By Andrew Martin 

The “Lucky Country”

When Australia was described as “the lucky country” by Donald Horne in his 1964 book of the same title, it was not meant to be a compliment. He gave a sharp critique of Australia’s intellectual life (or lack thereof) and lamented the mediocrity of its “second-rate” political and business leaders, who had a craven lust for short term gains and a lack of vision when it came to future planning. Horne considered Australia to have a “philistine” attitude towards art, culture and any sort of original thinking, that the social life of the country crushed any tinkling of curiosity. 

And yet, this critique came during a period of what is often considered a golden age for Australia – major technological changes, full employment, strong economic growth fuelled by mass migration (which culturally enriched Australia), a boom in manufacturing, a highly organised working class, rising wages, higher levels of home ownership and social security. 

A more astute and analytical look at the 1960s would reveal it to be more of a gilded age, rather than a golden one. There are many facets of the 1960s that should not be overlooked, its cultural cringe of stringent conformity stifled the younger generation who were chafing at the bit for freedom. 

Horne wrote The Lucky Country on the cusp of a period of deep upheavals. Horne was also right to criticise Australia’s political system for leaving many behind. He highlighted the systematic exclusion of indigenous people and noted that although migrants were able to make contributions to society, Australia lacked an openness and acceptance of their cultures. He noted too, that suburban affluence masked underlying cases of poverty and exclusion. 

Perhaps most interestingly in Horne’s critique, he noted that Australia was dangerously dependent on its “powerful friends”. Raw commodities were exported to the U.K and U.S, rather than building a diversified economy with a focus on innovation. Horne saw the dangers of being dragged into imperialist wars and believed Australia’s xenophobic fear of Asia meant it was bound to its Anglo allies. 

Horne, could never have imagined how Australia would come to be dependent on China and southeast Asia, or how gigantic its resource sectors would grow. Neither could he have imagined the lengths Australia would go to, to cement its military alliance with the U.S. 

Ironically, the term “the lucky country” came to be used by John Howard and other conservative politicians to describe how wonderful it was to be an Australian – as they systematically attacked the country’s social fabric and the historic gains of the working class. Horne later said: “I have had to sit through the most appalling rubbish as successive generations misapplied this phrase.” 

Horne’s critique has stood the test of time, but for most of the working class, the 1960s was a better time to be alive. For one thing, you could afford to be alive and conditions for the working class were continually improving. The working class were advancing socially, culturally expanding their horizons and were winning new rights for the oppressed. They were on the winning side of history – its long arc propelling all people towards liberation. 

Today, particularly if you are young – and poor, Australia is, well, bleak, and its future looks far from rosy. Adding to this frustration is the alienation of mainstream culture which nauseatingly projects images of boundless success and glamour – a tawdry mishmash of tinsel, fake smiles and bright lights that continually conceal the reality of the world we live in. Not all the cracks are visible, but socially, this country is in decay. It’s not yet a free-fall. It is a managed decline. 

Lucky for some

On the surface Australia appears to be doing well. It’s GDP output after a long per-capita recession is steadily growing as is productivity. Unemployment remains low (around 4% – which is considered full employment by most contemporary economists) and wage growth is heading in a positive direction. Household and private business spending is also increasing (with a boom in data centre construction). 

Many households this year experienced an increase in disposable income and dwelling investment increased by 6.5% annually. According to figures released by the ABS, business investment in machinery and equipment increased by 7.6%, while government investment has grown by 3.0%. All states and territories have recorded wage rises with an average of 1.7% for the last quarter across Australia, with the highest being 3.5% in Tasmania. 

What these statistics point to, is that a significant proportion of Australian people are doing very well and their material living standards are improving. Australia consistently has one of the highest median household incomes in the OECD. In 2022, the median household disposable income was $1,203 per week. The median pre-tax household income has grown to about $104,390 per year as of September 2025. 

But it is the rich, who are really cleaning up. A Grattan Institute analysis of ATO and ABS data reveals how much the wealth bar has risen for Australia’s top earners. Over five years, the income needed to be in the top 1% surged by 19% for individuals (to $315,770) and by 16% for households (to $460,028) in 2019-20, illustrating a rapid concentration of income at the very top. To be among Australia’s wealthiest 1%, the required net wealth increases with age, Grattan finds. For those aged 25-40, the bar is $3.1 million. For 41–64-year-olds, it’s $7.7 million. For households over 65, the top 1% controls more than $10.9 million each. 

Household net worth is among the highest globally, driven largely by property and superannuation assets with 66% of Australian’s owning property. This underlines the fact that Australia is a very wealthy urbanised country and largely explains its social conservatism and its long legacy of political stability. It has enjoyed 30+ years without a technical recession pre-2020, a AAA credit rating, a relatively high level of social services and vast natural resource wealth. 

Cracks beneath the surface – a debt fueled tinderbox

While workers are experiencing modest wage growth, this comes on the back of years of stagnation where wage growth has fallen behind productivity. Inflation has ticked up again, partly driven by rising costs for essentials like housing, energy, and services. According to property research firm Cotality, rent has risen 2.5 times faster than wages over the past five years, with renters in deep housing stress spending an average of 33.4% of their income on rent. Meanwhile, according to the ABS, investor lending is up 23.6% over the year. 

Australia’s resource wealth could fund major infrastructure projects, healthcare and education. Instead, its siphoned off into the pockets of billionaires. Independent senator David Pocock highlighted the lunacy of this when he raised in parliament the tax on tens of billions of offshore gas exports provides less revenue than the tax on beer. The first assistant secretary to the treasury, Dr Shane Johnson was forced to concede that this was true; in the 25-26 financial year, taxes on beer paid $2.7 billion while on gas exports (PRRT) it was only $1.5 billion.

The sense or perception of shared prosperity that once underpinned Australia’s social stability is fraying. The reality is disadvantage, a long held problem, is deeply entrenched and it is getting worse. This country has fundamentally failed First Nations peoples who experience this acutely with a stark gap in life expectancy, health, education, and incarceration rates. The failures Horne noted remain. 

The failure of the Voice to parliament underscores the hypocrisy of governments that promote “Welcome to Country” but sit on their hands when it comes to doing anything to improve the situation for Aboriginal people. There is growing distrust in institutions (government, media, corporations), and the prevalence of conspiracy theories remains a problem. The outer suburbs and regional towns that lack services and opportunities are breeding grounds for racism and fascism. Debates around immigration will dominate the next election cycle. 

These cracks are dangerous, and an economic shock could unravel many hard-won historical gains of the working class. Given the decline in manufacturing, the economy has transitioned to one that is much more financialised and unstable. It is over-reliant on high-rise construction and the housing market, which is driven by speculative investment rather than need – it is only a matter of time before the private debt-fuelled bubble bursts. 

It is heavily reliant on commodity exports which are dependent on Chinese demand and global economic cycles. It also relies on immigration to sustain its GDP growth but without simultaneously building the needed infrastructure for it to be a social success – hence the rise in racism and social dislocation. The increasing fragility of Australia’s economy and its social insecurity is a morbid symptom of monopoly capital uprooting social relations that have only been tentatively held together in the post-war period. 

Another factor that will exacerbate Australia’s problems is that its eco-systems are hanging in the balance; it is uniquely vulnerable to climate change, bushfires, floods, droughts and the decimation of natural habitats such as coral reefs and old growth forests. Yet its economy remains heavily reliant on fossil fuel exports (coal and gas). This creates a profound contradiction: the source of its historic wealth is actively undermining its future environmental and economic stability, leading to intense political polarisation and policy paralysis. 

The Liberal party has split itself apart over this issue, but the ALP is also vulnerable to these contradictions. The problem for both parties is that climate change is a global problem driven by the volatility of a decaying world-order dedicated to preserving the use of fossil fuels- the world burns as they fret over political exigencies. 

Global volatility – Australia’s role

A mistake mainstream journalists and analysts make is to view Australia’s role in the global division of power passively and in a way that reduces Australia to being an unwitting accomplice in world affairs which it has little control over – a well-meaning middle power or “regional stabiliser” forced to make compromises with Uncle Sam to maintain peace and security. This pragmatic view holds Australia’s power as derivative—flowing from alliances, geography, and resource endowments rather than its ability to provide leadership and direction to the problems that confront humanity. 

The political realist view of Australia is that it is strategically dependent and structurally constrained by its economic and political alliances; it is forced to play a balancing act between the two major superpowers, China and the U.S. 

No other trading partner can replace or match China’s demand for our goods. In 2024, two-way trade between Australia and China totalled $312 billion. Of that, China purchased $72.8 billion worth of iron ore alone. There are sections of the ruling class that may be willing to forego that trade, but doing so will cause economic and political fractures. Perhaps Australia will buckle to the pressures of U.S imperialism which will insist it cannot serve two masters, but in the meantime, it is playing a very awkward balancing act. 

Casting Australia as a “middle-power” somewhat obscures the role it plays in carving out its own imperialist interests. Its actions have a direct impact on the world geo-political order; its foreign policy is crucial for determining outcomes in the Asia-Pacific and the balance of power in the region. A more critical view of Australia would observe that its alliance with the U.S helps it project its own power. 

The $380 billion(+) dollar AUKUS deal is rightly criticised by many as an abrogation of sovereignty, but Australia has been militarily aligned with the U.S since the signing of the ANZUS treaty in 1951 and it has supported all its conquests abroad. This has enabled it to project its own commercial interests throughout the Asia-Pacific and the rest of the world, particularly in respect to resource extraction. 

This alliance is crucial for the U.S, not simply for the tributes Australia pours into U.S coffers, but because it gives it political legitimacy on the world stage in all its adventures, whether its defending “western values” by providing arms to Israel, spreading “freedom and democracy” to Iraq or fighting for “self-determination” in Ukraine, Australia is a willing-accomplice in the war crimes of the U.S. Its support is far from inconsequential and if social services and infrastructure are lacking in Australia, it’s because there is always money for war. 

For example, a German non-profit organisation named the “Kiel Institute for the World Economy” has revealed that Australia has provided Ukraine with $1.76 billion in aid since the beginning of Russia’s invasion of Ukraine in February 2022. This aid has fuelled a catastrophic loss of life (many hundreds of thousands; the numbers vary considerably, depending on the news outlet) prolonging a war that Australia should have no part in. Australia has no way of tracking how that money is spent and the Ukrainian government has no formal obligations to do so. 

Ukraine continues to be shaken by corruption scandals. Last year $100 million was siphoned off the state’s electricity company Energoatom as its electricity grid faced collapse. In January 2023, Ukraine’s then infrastructure minister was dismissed following allegations that he misappropriated US$400,000 from the country’s winter assistance funds. 

A symbol of the fruitlessness of sending military aid to Ukraine is Australia’s armoured Bushmaster troop carriers that were sent to Ukraine. Of the 120 that were donated to Ukraine almost all of them have been destroyed or are waiting to be repaired. Some have been showcased on the streets of Moscow after being captured. One wonders how much more taxes will be wasted on this war, whose pockets the money will end up in and how many more lives will be lost. 

Beyond providing aid, Australia has imposed more than 1,400 sanctions in response to Russia’s invasion. These measures target individuals supporting Russia’s administrations in eastern Ukraine and Crimea, as well as entities operating in Russia’s defence, transport, and financial sectors. Thus, Australia is tied ever more into lockstep with imperialist powers of the global north. 

And insanely, this includes supporting genocide. The Australian government has just awarded a $917 million dollar weapons contract to Israeli company, Elbit Systems even though its technology had been stripped from Australian military equipment only three years ago due to data concerns. This new contract will equip Australia’s Korean designed Infantry Fighting Vehicles (IFV’s) with the latest electronic systems refined during the desolation of the Gaza Strip. Elbit is only one of many Israeli military contractors Australia does business with as well as Rafael Advanced Defence Systems. 

Australia is part of the Five Eyes intelligence network which provided battlefield intelligence to the Israeli invasion of the Gaza strip. Crucially, the ABC reported that more than 70 Australian companies have been involved in the production and supply of spare parts to Israel’s US-built F-35 fighter jets, with permits issued to those companies by the Department of Defence. Anthony Albanese has stated in parliament these are “non-lethal” parts – non-lethal parts (including bomb-bay doors) to very lethal weapons, that have mostly killed civilians. 

Neither Albanese nor foreign minister Penny Wong have ever acknowledged a genocide has been carried out in Palestine. In the early months of the war following the 7 October 2023 attacks, Australia voted against or abstained on several UN General Assembly ceasefire resolutions before later shifting towards a ceasefire. The Labor government continues to add insults to injury towards Palestinians, despite Israel killing or injuring at least 10% of the population of Gaza. 

Linking the Bondi attack on Jewish people gathered for Hanukkah to the protests against genocide show the moral bankruptcy not only of the ALP, but also of the ruling class who cannot fathom how ordinary people are so passionately opposed to war and want the genocide to end. Inviting Israeli president Isaac Herzog was not just plain ghoulish, but also hopelessly inept. Unleashing police onto protesters and allowing them to get away with acts of egregious brutality shows our political leaders are well and truly beyond being the second rate or mediocre types that Donald Horne described – they are just plain reprehensible; soulless, grey and inhuman, driven by exigencies that run directly counter to the needs of humanity. 

The desolation of Gaza was a demonstration and warning to the world of the destructive power of U.S imperialism, through its proxy, Israel. Its aim is to remain the sole global hegemon, even if that means a confrontation that results in WW3 and nuclear war. It’s hard to think of anything more insane than that, but its attempt to contain China demonstrate that is where we’re headed.

High risks

Australia’s reliance on Chinese markets whilst simultaneously aligning itself with U.S imperialism creates an insoluble contradiction. Australia’s trading relationship with China is of mutual benefit to both parties (even if the terms of trade are in Australia’s favour in the form of cheap consumer products). The logic of empire, of Pax Americana is to contain its rivals and push to a confrontation that drains them of blood and treasure so it can finally hold them in subjection. But such a trajectory will fracture the political landscape of Australia, because there is simply too much at stake. 

The decline of Australia could then become precipitous. It has up till now, for the last forty years been a managed and devised decline. Migration, used to sustain economic growth and once described as a success story is now a flashpoint for a revanchist right that is gaining ground. No one should be fooled by the ALP’s electoral majority, even if they scrape in for another term; this is built on fragility and not the stability or dynamism of any sort of programmatic reform. 

A great part of Australia’s wealth is built on asset inflation – a global shock could crash the housing market and lead to economic collapse. Both major parties have used the politics of culture-wars, which are front and centre stage to displace any genuine discussion around economic problems – overall this has favoured the right because the culture wars feed off cynicism and despair and also because the ALP has only made symbolic gestures towards dealing with long term structural disadvantages. The Murdoch media have successfully manipulated the agenda and framing of how contested cultural issues are presented.

Australia’s major parties are incapable of confronting the crises ahead because they remain bound to the capitalist system that created them. But the future is not predetermined. A revival of socialist politics and mass struggle could chart a different course. Breaking from the empire would open the possibility of national renewal: rebuilding industrial and technological capacity, learning from partners such as China, decommodifying housing, restoring public ownership of essential services and introducing democratic economic planning. This would require not only leaving military alliances, but also breaking with the dogma of the free market and finally burying the neoliberal era. 

Every step forward contains higher risks, but there is no going back to the age of the “lucky country”.