In like a Lamb

By Darwent, Charles | Chief Executive (U.S.), October 1999 | Go to article overview

In like a Lamb


Darwent, Charles, Chief Executive (U.S.)


Stroll along the beach at the Sydney suburb of Homebush Bay these days and you will see a shimmering vision of the New Australia rising before your eyes. A year from now, in September 2000, the Olympic Games will be staged here. The shiny white buildings of Homebush Bay-trophy pieces with names like Stadium Australia and SuperDome-are being built to house them. These buildings have cost the Liberal-National government of prime minister John Howard some US$2.2 billion so far; the kind of public sector spending that would make the normally anti-statist rightwing leader pale.

That Howard has paid up can be put down to two things. First, the Games will mark Australia's symbolic entry into the league of grown-up nations. The fact that the prime minister (rather than Britain's Queen Elizabeth II, still Australia's titular head of state) will open them is being seen as a bellwether for the country's republican aspirations. Second, the huge spending on infrastructure has helped Australia's macroeconomic bottom line look a little less sad than it might otherwise have done. Private sector investment is scheduled to rise by a stripling 0.5 percent this year: remove state spending on the Olympics-and on debugging Australian computers pre-Y2K-and it would probably have fallen, as it did by 3.3 percent in 1997-98. With a 19 percent drop in manufacturing output over the year, a 40 percent fall in mining investment, and an 11 percent dip in export revenues, times have been hard for Howard.

Which is why he and his government were particularly keen to dwell on the one bright spot in Australia's recent economic record. After a disastrous drought in 1997-98 saw millions of head of cattle slaughtered by the country's graziers, Australian meat exports had begun to skyrocket. In the year ended June 1999, they rose by nearly 7 percent. Barely had Howard time to bask in the reflected glory of all this, though, than he was given a sharp lesson in international realpolitik by the man he might have taken as his presidential role model: Bill Clinton.

Citing unfair subsidies by the Australian government, Clinton impose unilateral restrictions on U.S. imports of lamb in July. Australia's meat quotas were reduced to 1988 levels, with tariffs increased to 9 percent on imports within the quota and 40 percent on those above it. These measures, said the American president, were expected to deliver "a $100 million boost to the U.S. lamb industry;" or, put another way, a $100 million blow to the Australian one. …

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