Any British visitor to Australia will find many things that seem familiar: the red and green parliamentary benches, common law courts, people driving on the left side of the road, and a language they can understand—most of the time. There is an Australian Broadcasting Corporation that echoes the BBC and, of course, cricket and rugby.
But that British visitor will also notice differences—and one in particular. People may complain about their politicians, but there is still an overall sense, a feeling in the air, that modern Australia is a prosperous place that just works for ordinary people. Is there a similar feeling in Britain in the 2020s? Didn’t think so.
These impressions are not wrong. Since the turn of the century, Australia has pulled away significantly from Britain—a country where economic prosperity, life expectancy and health outcomes were once similar. Australians are now 30 per cent richer in GDP per head, and almost 60 per cent better off when it comes to the net wealth of the median citizen (indeed, the person in the middle of society is richer in Australia than anywhere outside of Luxembourg).
Australians now live on average two years longer than Britons and, if they have cardiac issues or a cancer, they will not only get diagnosed sooner but they will then survive longer. Until Covid, Australia managed to go almost 30 years without a recession. Even after its financially damaging lockdowns, Australia retains a AAA rating (the UK is AA), has less than half the national debt (relative to GDP) and a budget surplus into the bargain. Normally, as a proud Australian myself, I’d be delighted at us beating the Poms—but, frankly, this is a bit much.
What accounts for the divergence? Ask an average Australian and they are likely to attribute their remarkable and unusual national health and prosperity to an important but capricious resource—luck. They’d be taking their lead from the title of a 1964 book by Donald Horne, The Lucky Country, which has helped to define the way Australians think about their country as an accidental beneficiary of natural resources and of ideas from elsewhere.
But the facts don’t back up this notion. If you sift through them—as I have while writing my own book, a 60-year update and riposte to Horne, We Should be so Lucky—they suggest that, since the completion of its federation in 1901, Australia has grown institutions, values and a culture that are unique in the world and stronger than most people, even Australians, realise. They’re not perfect, of course. But they are extremely adaptable, and arguably deliver better outcomes for the average person than almost any other place on Earth. There is an Australian Way of doing things—and countries like Britain should look at where it might make sense to emulate it.
The Australian Way has several key elements. A unique voting system—combining compulsory voting, ranked-preference ballots and a rigorously independent electoral process—which steers politics away from polarisation and enhances the legitimacy of the result. A unique mix of public and private provision in health, education and national savings that has delivered equity without constraining innovation and excellence. Australia has remained relatively pro-trade, pro-immigration, pro-foreign investment and pro-competition at a time when many countries have retreated from these paths to economic success. Judicious financial regulation has avoided the banking crises seen in other countries, while workers enjoy strong bargaining power to spread the gains from economic success. The list could go on and on.
Above all, there’s the national character of Australia—what I call a “sceptical pragmatism”. This melds a willingness to try new things, unburdened by the weight of tradition or class and fuelled by the early adoption of new technologies, with a small-c conservatism that prefers evolution to revolution. This enables continuous adaptation without the convulsions that many other western countries have experienced in recent decades.
British policymakers often look towards the US, Germany, France and even China when trying to determine what does and doesn’t work. But Australia is possibly a much better case study, not least because of the historical overlap between the two countries and certain shared values. And yet, for a G20 country of increasing strategic importance—with a GDP larger than South Korea’s and Spain’s, and almost as large as Switzerland’s and Saudi Arabia’s combined—Australia is not well understood. So where should the denizens of Whitehall and Westminster start the understanding process? What can they learn from Australia that could help the UK to move on from the economic stagnation and political dysfunction that have marked the past couple of decades? There are four areas that stand out:
1. Update democracy for the 21st century
Many people know that voting is compulsory in Australia; you must at least turn up at the booth on election day, which has gained the ironic nickname of the “democracy sausage” for all the community sausage sizzles that take place around the actual vote. There is no obligation to choose a candidate—you can spoil your ballot or leave it blank, if you want—but it turns out that almost everyone does express a preference when they have the opportunity.
Less known is that the Australian voting system also features preferential voting, where voters number the candidates in order of preference, and the lowest counts are eliminated until someone has more than 50 per cent of the vote. (This is often confused with proportional voting, but isn’t the same thing.)
The combination of these two features means that the person ultimately elected to a constituency will be the top choice, or least-bad choice, of at least half of the people eligible to vote in that place. By contrast, the current non-compulsory, first-past-the-post system in the UK regularly allows people to get elected with votes of only 20 to 30 per cent of the people eligible to vote, and leads to wide divergences between whom people vote for and who is actually in parliament—not to mention all that messy tactical voting. This breeds alienation, and we’ve seen it amplify the extremes of the political spectrum.
In a polarised world with threats from inside and out, the perceived legitimacy of election outcomes is crucial. The Australian experience shows that combining compulsory and preferential voting can drive political debate to the centre (you need to persuade the “middle person”, not “bring out the base” by getting them riled up), help the centre hold and keep extremists in a box.
Australia’s written constitution, clear federal structure and elected upper house of parliament also serve the country well and have contributed over recent decades to its stronger economic and social outcomes than the UK. Contrast the Australian Senate (equal representation from different parts of the country, elected and amending legislation) with the House of Lords (a mix of patronage and inheritance, with no limits on how many people can be appointed).
Or, if you can bear it, contrast the Brexit vote (where there was no clarity over what Brexit actually was, or how it would be implemented) with Australian referendums. In the latter, precise legislation must first be passed by parliament so people know what they are voting for, and the hurdle is transparent and needs to get support from a majority of the six states as well as nationally. It’s harder to get country-transforming constitutional change through in Australia, but that may be no bad thing.
The relationship between Australian states and the national government is not totally rosy, but it is more effective than the messy, unresolved devolution that seeks to separate England, Wales, Scotland and Northern Ireland while somehow keeping them within a United Kingdom. The smaller Australian states elect the same number of senators to the upper house as the larger states, and taxes are mostly collected at the national level (like the UK) but spent at a state and local level (unlike the UK). All of these Australian systems help with that obsession of successive UK governments—“levelling up”—avoiding the centrifugal forces that push a country apart.
2. Diagnostics and a mix of public and private in healthcare
People in the UK are rightly proud of the original vision of the National Health Service—to ensure that when you get sick you don’t have to worry about the bill. But, from the perspective of an Australian (and maybe from the perspective of some Brits too), the NHS has become a sclerotic bureaucracy, trying and often failing to deliver healthcare to an older and more demanding population through centralised government monopoly. Meanwhile, the largely private US system leaves many people without adequate healthcare. Could there be a third way?
Yes, there is. Australians enjoy lifespans two years longer than Brits and have much less variation in health between rich and poor; and all for a lower cost, relative to GDP, too. This all comes from a health system that, like other high-performing systems across the world, offers a strong mix of public and private provision—combining a minimum level of care for all with the incentives necessary to drive innovation and performance. About half the hospitals in Australia are privately run, and around half of Australians have private insurance cover (with various carrots and sticks making it attractive for higher-income earners to contribute to the system). This mixed funding model has helped to build a number of the world’s best medical research clusters, from the Melbourne Biomedical Precinct to Westmead Health in Western Sydney, and enabled a focus on mental health and disability care that most other countries lack.
British people might also like some of the other features of the Australian healthcare system: there are five times as many MRI and CT scanners in Australia, relative to population (many of them bought and operated by private doctor-run businesses), and more and better-paid doctors and nurses. In contrast to the hospital-heavy approach of the UK, Australia has much more available primary healthcare (patients choose their GP, and the doctor is paid for the time they spend treating patients—rather than on “registering” them, as in the UK), so issues are identified and treated earlier.
It’s important to reiterate that none of these things are because Australia spends more money on healthcare (it actually spends a bit less); they are to do with the way that the system is structured. Perhaps it’s not surprising that the UK’s health secretary, Wes Streeting, made a visit down under before last year’s election.
3. Invest in society and cohesion
Many might feel that the civic architecture of the UK has deteriorated in recent decades—funding has been cut from the police, courts and prisons. But the opposite is true in Australia, where state governments are responsible for delivering such services and feel the heat to perform, so people feel safer.
Australia’s federal system, multiple capital cities and strong state governments have also made for much more successful efforts to “level up” different geographies (no one city or geography is politically or economically able to dominate), and a substantially higher minimum wage and strong worker protections have also led to fewer people falling between the cracks of society.
Of course, it’s not just about how things are funded. An observant visitor to Australia from the UK would notice that the Aussies have been quicker to act on transparency of political donors and on foreign interference in politics and university research (which is only now starting to get some belated attention in Britain). There are independent anti-corruption commissions federally and in each state in Australia; in fact, state premiers have been brought down for not declaring gifts of expensive bottles of wine or for not reporting suspect conduct by a boyfriend, behaviour that would not even raise eyebrows in recent UK legislatures. Australian politics has come firmly to the realisation that trust isn’t just something that’s nice to have—it’s essential for societal cohesion.
Australia is also famous for its selectivity in immigration (since the 1970s, people have come in mostly through a “points-based” system that prioritises various skills) and on measures to stop illegal immigration. John Howard’s tough stance on “sovereign borders” in the 1990s (“we will decide who comes to this country and the circumstances in which they come”) attracted plenty of disapproval in Europe at the time, but measures such as offshore processing of refugee claims are now slowly being copied in Britain and the US as the penny drops that parts of the population will become quickly radicalised if they believe that control over borders has been lost.
4. Reform from the centre
The 19th-century Britain that gifted countries, including Australia, with what was then a state-of-the-art parliamentary democracy and an incorrupt common-law system was known for its pragmatism. While other nations indulged in ideologies and revolutions, Britain was the nation of shopkeepers and incremental improvement. This has been less evident in recent years.
Australia’s three decades of success started with a Labor government in 1983 that implemented Thatcher-style reforms—privatisation, income tax cuts, action to reduce industrial disputes—without those reforms’ harder edges and, crucially, with more support for those left behind. Subsequent Liberal conservative governments maintained a sharp focus on meeting the needs of middle Australia, not least through a combination of tax cuts and handouts. Politics has stayed in the centre ground.
Meanwhile, the UK has become a more polarised place, from Jeremy Corbyn to a splintered Conservative party preoccupied with issues disconnected from the average worker.
The way back to “delivery-focussed” pragmatism would be greatly helped by some of the changes in constitutional and voting arrangements noted above—ones that force policymaking into the centre ground—but they also require a change in mindset. Rachel Reeves and her colleagues are already looking, for instance, at Australia’s high-performing sovereign wealth fund and its gigantic $3.9 trillion superannuation (pension) funds, which soon take 12 per cent mandated contributions from employers to drive strong investment in local equities and alternative assets.
These might not sound like exciting doorstep propositions, but that is partially the point—they are examples not of “big” or “small” government, but of pragmatic public-private partnership undertaken to increase the pool of national savings, enhance local capital markets and reduce the burden of funding pensions in the future. These are grown-up aims and grown-up ways of delivering them.
Ironically, just as some policymakers in Britain and elsewhere are waking up to the benefits of the Australian Way, there are signs that Australians are sleepwalking away from it. The tendency of many Australians to put their relatively good fortune down to luck—as well as their easy-going attitude in general—has allowed complacency to set in. To attribute success to luck means that Australians don’t appreciate their special sauce—and could forget the recipe.
The global re-emergence of protectionism and centralised industrial policy is likely to lead to failures throughout the world. But for countries like Australia and the UK, the risk is particularly pernicious. Whenever Australian governments have driven large centralised “investments”—from broadband to defence procurements—the results have been disastrous. The damage is not only in the direct waste of money, but in the way that incentives in the private sector shift from building and competing to lobbying and stifling competition. Australia’s strength has been its adaptability; its willingness to quickly seize on—and often develop—the successful innovations of other countries; and its impressive skills base, born of a high-performing local education system and targeted immigration from around the world.
Britain can rightly take pride in having bequeathed to Australia—and other countries—a set of liberal-democratic institutions and values that were second to none when Australia’s federation took place in 1901. But, even in the early 20th century, Australia was already evolving this settlement in positive ways: pioneering the female franchise 20 years before it came to Britain, inventing the secret ballot (for many years known as “the Australian ballot”) and turbocharging workers’ rights with minimum wages and long-service leave.
Much later, Tony Blair used the Hawke-Keating Labor party of the 1980s as an inspiration for New Labour, while the Tories borrowed some ideas on immigration from their Australian counterparts. Now, as the Starmer government tries to reset its narrative and kickstart a crucial decade of restoring growth and confidence, it could be timely to look again—and to look more deeply—at what the UK can learn from the Australian Way.
Andrew Low’s We Should be So Lucky is the inaugural release from Prospect Editions, Prospect’s new book-publishing endeavour. You can pre-order We Should be So Lucky in hardcover or ebook here. Find out more about Prospect Editions here.
