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The past 25 years have been kind to Australia: the country has enjoyed sustained economic growth, a spike in life expectancy and an unshakable relationship with the US. There are mounting concerns in Canberra, however, that danger looms on the horizon. Over the past year Australia’s reputation as “the lucky country” has been threatened by complex challenges: affordable housing in Melbourne and Sydney is at an all-time low, Chinese demand for Australian commodities is fluctuating and Donald Trump’s unpredictable foreign policy is sowing anxiety in the defence community. “We used to depend on the US to keep us safe and China to make us rich,” says Hugh White, professor of strategic studies at the Australian National University. “Those pillars are less stable than they once were.”

Australia’s leaders have confronted these changes with mixed success. Prime minister Malcolm Turnbull is working hard to lessen his country’s reliance on mining and continues to create diplomatic inroads in Asia. His pragmatic economic approach has protected the country’s triple A credit rating (for now) and kept unemployment low. Turnbull has also done a decent job of standing up to far-right organisations, such as Pauline Hanson’s One Nation party.

But there’s more to be done. Australia’s education system has been slipping down the global ranking for years, the country’s refugee programme continues to attract criticism and there’s the unresolved question of whether same-sex marriage should be legalised. The way in which Turnbull negotiates such matters will impact Australia’s future. It will also determine whether he becomes yet another casualty of one of the world’s most ruthless political cultures. Since 2010, the country has seen five leadership changes, leading some to call it “the coup capital of the democratic world”. To bring an end to this trend, Turnbull needs to show composure, strength and a vision for the future.


Foreign policy

Earlier this year the Australian government recalled 100 of its top diplomats to Canberra to help draft a new white paper on future foreign policy. Australia must chart the coming years carefully and among its most pressing challenges is its relationship with Washington. The election of Donald Trump has forced officials in Canberra to ask whether Australia can still count on the US to act as a stabilising force in the Asian Pacific. Turnbull’s first phone call with the US leader did little to boost confidence (Trump reportedly chewed Turnbull out over a refugee-resettlement deal negotiated during the Obama administration).

The pair’s relationship has since warmed, however, thanks in part to a shared concern: Beijing. China’s influence is spreading closer to Australia’s doorstep but given that the country is a major trading partner, Turnbull has to be prudent. Foreign minister Julie Bishop has protected Australia’s diplomatic presence in the Middle East and Asia by opening consulates in Doha, Makassar and Phuket. Foreign-aid cuts have complicated her mission, however, and a chequered history with refugees has dogged her bid to gain a seat on the UN Human Rights Council.

State of the economy

Australia may be enjoying its 26th year of straight economic growth but the country’s leaders can’t afford to be complacent. Wages are stagnating, national debt is rising and there are widespread fears about housing affordability.

Leader’s performance

Turnbull’s poll numbers are shaky and the popularity of opposition leader Bill Shorten is creeping up. One of the most frequent criticisms levelled at Turnbull is that he’s slow to act on big issues. But it’s hard to blame him for treading carefully: the Liberal party is still not unified after the ousting of Tony Abbott and the threat of another leadership challenge is a constant concern.

Energy policy

Australia is the world’s second-largest exporter of liquefied natural gas but longstanding contracts mean that many Australian extractors have to send most of their product to Asia. Meanwhile, electricity prices are soaring and last September the entire state of South Australia was plunged into a blackout after a freak storm. There’s growing debate as to whether the solution is more renewable-energy projects or new “clean coal” technology.

Expert opinion

“Even though we are a calm and stable country, we have an ugly political culture. It affects the way we conduct public debates and it affects people’s desire to participate in politics.” Erik Jensen
Editor, The Saturday Paper

“Australia doesn’t know how to position itself in an Asia where China is so powerful. We’re just hoping that the US will fix it for us. Even before Donald Trump was elected that was a long shot. Now it looks impossible.”
Hugh White
Professor of strategic studies, Australian National University

“The government has been unwilling to commit to any credible climate policy. It needs to pick one and stick to it. If it doesn’t people are going to be reluctant to invest in electricity generation.”
John DaleyCEO, Grattan Institute, public-policy think-tank

What needs fixing

**Language training: ** The government needs to invest in language-learning programmes. Only 10 per cent of staff at the Department of Foreign Affairs and Trade speak an Asian language.

Technology: Substantial upgrades are needed to encourage business innovation in Australia, such as improving internet speeds and increasing mobile-phone coverage.

High-speed rail: A bullet train between Sydney and Melbourne has been in discussion since the 1980s. The project would cut air pollution, create jobs and reduce congestion.

Soft-power credentials

Coffee: Aussie baristas personify the charms of Antipodean hospitality: friendliness, sophistication and warmth. Australian-style cafés are popping up everywhere from Los Angeles to Jakarta.

Australian Broadcasting Corporation: From comedies such as Please Like Me to period dramas, Australia’s public broadcaster presents a nuanced depiction of Australian values to a growing audience overseas.

Aussie-rules football: Australia’s national game is winning fans worldwide. In May the sport’s ruling body staged a game in Shanghai and, while Chinese premier Li Keqiang wasn’t able to attend, he did accompany Malcolm Turnbull to a match in Sydney earlier in this year.

Dangerous wildlife

In April, West Australian teenager Laeticia Brouwer was attacked and killed by a shark while surfing. The death – the third of its kind in 12 months – led many politicians to ask whether more could be done to prevent further fatalities. Most agree that culling is not the answer. Instead, West Australian premier Mark McGowan has proposed a government subsidy on wearable devices that repel sharks.

Monocle view

Despite constant leadership changes, Australia has avoided many of the problems that other developed nations have faced during the 21st century. The country’s economy is solid, it has avoided large-scale terrorist attacks and the national political discourse remains moderate.

Grade: B+. For Australia’s prosperity to continue it will need to take difficult decisions.

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