The Lucky Country is at it again in coming out on top of the world, according to Glenn Stevens, governor of the Reserve Bank of Australia (RBA).

In an address to the Senate Economics References Committee in Sydney, Mr Stevens found plenty to crow about, assuming his audience could hear him above the cacophony of victims choking to death in the city’s signature red dust storms.

Mr Stevens claimed Australia had suffered not so much a recession as a “mild downturn” in the aftermath of the global financial crisis, much less damage, in fact, than had been incurred in the economic crises of the mid 1970s, early 1980s, and early 1990s.

He noted with satisfaction that the Australian economy had enjoyed a small expansion in gross domestic product (GDP) over the four quarters to June of this year, whereas the G7 economies had undergone a cumulative five percent contraction in real GDP over the same period.

Somehow avoiding laying on the smugness too thick, Mr Stevens ventured, “So I think it is reasonable to conclude, against the benchmarks of historical and international experience, that Australia has done quite well on this occasion.”

What, he continued, could explain Australia’s good fortune?

Several things, actually.

First up, Australia’s banks were in a better position than those of G7 countries: they had far fewer junk loans and toxic structured debt securities on their books, and managed to keep making profits rather than racking up crippling losses.

All this was done despite encountering tighter credit and higher interest spreads in international capital markets, and of course the heroic RBA was right in there behind them with an expanded balance sheet, while the Ozzie government rolled out guarantees for wholesale funding.

A fair suck of the sav was had by Australia’s banks, then.

Here in New Zealand, these same Ozzie banks have taken a beating from political populists and Kiwi-owned competitors for being dirty diggers and greedy gougers, but as much as some would be reluctant to admit it, these institutions kept pumping in capital to support their New Zealand operations, which must have had something to do with why our country didn’t go down the tubes like so many others.

If ever proof was needed that New Zealand is plugged into Australia’s economic life support system, it must surely be the way in which Ozzie banks played a part in our country avoiding near downfall.

A little gratitude might be in order, then, but not too much as otherwise it goes to people’s heads over the ditch.

Second, Australia’s role as the world’s quarry with a beachfront saw it through the bad patch, especially thanks to an insatiable customer in China.

After a wobble in the second half of 2008, China’s growth rebounded and was predicted by Mr Stevens to hit its target 8% this year with ease.

To top that off, Australia’s other Asian trading partners are in recovery.

It brought evident pleasure to Mr Stevens that when the rot sets in to the Australian domestic economy, the ready solution is to dig up more of the back garden and ship it overseas.

This underground strength of the Australian economy might give heart to those over here who want to start mining conservation lands, but not too much, we might hope.

Third, and by no means least, was the gobsmackingly brilliant performance of the RBA and its sidekick the Ozzie federal government.

The Commonwealth had done its part by socking away a surplus and so was in good stead to fund the government’s fiscal stimulus lollyscramble.

The RBA went one better, Mr Stevens continued modestly: “In addition, monetary policy could be eased significantly, without taking interest rates to zero or engaging in the highly unconventional policies that have been necessary in some other countries.”

Well, we know which other countries Mr Stevens was too discreet to mention and it goes to his credit as a diplomatic central banker that at his moment of supreme triumph its was enough to hint and say no more.

Mr Stevens was not without naysayers dogging the often friendless path he piloted through the trackless desert wastes of global economic catastrophe.

“I have maintained throughout that Australia’s medium-term prospects remained good and that we should not lose confidence,” he averred, barely betraying the temptations to despair of faith he must have faced as the central banking equivalent of St Anthony the Great.

Fortunately, believers have since multiplied, such that Mr Stevens could observe, “More people seem to be taking that same view.”

Yes, Australians are feeling as cheery as galahs again: business and consumer confidence is up, as are the sharemarket and residential property, although commercial property remains a bit of a black spot.

And why? Because they started to listen to Mr Stevens.

To rub the point in, in case anyone could possibly have missed it, Mr Stevens went on to say, “A straightforward reading of the economic outcomes would suggest that the various policy measures have been effective in supporting demand.”

An old adage goes that if you don’t blow your own trumpet, no one else will do it for you, and Mr Stevens must be a veritable Wynton Marsalis of the central banking fraternity.

So where to next for this luckiest of countries?

The fiscal stimulus measures were designed to be self unwinding and according to Mr Stevens their peak effects on demand are probably already past, with some tapering off still to be felt next year.

The federal government is committed to moving back into balance and then surplus over the medium term.

The RBA will soldier on as before, whacking up “unusually low” interest rates when it sees fit, a cinch by Mr Stevens’s breezy description: “On the monetary side, the inflation targeting framework the Reserve Bank has been following for a decade and a half will guide adjustments to interest rates.”

“These will be timely and ahead of a build-up of imbalances that would occur if interest rates were kept low for too long.”

Australians needn’t dent their newfound confidence fretting about their country’s exit strategy from emergency policy measures then; the RBA is on the case and won’t make the foolish mistake of hiking interest rates prematurely as is feared of those other central banks who shall remain nameless.

Our government’s productivity taskforce, vexed by weighty questions as to how New Zealand is ever to catch up with Australia’s standard of living, might look to Mr Steven’s speech to discover the missing X-factor.

What we need to develop in this country, it would seem, is an ego as big as the Great Southern Land and the rest then falls smoothly into place.