lead through the Slough of Despond, and the other across the Delectable Mountains, but you don't know whether the section will prove smooth or rough, or whether it ends in a junction or a terminus, till the cloven mists of the Future melt into a manifest present.  We know what we are, but we know not what we shall be (Tom Collins (Joseph Furphy), Such is Life, 1903).


We live in a world captured, uprooted and transformed by the titanic economic and techno-scientific process of the development of capitalism, which has dominated the past two or three centuries.  We know, or it is at least reasonable to suppose, that it cannot go on ad infinitum.  The future cannot be a continuation of the past, and there are signs, both externally, and, as it were, internally, that we have reached a point of historic crisis.  The forces generated by the techno-scientific economy are now great enough to destroy the environment, that is to say, the material foundation of human life...

We do not know where we are going.  we only know that history has brought us to this point...However, one thing is plain.  If humanity is to have a recognisable future, it cannot be by prolonging the past or the present.  If we try to build the third millennium on that basis, we shall fail.  And the price of failure, that is to say, the alternative to a changed society, is darkness (Eric Hobsbawm, The Age of Extremes 1994).


Where there is no vision, the people perish (Proverbs 29:18).




CONTENTS                                                                                                                                  3

PREFACE                                                                                                                                     4

INTRODUCTION                                                                                                                        6

Scoping the future                                                                                                    7

Outline of book                                                                                                         8

CH 1. TIMESHIP AUSTRALIA                                                                                                 10

Chapter preview                                                                                                         10

Where we are coming from                                                                                  10

Where we are now                                                                                                     19

What we take into the future                                                                             23

Waving goodbye                                                                                                         28

CH 2. GLOBAL AND AUSTRALIAN FUTURES                                                                     29

Chapter preview                                                                                                         29

Global futures                                                                                                           29

Australian futures                                                                                                  30

Broad-brush futures                                                                                               31

Cameo futures                                                                                                             34

Making it to 3000 AD                                                                                                  54

Where do we think we are heading?                                                                 56


Chapter preview                                                                                                         57

National goals                                                                                                           57

Where do we start looking?                                                                                59

Finding three contrasting strategies                                                           61

Policy priorities in relation to umbrella issues                                     64

Strategy implementation                                                                                     66

Are these Australia's real choices?                                                                 66

2050 and all that                                                                                                        67

INTRODUCTION TO CHAPTERS 4, 5 AND 6                                                                        69

Strategies as manifestos: The common format                                        69

CH 4. A CONSERVATIVE DEVELOPMENT SCENARIO                                                    71

Introducing the Conservative Development Party                                71

Our reform program                                                                                               72

Coda: Conditional growth                                                                                   94

CH 5. AN ECONOMIC GROWTH SCENARIO                                                                      96

Introducing the Economic Growth Party                                                   96

Our reform program                                                                                               97

Coda: Free to grow                                                                                                   107

CH 6. A POST-MATERIALISM SCENARIO                                                                           108

Introducing the Post-Materialism Party                                                     108

Our reform program                                                                                               110

Coda: Warm and green                                                                                            133

CH 7. COMPARING SCENARIO OUTCOMES                                                                      134

Similarities and differences                                                                                134

A method of simulating strategy outcomes                                              135

The future under a conservative development strategy                   138

The future under an economic growth strategy                                    143

The future under a post-materialism strategy                                        150

Recapitulation                                                                                                            156

CH 8. SO, WHERE MIGHT WE BE IN 2050?                                                                          157

Value of scenario building                                                                                  157

What has been learnt?                                                                                            159

Epilogue                                                                                                                          162

REFERENCES                                                                                                                             164

APPENDIX 1: A FAMILY OF GLOBAL SCENARIOS                                                           178


INDEX                                                                                                                                           190




At birth I was thrice blessed.  I was born Australian.  I was born at the end of the great depression of the thirties and have lived much of my life through prosperous and (domestically) peaceful times.  I was born to loving parents who were always able to feed and clothe me, and who fostered my education.  This triple endowment has been the foundation on which I have been able to build a long, healthy, self-fulfilling life.  Now, as some remuneration,  I am here writing a book which I hope will contribute, in a small way, towards helping future generations of Australians live long, healthy self-fulfilling lives.  Australian society is my focus of interest and the well-being of its people is my concern.

Perhaps I am a ‘do-gooder’, but, if so, I am far from alone in my concern for future generations of Australians.  Some people’s concerns are sweepingly altruistic and some are more personal.  Many older people are openly anxious for their grandchildren’s wellbeing and hence for the society in which those grandchildren will live.  Parents want to be able to tell their children what sort of world they will live in and to make plans for their wellbeing in that world.[1]  And many younger people have well-developed hopes and fears about the society in which they will grow old.  Should they, rationally, be more fearful or less, more hopeful or less? 

Not that thinking about Australia's medium-term future one or two generations out, around 2050 say, takes a lot of people’s time.  Most are preoccupied with surviving or prospering in the here-and-now.  Nonetheless, I am convinced that many people would spend more time thinking and talking about Australia's medium-term future if a vigorous and thoughtful effort were made to get this topic onto the national agenda of important issues.  While understandable for individuals, it is less excusable for society to signally fail to think explicitly about what we can start doing today that might improve quality of life for the people of 2050 and beyond.

Part of my puzzlement about Australian society's apparent indifference to its medium-term future stems from a perception that the future is a topic with a very natural appeal.  Indeed, while writing this book, I have become obsessed and excited by the future.  I have always found contrasting scenarios intriguing but, once you start asking, continuously, what the future beyond Christmas might be like, the world assumes a whole new aspect.  Everything you read, hear and see contains hints about ‘the shape of things to come’  (HG Wells’ phrase) and you find yourself submerged in a maelstrom of ideas where the challenge is to find pattern and order.  Doing the reading, thinking etc for this book has been a great pleasure.  I was sorry when it became necessary to stop reading and start writing.  There are so many references I should have read and so many I should have read more carefully or for a second time.  Simultaneously, I have become more and more humble as the book has progressed.  The enormity and arrogance of what I am attempting comes home to me every time I realise that some modest idea that has suggested itself to me has, somewhere, some time, been the subject of comprehensive study.

Australian Futures has its origins in the Ecumene project, a research project in the CSIRO (Commonwealth Scientific and Industrial Research Organisation) Division of Wildlife and Ecology, started by myself in 1990 and currently led by my colleague Barney Foran.  The project is concerned with the following question:

In that part of Australia where the intensity and spatial pattern of natural resource use is changing rapidly (called the Ecumene), how might society best go about balancing conflicting demands for the satisfaction of both resource conservation and resource utilisation values?

The Ecumene project stems from the awareness of the Division’s scientists that many aspects of environmental quality (eg air quality, water quality, earth materials quality, biodiversity) are degrading under the impact of a complex process which includes, as major drivers, population growth, technological change and changing consumption-production mixes.  As a general rule, whenever there is a change from a less-intensive to a more-intensive land use, or resource use, conservation values (eg natural capital) tend to be lost and utilisation values (eg production and consumption) tend to be met.

Given that environmental quality is an important part of overall quality of life, and that quality of life is an important social goal, the question arises as to whether this complex process can be collectively managed.   If so, how well?    It would be of major benefit to Australian society if environmental quality could be better managed, remembering all the time that efficiency and equity are other important goals which need constant balancing against environmental goals.

Feedback modelling and scenario building are the two methods being used in the Ecumene project to create descriptive images of possible futures for Australian society.  While this book is a product of the scenario-building part of the project, it takes a somewhat wider view than the mid-future of environmental quality.  To consider environmental quality in sufficient perspective,  I have found it necessary to think about quality of life in Australia more generally and about this society’s prospects for surviving in acceptable form for many centuries. 

Our feedback modelling work has already yielded a number of insights into how difficult it is to move an ‘historically bound’ economy rapidly from one paradigm (eg fossil-fuel based) to another (eg renewable-energy based).   The message is that one has to start ‘turning the ship around’ as early as possible and then stay committed to change.  The complementarity between the scenario building work and the feedback modelling work is that scenarios provide alternative assumptions about society’s rules for trying to redirect the timeship from one destination to another.  The value of the feedback-modelling work to the scenario building work is that it will, in time, generate plausible numerical (cf verbal) descriptions of possible consequences of adopting and operationalising alternative socio-political philosophies.

While this book has its origins in a CSIRO project it needs to be stated quite clearly that it does not represent anything in the nature of an official CSIRO position on the matters it addresses.  Certainly, as the nation’s leading scientific research organisation CSIRO has a responsibility to support thinking about big difficult questions on the edge of conventional science, without of course being committed to the results of such thinking.  In an era when it is increasingly difficult to find institutions willing to support panoramic thinking and only a modicum of such thinking is carried out by corporations, military establishments and government departments, CSIRO merits public commendation for allowing, even encouraging, one of its officers to speculate freely, in a manner which owes little to Bacon and Popper, those classic philosophers of science, about Australia's future.  I am confident that the support I have received would have still been forthcoming even if it had been realised by all at the beginning of this exercise that the major variable to be controlled when carrying out mental experiments on the future is ideology.


I would like to thank:

Jenny Clark and the librarians of the CSIRO Division of Wildlife and Ecology (thanks Inge) for their bibliographic feats.

Mike Austin, Franzi Poldy, Neil Hamilton, Meredith Edwards, John Burton, Richard Eckersley, Mikhail Entel and Barney Foran for stimulating discussion and comments on draft chapters.

Richard Eckersley, John Ive, Barney Foran, Meredith Edwards and Will Steffen for some particularly helpful references.


Doug Cocks

Canberra 1998



The world keeps looking for convincing alternatives to, not only the laissez-faire and the communist models of social organisation, but also the pragmatic mix of policies and programs that seemed to work in mixed economies in the 1947-73 ‘golden age’ but which began failing soon after.  This is despite the fact that the battle to have societies organised around the ideas of self-regulated market capitalism and small government has been temporarily won by the proponents of those ideas. The first world is likely to be made up of societies that are variants of the ‘capitalist democracy’ model for a good half century to come.   One of these will be Australia.  Within that boundary condition, what are the practicable choices we have for managing our society?  If we want a society with good long-term survival prospects and  offering high quality of life to all (goals that I lump together as quality survival), as this book assumes we do, can we articulate and evaluate defensible and distinctly different alternative ways of attempting to create such a society?  Even if it takes 50 years to get there?

Australian Futures is based on the unadventurous assertion that it is not too difficult to abstract, from our culture’s pool of ideas about societal organisation, several coherent, integrated, ideotypical ('type') strategies for managing Australian society.  While there is evidence and argument available to support the adoption of any of these strategies, evidence is not proof and, in the end, these strategies have to be regarded as belief systems which, if implemented, may or may not produce the Australia we want.

What I have done is to formulate three strategies that address a common set of economic, social and environmental concerns in different ways and with different emphases.  Inevitably, it is easy enough to identify similarities between these strategies and contemporary political positions.  But I have bent over backwards to play down such links and compensate for my own biases and I present the three strategies in as fair a way as I can.  I would like readers too to resist going partisan as soon as they think they know which strategy best reflects their political allegiances.

The three strategies are presented as manifestos for three hypothetical political parties seeking to govern Australia over coming decades---the Conservative Development Party, the Economic Growth Party and the Post-Materialism Party.   These manifestos then become the foundations on which I  build three scenarios that speculate on what the longer-term quality-of-life consequences might be if Australian society made a conscious choice to be guided for some decades by each of these socio-political philosophies.  Starting with a well-defined socio-political philosophy permits one to plausibly infer something about society’s subsequent choices of policies, priorities, plans and programs for seeking its goals and something about society’s reactions to various contingencies, including global-change possibilities. 

A scenario is nothing more than a preview of possible future events or conditions.  The proposition behind my 'narrative experiment' is not that scenarios can predict the achievement or otherwise of particular social goals by some mid-future date---they cannot.  Rather, it is that by carefully detailing a small but diverse selection of the many paths Australian society could choose to follow and by speculating in an informed and disinterested way about the differential consequences of following one or other of these paths over time, it might be possible to make a better choice about which, or which mix of, or which variation on these paths to start on now.  Selecting a path to start down now does not commit the society to remaining on that path for 50 years of course.  Tomorrow (figuratively speaking), when circumstances change, the experiment can be repeated and another path perhaps chosen.

I particularly want my scenarios to alert people to the need to avoid short-termism when choosing paths.  Just as many aspects of our lives today are being determined by collective and private decisions made 50-100 years ago (eg federation, the white Australia policy, closer settlement), many of the things that will be important about life in the mid-21st century are being determined by decisions being made today. Despite this, these consequences are rarely taken into account more than minimally in choosing what to do today.

For example:

·    The way we are educating our children today will determine their capacity to find work in a globalising economy and fulfilment in their adult lives.  It will set the values which they, in turn, bring to bear on moulding their Australia's future.  Education policies initiated today can take decades to have a significant effect.

·    Big infrastructure projects (eg a Very Fast Train link between Brisbane and Adelaide) undertaken today will still be functioning in fifty years and will mould many decisions (eg settlement patterns)  in the intervening period.

·    A strategic decision now to embark on a medium-term large-scale immigration program would double the size of Australia's population and leave us with several mega-cities in 2050.

·    Because natural capital can only be lost, not created, strategic measures taken today to protect natural capital from cumulative exploitation will determine our grandchildren’s natural inheritance.

·     Major procurement decisions being made by the Australian Defence Force today will determine our defence capabilities for some decades.  Speaking of the Navy’s recent plans to upgrade the Australian fleet, a senior officer said ‘This set of decisions will fix the maritime force until half-way through the next century’ (The Australian Aug 30 1996).

·    Joining regional and world trade and other groupings (such as World Trade Organisation, Asia Pacific Economic Co-operation forum) will lock Australia into the decisions of such bodies for some decades.

·    A comprehensive deregulation of the local economy could only be reversed with great difficulty, over decades, if at all.

·    In some sectors of the economy (eg oil, banking, infrastructure (notably power), forestry, mining, agriculture, insurance, space industries) profitability in 40-50 years depends on investment decisions made today.

·    ‘Infant’ industries (eg a space industry) can take decades to establish.

·    Community attitudes can take many years to turn around.

·    Institutions in place today determine whether people are able to smooth their income over their complete life cycle.

Decisions about all these matters need to be taken with maximal awareness of the world in which they will eventually have to be judged as good decisions or bad decisions.  History is full of decisions that, with hindsight, were wrong; but knowing which horses are running improves the punter’s chances of picking a winner.

Further, there are many recurrent, as distinct from 'one-off', decisions that, while individually having little effect on quality survival now or in 2050 (eg land clearing; annual immigration levels; groundwater loadings), cumulatively stand to have enormous impact on indicators of quality survival by that time. As Herman Kahn says, beware the tyranny of small decisions.[2]  Also, despite the fact that a number of outside threats to national sovereignty, to the basic structure of society and to individual well-being can be dimly foreseen occurring in the 21st century, we do little to pre-empt them or deflect them.  The same applies to opportunities, eg how do we plan to capitalise on the ubiquity of access to the Internet?  Short-termism (or grasshopperism) is a useful name for the blind spot expressed in our society's inability to factor these sorts of longer-term implications into its current decision-making.

Scoping the future

To the extent that the future can be seen, correctly, as evolving in a well-behaved manner out of tendencies already present in society, scenarios are exercises in logical analysis of impersonal processes.  But also, inescapably, they are personal visions, coloured by the scenariographer’s own values, experiences and moral and political orientations.  For example, it is easier to be pessimistic than optimistic about the consequences of following a course one personally finds distasteful.  Awareness that this is so brings with it a responsibility for the scenariographer to identify, announce and compensate for hir (shorthand for his or her) self-perceived biases.   

Taken together, the scenarios generated in an ideal scoping exercise should also be representative of all possible futures.  One way of interpreting this criterion is to say that one believes there is no plausible future that could be generated that would be radically different from one (or a mix) of the scenarios actually generated.  So, scoping the future means attempting to build a representative set of scenarios.  Of course, lack of time and resources will always stop the ideal representative set of scenarios from being built.  

But, suppose that this book does come to be seen as providing a more-or-less representative sample of plausible scenarios of Australia's medium-term future.  What is the value of that to the community?  At one level,  it will help people articulate the afore-mentioned fears and hopes that they have for their grandchildren.  But, beyond that, the possibility is that if different scenarios, based on different plausible assumptions about the ‘big’ choices between different national strategies, can convincingly evoke the different possible consequences of each of these choices, it will assist the community choose a national strategy ‘promising’ more-preferred rather than less-preferred consequences for tomorrow’s Australians.  One way in which I see myself contributing to that debate is by empathetically bringing different world views into a common discourse.  So many people read only what they know is supportive of their own mindset.  I want them to engage with other people’s arguments instead of just dismissing them.

Our politicians are evidentially unwilling to recognise the substantive choices we face and state their position amongst these.  Fearful of electoral oblivion, they offer an instant rosy future for the price of some minor adjustments to the system.  Perhaps this book will make it easier to challenge that timidity, or even give them courage.  Here, I look to the success of Clem Sunter’s (1987) extraordinarily influential little book, The World and South Africa in the 1990s.[3]  While openly normative, it spelled out the different possible consequences for South Africa of going down a post-Apartheid open-economy road or down a conservative no-change road.

Another important reason for writing Australian Futures is to raise community confidence in Australia's future and our ability to control that future.  I am a meliorist.  Meliorism is the optimistic doctrine that the world can be made better by human effort.  I want the world to be a better place and I believe in the ability of individuals and societies to both envisage a better world and to change the world. This does not, however, make me an ‘essence optimist’ in the sense of being convinced that tomorrow’s world will be a good place to arrive at.[4]  Tomorrow’s world may be a bugger of a place which we can do little to avoid (I don’t know) but, if we try to make it better, it is unlikely to be worse than if we had not tried.  It may be, for fortuitous reasons beyond our control, on one hand, or, on the other, because we tried, a good place in which to live.  That is, we are both future makers---makers of our own future---and future takers---faced with the necessity of adapting to, reacting to, powerful social (eg mass migrations), political (eg tribalism), economic (eg globalisation) and environmental (eg climatic change) forces.  If, at the end of the present inquiry, we cannot avoid concluding that the future is being determined by powerful irresistible forces we do not like---all take and no make---then such knowledge might at least lessen the pain of living with the resulting changes.

A final hope for this book is that it will help people learn how to think about the future for themselves.  Scoping the future is, unavoidably, a highly subjective undertaking and I want this book to leave people ‘owning’ a clear recipe for thinking about the future using their knowledge and perceptions rather than mine.  

Outline of book

Chapter 1, Timeship Australia

Our past scopes the futures we have any prospect of reaching.  This chapter traces our evolution as a reasonably civilised and successful nation and concludes that we enter the future without any crippling burdens and reasonably well equipped with social and institutional capital, human and intellectual capital and built and natural capital.  Being well-equipped is not enough to ensure success in a turbulent world of course.

Chapter 2, Global and Australian futures

The chapter begins with a summary of alternative ways in which major aspects of the world's socio-economy and environment could evolve, a summary which is elaborated in Appendix 1.  Most of the chapter is a review of aspects of Australia's future that diverse observers, most of them Australians, have foreseen with greater or lesser confidence.  Some previews, including several sets of scenarios, are overviews of the society as a whole, concentrating on what the observers see as the ‘big’ issues.  More are ‘cameos’ where experts and people with special interests have used their familiarity with some narrower sector of society to speculate on what might evolve within that sector.  These cameos are organised into ten ‘areas of root change’, each with a particular implication for ‘quality survival’, ie quality of life over the long-term.  Knowing what has been foreseen helps the present project in two ways.  It suggests things that society might (or might not) want to make happen and it suggests some possible consequences of trying to make particular futures happen. The chapter's overall insight is that Australian society's future will be shock-driven, strategy-driven or issues-driven.

Chapter 3, Chasing the rainbow: Scoping Australia's strategic options

Here we begin the task of building three scenarios around three strategies for managing Australia into the future.   The three strategies are developed around (a) three contrasting attitudes towards the appropriate balance between individualistic, hierarchic and mutualistic  modes of social organisation, and (b) three contrasting core views of the importance for future quality of life of ameliorating various hazards (rate of economic growth, inequity, environmental quality, sociopathy) associated with the contemporary socio-economy.   The chapter takes us as far as a set of attitudes towards a set of ‘umbrella’ issues for each strategy.

Chapters 4, 5 and 6

These core chapters present three national strategies in the form of three reasoned political manifestos for three hypothetical parties: the Conservative Development Party, the Economic Growth Party and the Post-Materialism Party.  For ease of comparison, all are presented as policy and program responses to a common set of issues organised under ten policy domains: social health, the economy, work and business, community services, environmental quality, governance, communications and the media, population, technology and international relations.

Chapter 7, Comparing scenario outcomes

This chapter, looking in turn through the eyes of supporters of these three national future-shaping strategies, speculates on the possible mid-term consequences for quality of life, good and bad, of determinedly pursuing each of these strategies over coming decades.

Chapter 8, So, where might we be in 2050?

The book makes no attempt to choose one strategy as ‘preferred’.  While the reader is free to do this, my conclusions concern the need for and rewards from seriously and disinterestedly identifying and debating society’s ‘big’ options, even while recognising that, in practice, society will always (and usually should) follow a ‘mixed’ strategy.


Chapter preview

The metaphor of ‘Spaceship Earth’ has been successful in drawing attention to the fact that this planet is like an occupied spaceship hurtling through the universe, with the crew entirely dependent on the provisions they carry and their own capacity to deal with emergencies.  On a smaller canvas, the metaphor of ‘Lifeboat Australia’ similarly draws attention to the fact that this continent is like a ship’s lifeboat, adrift in the southern oceans of the planet, crewed by a population which has to decide whether to invite any castaways they encounter to clamber aboard and share any fish they catch.[5]

An alternative metaphor is that of Timeship Australia which sees Australian society as a timeship being navigated through the flux of history from federation in 1901 towards (in the present exercise) a stopover at 2050 or beyond, all the while making sure that the crew (population)  are well-trained and supported (quality of life) and that the ship arrives at 2050 in good condition (capacity building) to continue its destined voyage through the hazards and opportunities ahead.  When we reach the 2050 way-station we can take stock and see how well equipped we are to continue the voyage and what sort of condition the crew are in---their prospects for quality survival in other words.

While making no pretence of being a history, this chapter, very briefly, reviews, in social, political and economic terms, the paths Australia has travelled since federation and where these have brought us.  Its purpose is to recognise determining forces, values, institutions etc which have moulded Australia in the past in order to ask whether these still exist and, if so, whether they might continue to mould Australian society into the mid-future or whether they have run their course.[6]

Where we are coming from

According to Paul Kelly  the ‘Australian settlement', something like an Australian social contract[7] or national bargain,[8] drove the development of Australian society, with bipartisan support, for 70 years post-federation.  It had five widely agreed principles for guiding society: white Australia, industry protection, wage arbitration, state paternalism (intervention for the common good) and imperial benevolence (the belief that Australian prosperity and security was underwritten by the Empire). 

In the 1990s two of these principles, white Australia and imperial benevolence, have been replaced by new verities and the other three, without being dead, have lost much of their influence and are no longer ‘ideas in good currency’.  Thus white Australia has been replaced by a general acceptance of the idea that Australia is a multicultural society which, as such, is reasonably successful and can and should be kept that way.  The idea of imperial---and American---benevolence has been largely replaced by the idea that Australia's defence is in our own hands.

Outside these new truths, a mighty battle rages amongst the few who care about such things to find a new set of widely agreed principles to guide Australia through coming decades.  Most obviously, a declining belief in the Australian settlement has been paralleled by a rising belief in ‘economic rationalism’ and the need for Australia to compete in a global economy.  Will the victory of the economic rationalists be complete?  How long will it last?  Will other ideas emerge to displace this headlong rush?  What might they be?  But first, back to the past; political, economic and social.


Viewed broadly enough, there has been remarkably little change in the legal frameworks under which federal, state and local governments have operated since federation.  While the federal constitution has been amended a handful of times, the history of government in Australia can be viewed as a body of attempts to achieve political goals within self-imposed and largely ‘fixed’ ‘rules of the ‘game’.  So, while there have been numerous substantial, even dramatic, changes in the roles and functions of governments (eg the shift of taxing powers from the States to the Commonwealth),  we have remained a federation in which the States hold the residual powers and local government is a creature of state government.

Within this framework there has also been much more agreement than disagreement on fundamentals between the more- and less-conservative sides of politics.  Agreement up until the 1970s on the principles of the Australian settlement was followed by broad agreement in the 1980s and 1990s on directions to be taken with respect to the economy and society, the exception here being a greater willingness by the Labor party to attempt to maintain the social wage, ie public expenditure (on health, education etc) that reduces the need for private expenditure.[9]   Only in the 1970s did the Whitlam Labor government impose a rate of social and institutional change on Australia which was quite unacceptable to conservative interests and, indeed, the electorate.

Outside the two-party system, a small, radical nationalist movement, seeking socialism through communism, flourished from the 1930s through the 1950s.  The ideas behind later social movements such as environmentalism and feminism have modestly influenced the mainstream parties, bringing some degree of both change ( a green tinge? ) and neutralisation in the process. Certainly women are now occupying and being widely accepted in most of the community’s economic, civic and social roles.

The economy

In Australia's early decades the economy rode on the sheep’s back with assistance from other agricultural exports.  It was the 1930s depression, accompanied by social chaos in rural and mining areas, that effectively forced us into the import-replacing industrialisation that became the basis for a post-war economic boom.[10]  Thus Australia ran a bipartisan protection strategy till the early 1980s which allowed reasonably high wages, low unemployment and a diverse manufacturing sector while achieving reasonable import replacement. 

This strategy was abandoned in 1983-85 as the Labor government worked to bring Australia out of the era of protection and into a new era of open competition and manufacturing for global markets.[11]  Why go global?  Because Australia could not stay wealthy by selling commodities, especially after Europe’s transformation from being the world’s biggest food importer to its biggest (subsidised) food exporter; and other countries have minerals.  In the twenty years to 1995, Australia's terms of trade fell almost 20% and our manufactures were too expensive to compete on world markets which anyway were turning away from ‘old’ industries such as steel and motor vehicles.[12]  Competitiveness was ravaged by high inflation from 1973 to 1983 (the cost of grinding high inflation rates back to low inflation rates is the lost output and the sharp boost to unemployment of a recession).  Tariffs were cut rapidly and imports surged, paid for by borrowing funds attracted through high interest rates.  Interest payments on such borrowings are now a significant component of the balance of payments deficit.  Unemployment, exacerbated by technological change, soared as imports replaced Australian-made goods, although not enough to reduce demand to inflation-squashing levels.  Australia's trade balance moved from a surplus of $A 183m in 1983-84 to a deficit of $A 3274 m in 1985-86; its current account deficit over those three years rose from $A 7.3 bn to $A 14.3 bn.[13]  However, in the last 10 years the volume of manufactured exports has quadrupled.  Exports of goods and services recently topped 20% of GDP.  But they are still low---the world’s 15th largest economy places 31st in volume of manufactured exports.  The deficit on merchandise trade in 1994-95 was still a very high 1.8% of GDP.

The late 1970s through the 1980s was also a period of financial deregulation, meaning removal of (all) controls on interest rates, exchange rates, capital flows and credit.  Globalisation of financial markets has the effect of narrowing interest rate and equity yield differentials between countries.   It also weakens the link between a country's domestic saving and investment, making it possible for investment to grow for long periods without a corresponding rise in saving, eg Australia.  Private savings in Australia are relatively low anyway, one important reason being that the community does not have a ‘neutral’ choice between present and future consumption; the social security system discourages saving and the tax system encourages spending![14]  The rate of gross fixed capital formation rose in Australia from the mid-seventies till the mid-eighties but, thereafter, resources released by wage restraint under a Wages Accord went into a speculative asset boom instead of productive investment (high interest rates favour speculative investment over investment in industries in highly competitive world markets).

Notwithstanding these problems, productivity has continued to grow, sluggishly, since the end of the long boom in the 1970s.  Real GDP per head increased by over a third between 1972 and 1995 (Table 1.1) and this performance puts us somewhere in the top ten of the OECD growth league.  Over the last five years Australia's per capita growth performance ranks among the top five.[15]  Between 1963 and 1993 manufacturing's share of GDP declined from 26% to 15% while services plus dwellings increased from 59% to 74% of GDP.[16] Mining and agriculture have expanded relatively in Queensland and Western Australia, dragging linked industries along with them.  Meanwhile, the rest of Australia, where manufacturing is relatively more important,  has been focussing on restructuring its TCF (textiles, clothing, footwear) industries, metals industries etc and has lagged behind the ‘frontier’ states.  Perhaps the single most important shift in the product mix has been the marked growth in international tourism.

Table 1.1  Gross Domestic Product Per Person in 1989-90 $A



Gross Domestic Product (GDP)





To 30 Jun

to 31 Dec

at 30 June







per person

per person