The future of the Australian federation: intergovernmental financial relations amid growing fiscal pressures

Australia avoided the worst of the 2008-9 financial crisis courtesy of low levels of public debt, a sound and decisive macroeconomic response, a stable and conservative financial sector and, above all, a conveniently timed iron ore and coal export boom. Indeed Australia, unrivalled among advanced economies, has enjoyed over a quarter of a century of uninterrupted annual economic growth. Australia's performance has been widely lauded, with The Economist (2011) speculating that Australia was destined to become 'The next golden state' and international financial institutions such as the Organisation for Economic Co-operation and Development (OECD), the International Monetary Fund (IMF) and the World Bank providing unqualified praise for Australia's economic resilience. This impressive reaction to the financial crisis, combined with a reputation for stable and cooperative intergovernmental relations, has tempted some scholars to conclude that the outlook for Australian federalism is benign and the need for reform is slight (Menzies 2014, p. 67).