In an article in the Australian, Dennis Shanahan wrote:
THERE has been a radical change in the economic lexicon of the Gillard government, the economy is no longer a "two-speed economy" but a "patchwork economy". This alteration in political imagery and language marks a dramatic shift in Labor's approach to economic management and reform.
It is not a superficial or accidental change of language but reflects a fundamental change in emphasis in economic policy which has come from the turmoil of the past 18 months, which cost Kevin Rudd his job as prime minister.
I was interested in this comment because it bears upon something that I have been writing about for a number of years, something that is also relevant to my discussion on un and under employment.
By its very nature, the concept of the Australian economy is a statistical abstract, as are those of the various state economies. Just because there is a political boundary, just because we collect statistics based on those boundaries, does not of itself say anything about the validity - the meaning - of the resulting statistical constructs.
In the case of Australia, I have long argued that the way statistics are used acts to conceal variety to the sometimes detriment of policy making. In the case of NSW, I have gone further and argued that the progressive fragmentation of the state means that the very concept of a NSW economy has lost meaning. It now exists only in a statistical sense.
I think that it is quite clear that Australia is indeed a patchwork economy. The problem to my mind lies in properly understanding the implications of a "patchwork economy". Assuming that the concept is sound, what does it actually mean for public and especially economic policy? To what degree does it mandate changes in approach?
I think that the answers to these questions are unclear. However, at the very least, it is a useful reminder of the need to take variation into account, of the way that general policies play out in quite differential ways in different parts of the country depending upon on-ground conditions.