Former prime minister Paul Keating says floating the Australian dollar 30 years ago was the right call for the nation’s economy.
The former Labor leader and treasurer on Thursday addressed a special federal caucus meeting to mark the years since Australia moved to a flexible exchange rate in December 1983.
The decision was controversial at the time, exposing exporters and importers to the strength and weakness of the Australian dollar as it was bought and sold across the world.
Holden’s US owners General Motors on Wednesday blamed the recent sustained strength of the dollar as a partial reason for its decision to close its Australian manufacturing plants in 2017.
Mr Keating said it was beyond doubt that it was right to float the local currency and pointed to more than two decades of growth in Australia, contained inflation and relatively low unemployment.
Australians now had the highest median wealth in the developed world – almost six times that of Americans.
“This is a vast change,” Mr Keating said in Canberra.
The policy not only marked Australia’s coming of age, but “the Labor party coming of age” as well.
“What I think we showed was you can run a peppy, high-growth economy, but have a good social wage at the same time,” he said.
“We made the changes and the model has worked.
“We’ve maintained low inflation with an unemployment rate under six per cent now for nearly a quarter a century – what else do have we got to do to prove the point?”
Opposition Leader Bill Shorten told caucus the decision to float the dollar signalled an end to the “inward-looking years” in the Australian economy and the start of a “modern, internationally proud and competitive economy”.