Book Review: Dog Days: Australia After the Boom

Author: Ross Garnaut
Publisher: Redback 3 (an imprint of Black Inc. Books)
Reviewed by Stephen Keim SC

Marko, of Marko and Maree, our next door neighbours, shared a house during his undergraduate days with Wayne Swan. Marko became an architect and Wayne’s days in the treasury portfolio were delayed some decades. Be that as it may, Marko’s gift to me, this Christmas, was a book about economics: Dog Days: Australia after the Boom by Ross Garnaut.

The title of Dog Days is a reference to bad economic times when a government finds friends hard to keep no matter what policies are pursued. The thesis is that the first eleven years of this century have been salad days, when governments could do nothing wrong. The tide turned when the terms of trade sagged in 2011 and will get worse.

Dog Days offers much for the reader who, occasionally, sees oneself as an economist in disguise. The economic history of Australia, concentrating on the Reform Years (from the start of Hawke and Keating to immediately post the passage of the GST legislation) and the Days of Complacency which set in thereafter, is a great reminder course for that little bit of knowledge one imbibes from living through history.

The pleasure of Dog Days is, however, concentrated in reading a serious discussion of serious social and economic policy. Professor Garnaut’s prescription is three fold. Australia needs a massive depreciation of its currency to help trade exposed industries. It then needs policies which get Australia back on the path of improved productivity. And it needs good policies to ensure that the immediate reduction in average wealth caused by the depreciation is shared equitably within the community. This will, hopefully, avoid the benefits of the depreciation being blown on domestic expenditure.

The lesson for the future is that, when our terms of trade are excellent, we should save all that extra income for when times are, like they are becoming, tough.

Education, the crossover between low wage earners and the social security and tax systems and health policy are the subjects of fascinating discussion.

My favourite by far, however, is Professor Garnaut’s discussion of climate change policy. It turns out, while our main stream media were focussing on a measly few boat arrivals in Christmas Island and torture in Nauru and Manus, that both Australia and the rest of the world (especially, the US and China) have been getting on well with the job of reducing carbon emissions.

And the Prime Minister, for reasons only known to him, and Maurice Newman, want to throw it all away.    

Stephen Keim SC
Clayfield