Backs to financial future

Australia is turning its back on the world.

Not only is it seeking to put up barriers against people moving here, but it is also now looking decidedly protectionist and xenophobic about Chinese investment in particular.

It is not only the Greens who are peddling this recipe for economic disaster, but elements of the major parties, even the supposedly free market-oriented Liberal Party.

Let's set out what is at stake here.

Since Paul Keating became Treasurer in 1983 and there emerged a bipartisan political consensus about the need to reduce trade barriers and liberalise the domestic economy, Australians have experienced strong economic growth. The recession of the early 1990s was the only blip on the screen.

John Edwards, a Keating biographer and economist, has argued that the reason Australia has experienced strong economic growth since 1991 is because "tariff cuts and the float of the currency and banking deregulation in the '80s opened new opportunities at the same time as they sharply increased competition in the Australian economy".

The other driver of growth was the switch from wage arbitration to enterprise bargaining at the beginning of the '90s "allowed the redeployment of labour just as cheap new technologies in communications and information technology were offering the opportunities to reorganise production, distribution and exchange".

And now the major factor driving economic growth in Australia is globalisation, says Edwards.

"Australia's increasing participation in the global economy, itself driven by powerful and long-term forces, is now helping to sustain a robust expansion of indefinite duration," Edwards argues in a 2006 paper published by the Lowy Institute, a think tank.

But politicians with wrecking balls in their hands are threatening Australia's open and liberal economic outlook. The Greens are at the forefront of this counter-revolution.

Greens Leader Bob Brown is an old-style economic nationalist.

He lines up with Pauline Hanson, Barnaby Joyce and Bob Katter on the issue. Brown recently made a song and dance about a possible takeover of the Australian Securities Exchange by its Singapore counterpart.