Yes, a jobs crisis is building

As a separate but related issue, global industry has been consolidating for three decades and now mega-firms control production, working on a huge scale. This produces better and cheaper products but it also explains why it is no longer possible for Australia to make cars and other items. These are real changes. They are facts that can't be overcome with ideological devotion.

The reason the US and Europe are deep in debt is because they have tried to borrow their way out of this global reality as if it was a temporary phenomenon. The mining boom saved Australia for a while but now we are on the same track. Illusions can sustain people for quite a while but reality always wins in the end. The old world is not coming back.

There are three basic sets of actions we can undertake to minimize the impact of these global forces. One is to plan for them and use our natural advantages as best we can. The US bans export of gas to preserve its huge advantage in cheap energy for its own industry, not just global shareholders. We will probably be the last coal exporting nation on earth and have strong positions in gas and a variety of minerals but our only long term minerals and energy policy is to flog it all off as quickly as possible for the maximum short term advantage of global shareholders. The WA Government is an exception and deserves credit.

The second is to accept that government must lead in the transition to a new economy, particularly where returns on capital will be too long-term and risky for large private sector commitment. All those government companies I helped sell had been part of the nation moving into new industries where the private sector refused to go, or tried and failed (mostly due to the huge size and small population of Australia). When they were well established it made sense to sell them. Australia benefited from the fact that early progress in so many industries was not left to the market.

Now we need companies to bring small nuclear power plants to remote locations, we need to establish new ways of powering cars, such as hydrogen filling stations (the cars are ready to go), we need fast trains that don't use oil, we need a flying and underwater drone industry, and we will need industries that have not been invented yet. We should get over our ideological aversion to government action and let government lead, where that is required, with the intention of privatising such companies when a profit and a competitive environment can be assured.

The third focus must be a new social contract that shares the inevitable problems and compensates people for the sacrifices they make, where that is possible. This process can only be driven by government. It is complex and long-term. Blaming the unions and trying to fix all economic problems by driving down wages and conditions will not be sufficient. There is a lot of budget cutting to be done and most of it should hurt Liberal and National Party voters. The previous ALP government completely failed in this task as it enthusiastically created more ways to hand out money the government did not have.

Australia has a lot of strengths and the future can still be bright. New jobs can be created to replace those that must go. But only if we start dealing with reality and give up explaining away all problems by going back into history or into simplistic theory.

Unfortunately the Australian media and think tanks are busy recycling the dogmas they picked up in their economic degrees so long ago. The only alternatives are self-righteous green lefties with no idea.

Only politics can solve the problem, as it was meant to do. The sad part is that the Government is acting as if we were still in the 1980s, while the opposition is still wedded to token gestures, confected outrage and an absolute refusal to create any serious policy and argue it with the Australian people. The Greens are not worth mentioning.

There is an old saying, "Cometh the hour, cometh the man". So where is he, or she?