One of America’s best known conservative thinktanks has named Australia as the world’s third most free economy, outranking the US after the debut of Obamacare.
The Heritage Foundation’s 2014 Index of Economic Freedom praised Australia’s low debt and “flexible” labour force. It found Australia’s freedom from corruption had slipped marginally, citing the Independent Commission Against Corruption investigations in NSW, but said that the rule of law remained strong.
“Australia’s judicial system operates independently and impartially. Property rights are secure, and enforcement of contracts is reliable. Expropriation is highly unusual,” said the report.
The report placed Australia after Singapore and Hong Kong. Australia was ranked third with a score of 82, just ahead New Zealand with a score of 81.2. The index, also published by the Wall Street Journal, found that America had slid from 10th place to 12th.
“Can you imagine if our Secretary of Defence announced that we were mostly strong, or kind of strong as a nation?” Heritage Foundation president Jim DeMint, a former Republican senator, said at the launch. “I don’t think we would sit still for that as a nation.”
In his keynote address in launching the index in Washington, DC, the Republican libertarian senator Rand Paul lamented the Affordable Healthcare Act in America as a “significant loss to freedom.”
The report evaluates countries on four broad areas of economic freedom: rule of law; regulatory efficiency; limited government; and open markets, and grants an aggregate score.
“Over the 20-year history of the Index, Australia has advanced its economic freedom score by 7.9 points, one of the 10 biggest improvements among developed economies,” says the report.
“Substantial score increases in six of the 10 economic freedoms, including business freedom, investment freedom, and freedom from corruption, have enabled Australia to achieve and sustain its economically 'free' status in the Index.”
.A Heritage Foundation analyst, Brian Riley, told Fairfax that while in the organisation’s view Labor’s stimulus package had been a negative, Australia’s bipartisan commitment to free trade and support for foreign investment as well as its relatively low tax rates, were enough to keep the nation’s score so high.
He said America had slipped in part because of increased regulation associated with the Affordable Healthcare Act.
The Heritage index is not without critics.
“In the hands of the Wall Street Journal and the Heritage Foundation, Washington's foremost right-wing think tank, however, an economic freedom index merely measures corporate and entrepreneurial freedom from accountability. Upon examination, the index turns out to be a poor barometer of either freedom more broadly construed or of prosperity,” wrote economist John Miller back in 2005.
“In other words, minimum-wage laws, environmental regulations, or requirements for transparency in corporate accounting make a country less free, whereas low business taxes, harsh debtor laws, and little or no regulation of occupational health and safety make a country more free.”
The foundation noted that the Asia-Pacific region was home to the world’s four freest economies, as well as three of its most repressed – Timor-Leste, Turkmenistan and North Korea.
The story Australia's economic freedom outranks US: thinktank first appeared on The Sydney Morning Herald.