You probably would have noticed the media attention given to the Australian economies historic 26 year reign of economic growth which has been claimed is breaking that held by the Netherlands. Apart from being incorrect, (The Netherlands’ real GDP declined by 0.3% in the June quarter of 2003, and by 0.01% in the September quarter of that year) that record should go to Japan. In fact, if Japanese GDP data were available on a quarterly basis earlier than 1960, it’s likely that this run of continuous economic growth would have been even longer, perhaps as long as 38 years, inferring from annual data available back to 1955. Not bad for a nation mocked for its decision to abandon population growth and actually reduce its population.
Our current reliance on GDP as an economic indicator harkens back to a war-time measure where it was considered necessary to measure production (of war material) in order to fight the war. After the war finished it seems logical to continue to use GDP in order to create the materials necessary to repair shattered infrastructure, a situation that is no longer logical when we should be caring for the economic casualties of this process.
The weakness of GDP as an indicator has been pointed out by many, none better than US senator Robert Kennedy who said "GDP measures everything but tells us nothing," and it certainly does not show growth was achieved or even if it was beneficial. Switching to non-sustainable resource dependency was certainly not to our long term benefit and while the total value of goods and services has increased due to population increases so has income inequality, poverty, homelessness, mortgage stress and many more unpleasantness including government corruption. Perhaps more importantly all this growth in GDP came at the expense of a government debt of $551b and a household of about $2t - the third highest in the world - leaving us vulnerable to a housing bubble implosion. Then there has also been a welter of public asset sales - now called recycling - often used for re-occurring expenses just to keep governments functioning. Many of these sales, like our gold reserves that were flogged off by Peter Costello or the GPO which went for a paltry $150m, indicate that we are not getting good value for our assets, despite the $3.5b that went to financial advisers in order to facilitate these sales.
Scarcely a recommendation for good governance.