Award is work of many men
Sir Isaac Newton, that great creature of the Scientific Revolution, once humbly declared, ``If I have seen further it is by standing on the shoulders of giants''.
While he is no Newton, Wayne Swan would be well advised to adopt a similar pose of humility now the Australian Treasurer has won Euromoney's Finance Minister of the Year award.
The London-based publication credits the Brisbane-based MP with keeping Australia's economy upright in the face of global financial turmoil.
But our miracle economy has more to do with the giants who preceded Swan: Paul Keating (Labor treasurer from 1983-91 and prime minister from 1991-96) and especially Peter Costello (Coalition treasurer from 1996-2007).
They gave Australia the ballast it needed in the form of free-market reform, prudential financial regulation and budget surpluses to weather the storm.
(Keating also won the Euromoney gong in 1984 for his role in floating the Aussie dollar and deregulating the financial markets. But he did also bequeath to the Coalition government in 1996 skyrocketing levels of debt and deficits, not to mention a downgraded credit rating and stubbornly high unemployment.)
Swan is really an accident of history rather than a force of it. That is certainly how his Labor Party colleagues see him: amid all the backroom jockeying over whether to replace the unpopular Prime Minister Julia Gillard, the name of the Deputy PM and supposedly hyper-competent Treasurer is never mentioned.
A closer look, moreover, suggests Swan is out his depth. He claims he was, within a few months of Labor coming to office, well prepared for the financial crisis. Why fiscal and monetary policy was tightened to contain some imaginary ``inflation genie'' during the months before the collapse of Lehman Brothers in September 2008 is never explained.
Worse, when the crisis hit, Swan panicked and started spending irresponsibly, distorting myriad sectors of the economy with overcooked boondoggles (pink batts, school halls).
Australians can be thankful they have survived twin calamities: global meltdown and Labor profligacy. For all the debt run up by both the Rudd and Gillard governments, they were at least preceded by Costello (who was seen as a more than plausible future leader).
The Howard government, having inherited a huge debt and a dented credit rating from Labor, got Australia back into surplus and its reputation as a borrower restored.
So, despite Labor's best efforts to run the nation into penury, Australia's debt-to-GDP ratio is still only 22 per cent, which would not have been achievable had we hit the GFC without a strong surplus and a AAA rating.
True, the mining boom has helped, but it was not until 2003, seven years into Costello's treasurership, that Australia's terms of trade surged.
Indeed, it is because of Costello's efforts - his landmark reforms to our tax system, a restructuring of financial regulation and a commendable fiscal restraint - that Australia is hailed as a ``miracle economy''. The irony is Costello never won the Euromoney Finance Minister of the Year Award. Never mind, it was his work that has put Australia in the box seat today.