Murdoch: Australians Ill-Prepared for World Economy

Media magnate Rupert Murdoch said that Australians were poorly prepared to live in a global economy and may "learn the hard way" what it means.

AP Rupert Murdoch

Speaking amid the most severe economic downturn since the Great Depression of the 1930s, Murdoch cited the recent fluctuations in the value of the Australian dollar as evidence of Australia vulnerability to world markets.

The rise of China and India as economic superpowers, each with a new, vast and ambitious middle class, posed special challenges for Australia, and the country would need to adapt.

"Over the next 30 years or so, two or three billion people will join this new global middle class," Murdoch said at the Sydney Opera House. "The world has never seen this kind of advance before. These are people who have known deprivation.

"These are people who are intent on developing their skills, improving their lives and showing the world what they can do. And they live right in Australia's neighborhood."

The Aussie has lost 15 percent this month as investors unwound carry trades and dumped commodity currencies on expectations that a global recession would hurt demand for natural resources. Australia is a big exporter of commodities.

On Sunday, the Assistant Treasurer Chris Bowen said confidence globally should get a lift once the U.S. presidential election was out of the way on Tuesday, including in the Australian economy.

Australia has announced a set of measures to deal with the financial crisis, including a stimulus package for households and a government guarantee on local bank deposits, to shield them from the credit crisis.

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But Murdoch said Australia's "19th century education system" and the poor living conditions of much of its indigenous population were key hurdles to be overcome, Murdoch said, urging the country of his birth to recover its frontier spirit and position itself as a center of excellence.

"Australia is wedded to the world - mostly for richer, very occasionally for poorer, certainly for better, and only rarely for worse. And I fear that many Australians will learn the hard way what it means to be unprepared for the challenges that a global economy can bring."

Australians needed to become less dependent on government handouts and the country must remain open to immigration, he said.

Australia must tap on its advantages of an open, democratic and multi-racial society, built on the rule of law. 

"To compete well and use our human capital to the best, we will have to draw on these advantages and make our country stronger. That means being less dependent on government, less complacent about our national institutions, more willing to accept radical reform, and more trusting in our creativity and our competence.

The Australian-born media magnate, who now mainly lives in the United States but whose News Corporation still controls a large part of the Australian media, was giving the first of six lectures in a series known as the "Boyer Lectures".

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