The Aussies once made fun of the revolving door in Japan’s government, but nobody jokes any more. The Australians have now had five prime ministers in five years. The fundamental issue is the slowing economy and there is not all that much the leaders can do about this.
The main problem is lack of demand from China. The slowdown there has meant less desire to buy Australian iron ore, coking coal and other commodities. The task before the Liberal coalition is finding somewhere else to sell to. There has been a great deal of hope pinned on the ratification of the Trans-Pacific Partnership, of which negotiations were recently finalized but awaits passage by the governments of each of the dozen participants. The hope is this pact will make it easier to sell to the United States and to Latin American nations Chile and Peru as Australia seeks to reduce the impact of the Chinese on their trade.
India’s economy has also become more important to the Australians, but this is still a complex and often-closed system. The new leadership is considered more stable than was that its predecessor, likened to Australia’s version to the U.S.’ far right Tea Party, but the Labor Party is reorganizing as well. As such, it may soon find itself with a worthy challenger if the leadership falters.
- Chris Kuehl, Ph.D., NACM economist