Lowy Institute Poll 2024 Report

Economy and trade

Economic optimism

In the past, Australians’ sense of economic optimism has proven resilient, even remaining buoyant during the 2008 global financial crisis. But the pandemic changed that, plunging overall economic optimism in 2020 to the lowest point (52%) in the Lowy Institute Poll’s history.

In 2024, fears of a global recession have moderated, but the post-Covid global economic recovery has been slow. Growth in China remains lacklustre, inflation lingers in North America, and the economies of Europe remain sluggish, while wars in Ukraine and the Middle East have impacted supply chains and prices. In Australia, rising costs of living and interest rate increases over the past two years have put many households under financial pressure.

A majority of Australians (58%) still say they are either ‘optimistic’ (54%) or ‘very optimistic’ (4%) about Australia’s economic performance in the next five years. However, this represents a four-point drop in overall economic optimism, to the second-lowest level in the past two decades.

This moderate change masks a more significant generational divide in economic outlook. Overall economic optimism fell by 11 points on last year to 44% in the 18–29 age group, while optimism levels held steady among those aged over 45.

Free trade

Since the 1980s, successive Australian governments have followed a free market economic orthodoxy that largely relied on open trade and market forces to shape the economy. But in April 2024, after fieldwork for this Poll, the Albanese Labor government announced the Future Made in Australia agenda — an industrial policy that seeks to use government subsidies and support to achieve economic, national security, and decarbonisation objectives. This follows a number of major economies, including the United States, China, Japan, and Europe, providing significant subsidies to support domestic clean energy and advanced manufacturing industries.

Despite the global trend towards market intervention and in some cases protectionism, in Australia, free trade has strong majority support that continues to grow. Eight in ten Australians (80%) say free trade is good for their standard of living, similar to the last time this question was asked in 2022. More than three-quarters say free trade is good for the Australian economy (77%) and Australian companies (76%, up five points from 2022). Seven in ten Australians (71%) say free trade is good for creating jobs in Australia, up five points from 2022.

Nevertheless, views on the economy are complex. Longstanding support for free trade coincides with a vast majority of Australians (87%) also supporting the provision of subsidies for renewable technologies, and strong support (70%) in 2023 for the idea of friendshoring (‘ensuring supply chains run through countries that are friendly towards Australia’).

Artificial intelligence

With the advent of more advanced and accessible generative artificial intelligence, or AI, in the past two years, there has also been an explosion of debate about the risks, benefits, and role of AI in the world.

For the first time, the Lowy Institute Poll asked Australians how they perceive the risks versus the benefits of AI. On balance, a slightly larger number of Australians say the potential risks of AI outweigh the potential benefits (52%) compared to those who say the benefits outweigh the risks (45%).

Younger Australians are more likely to be positively disposed to AI, with 55% of 18–29 year olds saying the benefits outweigh the risks, compared to 42% of 45–59 year olds, and only 36% of those aged 60 and over.