Page 461 - Week 02 - Wednesday, 21 February 2018
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The Australian economy puffing along nicely for so many years all of sudden appears to have faltered with the end of the mining boom coinciding with a collapse in wage growth and a rise in underemployment. Try as we might to use the same old engine to get things started again, we have not been able to shake off the economic malaise that has shrouded us nationally since the global financial crisis.
Can some of our state economies deliver the growth required to put some fire in the engine of the national economy again? On I read:
“Here comes a shiny new engine,” said the little clown. All the dolls and toys cried out together, “Please, Shiny New Engine, won’t you pull our train over the mountain?
“Our engine has broken down, and the boys and girls on the other side won’t have any toys to play with or good food to eat unless you help us.”
But the Shiny New Engine snorted: “I pull you? I am a Passenger Engine. My train has sleeping cars and a dining car with waiters to serve hungry people. I pull the likes of you? Indeed not!”
And off he steamed.
In my head I thought this was like relying on the property booms in the two biggest states—New South Wales and Victoria—to drive the national economy again. Neither state has been willing to take on the tax reform necessary to smooth out the boom, which over time has and will only serve to further the housing affordability issues already prevalent in major cities. I turned back to the story:
Soon the little clown called out, “Look! A great big strong engine is coming.”
“Please, oh, please, Big Engine,” cried all the dolls and toys. “Won’t you pull our train over the mountain?”
“I am a Freight Engine,” the Big Strong Engine bellowed. “I have just pulled a train with big heavy machines. I am a very important engine indeed. I won’t pull the likes of you!”
And the Big Engine puffed off.
The big engine reminded me of the mining states—too tired from pulling the national economy through the mining boom and so conscious of their economic status that they are now more focused on claiming a greater share of commonwealth funding than driving the next phase of economic growth. As the story says:
The little train and all the dolls and toys were very sad. “Cheer up,” said the little clown. “The Big Engine is not the only one in the world.
“Here comes another. He looks very old and tired, but our train is so little, perhaps he can help us.”
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