The Great Australian Boom
Our economy is booming. We must make the right decisions now to maximise the benefits Australia receives from it.
It is hoped that China and India continue to expand economically without hiccups, and the Australian government needs to do all it can to ensure we have a smooth transition to a future that is, essentially, unknown. Although unlikely, China's growth may be set back by a geopolitical event in the future, or a severe world recession might occur. We must be ever cognisant of this uncertainty, and make the right structural changes to our economy now, while we afford do, rather than leaving them until it's too late and they hurt too much to implement. If China does continue to grow smoothly, demanding more and more of our natural resources, then we will be in a better position to reap the benefits. It's a win-win return on investment.
Our tax system, despite a decade of tinkering on the edges, is more complicated than ever before. We should not force our companies to waste valuable, productive resources on trying to figure out -- or get around -- government regulations. The entire tax-welfare structure needs simplicity but flexibility. Australia has a highly progressive income tax scale, which brings us many social benefits, but it is currently structured in an unsustainable way. Effective marginal tax rates should never exceed 30 per cent for the less well of, and that number should be an upper bound that is never reached. Middle and upper class families should not be recipients of government money, such as home-buyer grants, private school funding, and the like. A fair go means a fair go, and this should be reflected in our tax-welfare system as simply as possible.
Employment is also a major concern. WorkChoices had a good intention in its desire to make labour markets more flexible, but it is still in need of refinement to ensure good, honest workers aren't being cheated by the system. Education and training also needs a lot more government attention, in terms of both design and funding. Western Australia might be the economic hot-spot right now, but if foreign demand for our resources tapers off, we need contingency plans. There is a case for governments to be more actively involved in restraining this boom to sustainable levels. This idea might attract criticism, but if it all comes tumbling down, it's government that's expected to pick up the pieces. Young Australians should be offered a senior high school education, but still given the option for trade-skills based training if they want it. Either way, a range of skills must be taught to help avoid high structural unemployment in a downturn.
The final concern should be the environment. Mining is great for the economy, but what are its impacts on our earth? We can only dig something up once. If it's coal, once it's burnt, it releases carbon into the atmosphere. If its iron ore, aluminum, copper, etc, the smelting process releases even more harmful gases, especially if done somewhere with low environmental standards, such as China. Our water resources are running dry, due to drought, poor management and overzealous irrigators, and these problems need to be fixed before it is too late.
There are many things that can be done to ensure Australia has strong but steady prosperity growth over time. Some of these things may be difficult, but they are necessary, and should be done now while they are most affordable.
It is hoped that China and India continue to expand economically without hiccups, and the Australian government needs to do all it can to ensure we have a smooth transition to a future that is, essentially, unknown. Although unlikely, China's growth may be set back by a geopolitical event in the future, or a severe world recession might occur. We must be ever cognisant of this uncertainty, and make the right structural changes to our economy now, while we afford do, rather than leaving them until it's too late and they hurt too much to implement. If China does continue to grow smoothly, demanding more and more of our natural resources, then we will be in a better position to reap the benefits. It's a win-win return on investment.
Our tax system, despite a decade of tinkering on the edges, is more complicated than ever before. We should not force our companies to waste valuable, productive resources on trying to figure out -- or get around -- government regulations. The entire tax-welfare structure needs simplicity but flexibility. Australia has a highly progressive income tax scale, which brings us many social benefits, but it is currently structured in an unsustainable way. Effective marginal tax rates should never exceed 30 per cent for the less well of, and that number should be an upper bound that is never reached. Middle and upper class families should not be recipients of government money, such as home-buyer grants, private school funding, and the like. A fair go means a fair go, and this should be reflected in our tax-welfare system as simply as possible.
Employment is also a major concern. WorkChoices had a good intention in its desire to make labour markets more flexible, but it is still in need of refinement to ensure good, honest workers aren't being cheated by the system. Education and training also needs a lot more government attention, in terms of both design and funding. Western Australia might be the economic hot-spot right now, but if foreign demand for our resources tapers off, we need contingency plans. There is a case for governments to be more actively involved in restraining this boom to sustainable levels. This idea might attract criticism, but if it all comes tumbling down, it's government that's expected to pick up the pieces. Young Australians should be offered a senior high school education, but still given the option for trade-skills based training if they want it. Either way, a range of skills must be taught to help avoid high structural unemployment in a downturn.
The final concern should be the environment. Mining is great for the economy, but what are its impacts on our earth? We can only dig something up once. If it's coal, once it's burnt, it releases carbon into the atmosphere. If its iron ore, aluminum, copper, etc, the smelting process releases even more harmful gases, especially if done somewhere with low environmental standards, such as China. Our water resources are running dry, due to drought, poor management and overzealous irrigators, and these problems need to be fixed before it is too late.
There are many things that can be done to ensure Australia has strong but steady prosperity growth over time. Some of these things may be difficult, but they are necessary, and should be done now while they are most affordable.