I agree generally with Saul's synopsis here.

However, it's all good and well to save for the future, but we need to spend for the future too. I would rather see money spent now on strengthening manufacturing and other industries (through infrastructure development, R&D investment etc) for future viability, rather than save it for patching these industries up later when/if resources falls over.

This is what we failed to see under Howard/Costello, who saw the political expediency of putting up consecutive Budget surpluses as being more important than long term structural reinforcement during boom years. Now we have a global economic downturn supressing the Government's ability to do what it should have been doing for the previous 10-15 years.

Further, by criticising the Labor government's stimulus package following the GFC, is Saul suggesting we go back to the old orthodox thinking that led to the Great Depression? It is accepted economic prudence to increase Government expenditure to stimulate the economy to avoid recession. Howard did the same thing during the Asian economic crisis of the 90s after all.

Thought provoking article Saul. Agree with your comments Taswegian.

Re taxing of mining I wonder why we don't have an open and honest debate on taxing the carbon emissions of trade exposed energy intensive industries such as mining and mineral processing. Under the pending legislation they will get 66-95% of their emissions free while the domestic industries have to pay. This means over 20% of emissions under the scheme go untaxed; that additional burden falls on domestic industry and power generation which will pay higher carbon prices to get the additional cuts to compensate the mining / resources' inefficiencies.

It is assumed that because such industries in other countries don't have to pay, our mines would be at a competetive disadvantage and this is reason enough for exemption.

OK so let's look at the real impost: Take a very energy intensive industry such as a gold mine, with about 25% of costs being energy, mainly diesel. A $23 carbon price on diesel means about a 6% increase. So their costs will go up .06*.25 or 1.5%. Given that their profits are 15-30% they could easily afford this.

I would assert that Australia is unique in the world in being able to afford such a tax and I think we should do it. If we don't, there is little incentive for these industries to reduce their emissions from current and planned operations; that burden will fall more to domestic industry who do pay the tax.

In WA our emissions will treble by 2050 if all planned resource extraction projects (which will be 66-95% exempt frm C price)proceed . How then would we as a nation meet a 5% reduction target? I think the resources extraction industries could do with a 'dampener' and levying the full carbon price on all their emissions is the best way to do it, even if we are the first country in the world to do so.

The economic reality is this; the US Federal Reserve since 2008 has created $ trillions to prop up the derivative bubble.Much of the share market and super funds are tied up in this lie.In addition to this,our super funds have admitted to buying US Govt bonds who in all reality have no way of repaying the $14 trillion debt which Obama has now increased by $2 trillion.

WE ARE LOOKING AT THE GREATEST ECONOMIC COLLAPSE IN ALL HISTORY IF WE DO NOT WAKE UP AND SEE WHO THE REAL CRIMINALS ARE.THIS WILL RESULT IN HUMAN SUFFERING NEVER RECORDED IN PAST OR OUR RECENT HISTORY.THE DEBT CANNOT BE REPAID BECAUSE IT IS FRAUDENT DEBT CREATED BY BANKSTERS IN THEIR COMPUTERS.

The hypocrisy of the Australian elite is revealed at any event in which ‘Aboriginal cultural Identity’ is said to be celebrated.

You, few remaining Aborigine, are not alone to get saddened

With you, hurt and insulted are the Australian men and women of good will.

In the precept “Ora et labora”, ‘ora’ stands for ‘prayer’, the humble expression of hope for a better world.

There is no humility in the Oration of Saul Eslake, only arrogance; the “I know better than thou” refrain common among Idiots.

Remember the Australian wool export industry that once supplied the nation with revenue?
Politicians and economists and the FIRB have also watched as Australia's beef export industry has been allowed to fall under foreign ownership and control, international profit shifting and all.
The Australia fishing industry is another, now maybe $2 billion in mainly finned fish product imported annually due to local inability to supply demand.
Don't let them trick you with response there is over $2 billion in fish exports because that is mainly high value lobster, abalone, pearls, high value aquculture product, and virtually no wild finned fish.
During the Great Depression many people survived of community fish and vegetable barter, not next time. Big consequences looming

For every million made trading shares, buying and selling houses or banking, someone somewhere must create that million in real work.
Real wealth does not come from nowhere, it usually involves work, innovation and adding value to existing assets.
Wealth derived from inflating assets (due to money loaned into existence) or parasitic industries such as banking and trading are effectively taxes on the real productive economy. When the parasitical sectors outgrow the real economy's capacity to support them, the rest of us "feel the pain" regardless of our own productivity.
While much of the economy is involved in acquiring wealth without creating it we have a problem!
Yes, we should tax wealth creation activities less than wealth gathering activities. We should also avoid the Nauru situation where we sell off the nations's wealth ASAP for the lowest price.
First: sustainability in housing, food, water for all. Then...free trade, futures and other financial instruments. Lets stop the financial tail wagging the productive dog.