‘Threat of recession’ looms over Australia

After 22 years of unbroken prosperity, Australia now faces "serious economic challenges", the inaugural Australia Lecture in Dublin heard last night.

At the same time, Australia, which traditionally backs the US in military conflict, now finds its political relationships with the rest of the world have become more complicated, political journalist Paul Kelly, editor-at-large of the national broadsheet The Australian, said.

The country had become “complacent in prosperity” and must adjust to life after the “epic event” of its mining boom, he said.

As China’s exceptional growth rate slows, a “threat of recession” hovers over the new Liberal government led by Tony Abbott.

“For the first time our major trading partner is not a strategic ally,” he noted, adding that a “central test” of its foreign policy would be to “ensure we never have to choose” between the US and China.

Australians are pragmatists who prize "their British heritage, Irish spirit, multicultural society, trade with Asia and links to the US" and "they don't see why they can't have the lot", he told the audience at the Royal Irish Academy.

Mr Kelly 's next book will cover the six years of the "troubled and divided" Labor government that held office for two terms from 2007 until September of this year under the leadership of Kevin Rudd, then Julia Gillard, then Kevin Rudd again. The Labor government provides an "anti-model" for Mr Abbott, a conservative in the John Howard mould.

The Australian media does not have the power to decide elections, but merely "accentuates" trends in the public mood, said Mr Kelly, whose newspaper is owned by Rupert Murdoch's News Corp Australia.

The event was organised by UCD’s Australia Studies Centre and Mr Kelly’s visit to Ireland was funded by the Australian government. The Australians and the Irish “invariably get on well together when they meet”, said Mr Kelly, who is of Irish descent.