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Western Australia would have the third highest level of economic freedom in the world after Hong Kong and Singapore if it were an independent nation, said Fred McMahon, Michael Walker Chair of Economic Freedom Research in Canada's Fraser Institute, at a Mannkal Economic Education Foundation event Thursday.
Global fact-based research has shown that economic freedom is the world's greatest generator of prosperity. "Economic freedom is the reason Western Australia has created such a high standard of living while many resource-based economies flounder," Mr McMahon said. The Fraser Institute produces the world's most respected and comprehensive measure of economic freedom.
However, Mr McMahon warned of complacency which could imperil Western Australia's prosperity in light of new and great challenges, with commodity prices are likely to remain weak and thus unable to bail Western Australia out of future difficulties. Petrochemical prices and demand are also unlikely to recover to boom levels.
Other global challenges include uncertainty over the world economy, including Europe, but the economic trajectory of China is the most important for Australia and commodity prices.
Complacency caused by the boom in commodity prices has allowed a number of flawed policies to be implemented or perpetuated and economically dangerous situations to develop, including labour market barriers, deficits and poorly-directed spending and potential housing market problems.
Mr McMahon recommended Mannkal's Project Western Australia by John Hyde and Andrew Pickford as an important guide to improving policy.
Paul McCarthy, CEO of Mannkal stated, "The launch of the Economic Freedom of the World Index in Perth is one of Mannkal's major public policy initiatives this year and we are pleased that Mr McMahon accepted our invitation to visit Perth and learn first-hand about the opportunities and challenges Western Australia faces."
To access this year's Economic Freedom of the World Index, please click here.
Paul McCarthy
CEO
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