It is known as “The Lucky Country.” Sun, amazing beaches, a great deal of natural
life and many, many natural resources... This is Australia, a surfer's paradise and
a centre for the sport of cricket! A calm British sport where there is even a break
for tea.
Australia is, dear viewer, such a special and unique country that 80% of its plants
and animals don't exist anywhere else on the planet.
Everything is so different in Australia, compared to the rest of the world, that even it’s
characteristic animal, its national symbol, doesn’t run, or even fly... it jumps!
But Australia’s natural environment is not only unique, it's also rather terrifying.
Australia has more deadly things than any other place in the world. For example, all
of the ten most poisonous snakes are from Australia!
Not enough evidence for you? Want some more examples of the deadly Australian ecosystem?
Well then, have a look at these four animals: The funnel-web spider, the box jellyfish,
the blue-ringed octopus, and the stone fish. They are all in Australia and they are the
deadliest of their kind.
And be careful, because there is more, much more:
Giant crocodiles that weight more than 1,500 kilograms, sharks of all kinds and sizes.
And if animals don't scare you enough, don’t feel safe yet, there are many more natural
dangers of all kinds, because this is a dry, hot and aggressive climate.
However, none of those things have stopped Australia in any way from becoming a dream
for millions of people who dream of a better future.
And it’s only logical. I mean, take a look at some of the incredible places we can find
there.
This is the Gold Coast: And, hey, we are not only referring to regular
folks heading to Australia for a brighter future here… In the last years Australia
has been like a magnet for millionaires as well. But why?
To find out the answer to that that we are going to leave animals aside and talk some
business.
AUSTRALIA: A MAGNET FOR BIG FORTUNES
Every day it gets easier to move around the world. Today we can reach almost any place
in a quick, comfortable, and affordable way.
Further, thanks to the internet and all new kinds of communications methods, you can run
a business from wherever you want.
And just look at how things have changed: Just 50 years ago, for a trip between London
and Sydney we had to make many stops on the way and it never took less than 3 days. Today,
this same trip can be done in much less time - in a a little over 20 hours. And today this
plane is more comfortable, safer than ever, and has a wide selection of in-flight entertainment.
Because of this increase in the ease of travel and communications, wealthy business people
have become more demanding of their country of residence. After all, they can now easily
choose where they prefer to live without it affecting their business.
And it’s not only attractive taxes that affect the choice of where a wealthy person
lives... they also want to live in places with a high standard of living, where it’s
easy to do business, where has good schools, as well as safety in terms of both physical
security as well as judicial safety... Meaning they can leave their savings safely deposited
somewhere, safe in the knowledge it won’t be seized by a corrupt politician who they
have had an argument with.
“64% of Chinese millionaires have either emigrated or plan to emigrate—taking their
spending and fortunes with them”. Hurun Report, 2014.
And Australia has a lot to offer these millionaires.
On the one hand, it is the fifth most free economy in the world. It is easy to do business
there, and there are a plenty of opportunities for business. The justice also works well,
it has a a very competitive financial system, and regulations (as a general rule) are pretty
light. On the other hand, it is one of the countries
with the highest standard of living in the world. There are a huge number of quality
services like hospitals, universities and schools.
In fact, year after year, Australia's big cities maintain the highest positions in the
international rankings in terms of quality of life.
As an example, Melbourne, for 6 years in a row, lead the quality of life ranking as compiled
by the Economist. It must be a wonderful place!
And if that wasn’t enough, the country recently created an “open door project” for people
with significant fortunes. In Australia, all those millionaires willing
to invest around 3.5 million US dollar will obtain a permanent residence card. And if
they come up short, they can get a lot of advantages from 750,000 dollars.
Life quality, ease of doing business, and open doors... What do you think the result
of all of this is?
Well, the result is very interesting. In both 2015 and 2016 Australia has been the country
where the most millionaires have moved to, beating out even the United States.
In 2016 in particular, 11,000 millionaires moved to Australia. An unbelievable figure
for a country whose population is less than 25 million.
And honestly, that might be the best indicator of the unstoppable Australian economy.
THE BEST VERSION OF THE UNITED STATES
When you arrive in Australia some might say that they feel they have arrived in an “improved
version of the United States”. This is to say, in general, the cities, system, and society
in both countries is quite similar. Australia even has its very own Washington,
a capital city built for and by the political powers. Because it’s easy to forget that
the capital city is not Sydney or Melbourne, it´s Canberra.
The truth is you could mistake Australia for America at first if it wasn’t for the fact
that the cars are on the wrong side of the road and there are statues of Queen Victoria
decorating the cities.
Interestingly, Australia is still technically a monarchy and its queen is Queen Elisabeth
II. Well, the thing is that, besides all the similarities,
Australia is a safer, cleaner, more modern, more cosmopolitan, and more prosperous country.
And Australians are also richer than Americans. “When Australians visit the U.S. they see
a country in decline. Australians see the bad airports, the infrastructure, the poor,
the beggars”. Richard Flanagan
So, now maybe you can understand why people think Australia is something of an improved
USA.
Now, generally speaking, international media doesn’t pay a ton of attention to Australia...
but this shouldn’t be the case, because this is a country hasn’t seen an economic
crisis for 26 years! In fact the last time the country went through a crisis, Gorbachev
was still in power in the Soviet Union. Not bad, ay?
No financial crisis, no crisis over raw materials, no unemployment… seemingly no problems at
all!
And, well, what’s the result of all this prosperity? With a population of just 24 million
inhabitants, its economy is already as big as Russia´s.
Now it is also important to note that Australia is very dependent on its raw materials. They
make more than half of its exports. “In 2019 Australia will replace Qatar as
the world’s leading exporter of natural gas.” Expansión
So, when the prices of raw materials started to fall, it seemed that Australia would be
facing a situation similar to those which occurred in Russia, Brazil, Ecuador, Saudi
Arabia etc… It seemed as if the good times were about to come to an end.
But the reality is entirely different. In Australia, unlike almost every other producing
nation, the crisis in raw materials didn’t cause any harm.
So, what is it that makes Australia almost invulnerable to any kind of crisis? Well,
let’s see... THE SECRET OF SUCCESS
To those who regularly follow VisualPolitik, you already know we like to say: “Good policies,
good results”
That is exactly what Australia has done in the last few decades: reforms.
The changes were many, so we will mention just the most important ones:
First, their government decided to bet on opening up the economy to the international
market, removing most tariffs. The country is today a firm defender of free trade agreements.
Second, in the early 90s, the labor government of Paul Keating decided to start a retirement
system known as “SuperAnnuation”, based on capitalization. So each worker saves and
invests a part of their salary to pay for their retirement. In this way the Australian
system is similar to the one in Chile.
The results are outstanding, the program has allowed people to generate large quantities
of savings which have been invested in the productive economy.
Besides, all this money saved has launched the finance industry. For example, Australia
is already one of the most important markets for investment funds. And it isn't just that:
“Australia leads the world growth in finance technology” - ICEX
Third, in 1995 they started the National Competition Policy, the aim of which was to reduce state
interventionism in many sectors.
This program allowed the elimination of, wait for it, almost 2000 rules and regulations
which restricted competition. Also, an ambitious program for privatization and elimination
of state monopolies was launched. Want an an example? Well, that would be Qantas.
One, two, three! Big, major changes! And then we also have budget stability, labour flexibility,
and so on and so forth.
And the result? Well, 25 years without a recession, an economy with no unemployment, and an average
salary of more than $5,000 a month. And that’s not even mentioning the tons of foreign investment.
Sounds pretty good, right?
Well, we at VisualPolitik will draw the conclusion that is is wrong for a country to blame the
price of raw materials for a financial crisis. They simply didn't do their homework. And
you know who did? Yeah, Australia!
So, what do you think? Do you think that Australia is a great destination for the wealthy? Do
you think that the country could be to the 21st Century what the USA was to the 20th?
Let us know in the comments below.
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