The government cant control private spending and debt levels, nor should it (apart from the obvious, more taxes). People need to be free to make their own choices.

The biggest skills shortages happen around resource booms. I've lived in a couple of towns when a mining frenzy hit, and local businesses lose all their staff to the mine. They cant compete with the money being offered by the mine, and being in rural areas, cant just attract more workers from the next suburb. $30,000 a year for welding at the local engineering firm just cant compete with $90,000 for the same job at the mine. Those that do stick with their employers in the interests of longer term job security, are often forced out of the housing market (if renting), as the spending power of others rises substantially, landlords raise their rents. Young families have zero chance of affording even the worst quality house.

The Australian economy, to a large degree, much is presently dependant upon the export of raw materials into the industrial furnace of China. Having said that, you would have to also consider that the Australian economy is part and parcel of the world economy and therefor subject to all its gyrations. All the economies today are linked in a thousand ways. As a general remark, these gyrations are manifested as a crisis or collapse in the national market. One major factor is a crisis of oversupply and a lack of customers. Fords, G.M. and Chrysler have had oversupply problems and sacked about 100,000 workers since 2001. Then we have the national interests, every nation becoming more competitive and more productive. And the end of that road leads to trade war and shooting war - each against all.

One gigantic problem is the enormous amount of debt the U.S. holds and is on the increase! It was not that long ago that the U.S. was transformed in a very short space of time from the worlds largest creditor to the worlds largest debtor. That has global implications. The boom went 25 years ago and there has been no recovery since then

"for other more innovative countries to value add to them and make a larger profit per ton of resource must be the most short sighted approach to building the wealth of a nation in history, given the talent available locally to value add."

I remind you that anyone is free to value add, if they think they
can make a profit and sell on the global market, like the rest of
us. If you have a great business plan to show that you can do it,
no doubt there will be plenty of investors.

Its not the Govt's job to run companies, they simply create a
suitable economic climate. Innovation etc, can then thrive.

Fact is we still have a pretty inflexible labour market. So
why should investors build factories here? In WA there are
plenty of jobs but no takers. Clearly people want a job a
few minutes from where they live and many aren't prepared to
move to find work.

Should it be of concern to the government that the foreign account deficit is at constant record levels? To create a more flexible labour market should we import workers at the lowest possible cost? Does the reserve bank though interest rates attempt to control private spending? Should everything be privatised roads, police, schools etc.? What should the government control? If a natural resource is valued at x today and 100x in a generations time should we dig it up now or later? Who owns the natural resources?

There are many questions and I do not propose to have the solutions, however I do not see the local or global benefit to use resources to produce consumer goods that value add to land fill. Y

Regarding interest rates to control consumer spending, the reserve bank raises interest rates to reduce consumer spending. People with a mortgage are affected straight away, renters a short time afterwards so these groups have a reduced ability spend. Now for the other group, those who are home owners with invested monies, this group has had an increase in the amount of money available to spend, in essence an increase in interest rate increases the wealth of the fortunate ( This group for the most part have worked hard, sometimes for generations to get there). I am talking about interest rates as a tool of spending control here and do not judge or begrudge anybody for there position on the wealth ladder.

I have thought for a long time that introducing tariffs, (and I am well aware that protectionism in the past has created profiteering, lazy local companies, eg. the local car industry) on imported products that are produced by slave or exploited labour or products that come from countries with lower production standards (environmental, WHS, building codes etc.). Even if the labour rates where equivalent between two countries, the country with the lesser standards will be cheaper and more attractive to produce in; these standards are controlled by government. It is not just higher labour costs that reduce the attractiveness of production in Australia.

I think it really is a deck of cards and that we have sold out our long-term economic future for short-term political gain.

I remember back at the start of Howard's reign when many international economies were realigning themselves for the future.

Some chose the high-tech, knowledge-based route (such as Ireland and India) and are now beginning to reap the rewards.Others invested in manufacturing and are also beginning to do well.

We chose a low-tech service based route and have to compete directly with our neighbours. Our neighbours however, are among the lowest cost manufacturers on the planet and we can't compete with them, as the outsourcing of labour and plants has shown.

We have taken a turn up a dead end alley and it's probably too late to go back.

It's been said that Australia is "a farm, a quarry and a nice place to visit" and not much else.

With the decline in manufacturing and erosion of working conditions we are going to become the poor white trash of the Pacific and will end up waiting on tourists when they come over here to buy up what's left of the country.

On top of this is the cult of privatising everything we can.The money raised didn't go toward improving the assetts that were sold as happens in non-government cases. Much of it as used for political pork-barrelling.

Over 4% of our GDP leaves the country as dividends to foreign investors and isn't reinvested in the economy. The Telstra sale will boost this significantly when the company inevitably becomes foreign owned.

"It's been said that Australia is "a farm, a quarry and a nice place to visit" and not much else."

If you stop and think why that is so, its because manufacturing
for so long was protected by high tarrifs, that it became lazy,
unefficient etc, in global terms. Mining and farming in Aus are
world leaders in global terms. But the sheep eventually collapsed
from all the weight, it can't afford to carry a lazy and expensive
manufacturing industry anymore, so we need to restructure, which
is what we are doing.

Look at the cars on our roads. They are not made in China.
20% are now locally made, the rest imported from Europe,
Japan, Korea etc, countries which have similar wage structures
as our own. But alot of them are smaller, more fuel efficient
cars, which consumers have voted for in a big way. Clearly
Ford and GM got it wrong, their problems in the US are exactly
the same.

The reserve bank focuses purely on inflation, as do reserve banks
around the world. If inflation goes up, interest rates go up,
that cools the economy down, brings inflation back down again.

Some high tech, innovative industry is developing and doing well.
We need more of it. Let China make the 4 $ shoes, consumers
benefit by lower prices. Consumers are the big winners when
it comes to global trade. What would your computer have cost you,
if it was Australian made? What about the cheap power tools that
you buy at Bunnings? etc. etc.

Fact is that we can't even fill the manufacturing jobs that are
available now, as many Aussies don't want to work on production
lines anymore, prefering a cushy job