Australia’s 25^th Prime Minister, the Hon. John Howard, spoke at the World Business Forum about how political contexts shape economic climates, sharing his optimistic outlook for Australia and the US and the challenges ahead for China.

Australia weathered the global financial crisis well but we must continue to pursue economic reform.

Economic reform is a constantly receding finishing line, but if you stop running others will surge past. We face in the near future some expenditure challenges – we need to take action now.

Economic decision-making should always be put into a political context.

The art of government is to find the right balance between good politics and good policy. If you only worry about politics when you get in and not policy you don’t deserve to remain in office. But if you only worry about policy you won’t remain in office very long.

I am a supreme optimist about the preeminent place of the US economically and militarily.

The US economy is recovering in fits and starts but overwhelmingly it is recovering. Its greatest strength is that it is less regulated so has a greater capacity to recover.

China has stabilised but faces some key challenges that may impact Australia’s and the world economy.

We need a political context for the economic benefits China represents. Its ageing population means there will be pressure to divert resources towards looking after this population. The other significant political challenge will be managing the first generation that has only known affluence and will demand a say in the way their lives are lived.

My outlook for Australia is also optimistic

The equally important conjunction of our resources endowment and the demands of China and other Asian nations are why Australia has continued to do better than most others. Australia is overwhelmingly more fortunate than most other societies but we do need to recover our enthusiasm for economic change and reform.

Our resources sector remains very significant but we shouldn’t be shy of talking positively about the role of the services sector. There’s no reason why service industries such as education cannot very successfully export.

Read more insights from the 2014 World Business Forum keynote speakers.  http://business.nab.com.au/tag/world-business-forum/>

NAB was recently privileged to sponsor the World Business Forum in Sydney – two days of inspiration, collaboration and provocation by some of the world’s leading business innovators. These insights were generated live on the day by NAB and were informed by the guest speakers’ presentations.