Australians who entered the workforce when unemployment was hovering around 10 per cent in the late 1970s and early 1980s were often regaled with tales of "the good old days" a decade or so before when the economy was booming and school-leavers had their pick of whatever job they wanted.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
While it may not seem like that, we've just clocked up a remarkable 2½ decades of comparable growth and prosperity.
This month marks the passage of 25 years since Paul Keating's "the recession we had to have" came to an end.
A belated, but inevitable, consequence of the 1987 stock market crash that saw Australian shares shed 40 per cent of their value at a time when the global average was 25 per cent, the year-long recession was the worst economic downturn in this country since the 1930s.
It spelt the end of the "greed is good" mentality of the 1980s and led to a major restructuring of the Australian economy that saw automatic wage indexation replaced by enterprise bargaining and productivity-linked wage increases and the end of tariff protection.
While today's Australia enjoys a more prosperous and stable economy than the one we had in the late 1970s and the early 1980s, the human cost of that last recession, the period that preceded it and the restructuring that followed was high.
Real wages fell for much of the 1980s and early 1990s thanks to a punishing annual inflation rate of 9.2 pe cent. This was reflected in home loan interest rates that peaked around 18 per cent in 1990. Commercial interest rates went even higher.
This was the era when highflyers such as Alan Bond and Christopher Skase came unstuck in spectacular fashion, former Western Australian Labor premier, Brian Burke, was jailed for corruption, the State Banks of Victoria and South Australia went bust, the Pyramid Building Society collapsed owing $2 billion and Estate Mortgage went under, wiping out the retirement dreams of thousands of investors who had been seduced by offers of 20 per cent returns.
By contrast the economic challenges of the past two decades seem quite dull and boring.
The only western economy that has outperformed Australia is the Netherlands with 27 years of consecutive GDP growth from the early 1980s to the Global Financial Crisis.
That nation's experience is a timely reminder that however good things have been the question about the next Australian recession is not "if" but "when".
While, thanks to a combination of good luck and good management, this country has managed to dodge quite a few bullets in recent times, nothing lasts forever.
A very real concern, and one that needs to be addressed, is the much higher level of household debt that exists today than in 1990 when families usually owed only about half their annual income.
Many Australians will be left without a chair, or a house to put it in, the next time the music stops if they don't reduce their borrowings now.
