The Sweet Spot, by Peter Hartcher

Peter Hartcher’s new book, The Sweet Spot, celebrates the economic policy work of Australian governments over the past thirty years. Australia, through the diligent work of its politicians, managed to get the balance right between a free economy and a welfare state. But such economic progress is at risk of stagnating if Australians become too complacent.

Peter Hartcher is one of Australia’s classier print journalists. His work is politically non-partisan, and his style urbane without being elitist. He writes for the serious citizen interested in public policy in a way that is also accessible to the common reader. Economically he is convinced of the efficacy of open markets, and lauds the work done by both the Hawke-Keating and Howard-Costello governments in modernising the Australian economy. As Hartcher sees it, this has provided great wealth and opportunity for the people of Australia. Before these substantial changes under Bob Hawke and Paul Keating, Australia was a closed shop reliant on high tariffs to protect its industries.

Australia, however, didn’t pursue economic freedom at the expense of fairness and equity, and this is why Hartcher has called his book The Sweet Spot. What this means is that Australia’s economic policy settings have found the right balance between, say, the ruthless economic freedom of Hong Kong and the generous social welfare benefits of a country like France. All in all, Australia has provided its citizens maximum wealth and the certainty of a safety net.

Overall, The Sweet Spot is really an economic history of Australia, from inauspicious convict beginnings to today’s sophisticated, world-class economy. The major story arc takes the reader from the protected, high tariff economy, when Australia could rely on the mother country, England, as a key trade partner, to the dismantling of that protection and the opening up of the Australia to the rest of the world.

In amongst this historical narrative Hartcher provides fascinating national economic portraits, both successful and dire, ranging from North Korea to the emerging success story of China. Against this broad canvas of differing economies, Hartcher endeavours to instruct the reader but also put forward his case for Australia as having one of the best economies in the world, achieved by the diligent work of its political class. The Sweet Spot provides a fairly rosy picture and pleads with the reader that to maintain such high living standards, vigilance is needed on the part of its citizens.

There are a few sour notes in The Sweet Spot, primarily the performance of Labor governments from 2007 under Kevin Rudd and 2010 under Julia Gillard. He sees both of these governments as weak on economic policy, lacking in the courage to take the necessary hard steps that Australia will need to take to keep its economy competitive. He cites the unwillingness of either Rudd or Gillard to tackle an emissions trading scheme (Rudd abandoned it, urged on by Gillard. Gillard only pursued it once minority government made it an imperative.) Nor does he let opposition leader Tony Abbott off the hook, describing him as an egregious opportunist with no serious interest in economic policy.

The Sweet Spot makes for a solid overview of Australia’s economic performance over the past two decades, and puts forward convincing arguments for why its citizens need to be especially alert to the danger of complacency. With so much economic strife happening in Europe and America, with the Chinese story still yet to fully play out, Peter Hartcher’s economic history of Australia makes for timely reading.

The Sweet Spot: How Australia Made Its Own Luck and Now Could Throw It All Away, by Peter Hartcher. Published by Black Inc. ISBN: 9781863954976