It’s official, Australia is a banana republic (Banana republic is a political science term for a politically unstable country whose economy is largely dependent on the export of a single limited-resource product, such as bananas) – Or in our case minerals.
In an incredibly ironic turn of events, Julia Gillard got axed as Prime Minister by the very man she back stabbed to gain the position in the first place only a few years ago. Why did this happen? Because the party was so terribly unpopular that they had to go back to the previous guy, who was only removed because at the time he was so terribly unpopular…
Both the major political parties in Australia are as equally incompetent as each other, with the main 3rd choice (the greens) being at best considered extremists. Then you have the other available parties, which mainly comprise of certain interest groups that lack the needed policy robustness to govern a country. There really is no good options. I mean we are really scraping the bottom of the barrel over here…
The really scary thing is that the majority of the citizens of Australia don’t even see the problem. Most are too dimwitted and narrow-minded (not to mention racist & lethargic) in their political stalwartness to even consider voting based on party policies. Instead, voting in Australia has become a battle of the leaders, where a person needs only look at the attractiveness of the various party leaders to see which way they are voting, thus making party policies irrelevant.
I feel a little sorry for whoever it is that wins the upcoming election, as they will be handed an economic poisoned chalice. You see in Australia over 50% of our exports come from Iron Ore (23% share), Coal (15% share), Gas (6% share) and Gold (7% share). Most of those resources go to China, Japan and other Asian nations, and most of them have drastically reduced in price over the last few years. Mines are shutting or reducing in size all over the country and there isn’t much in the way of industry to take its place.
New housing starts are weak, tourism isn’t even close to what it used to be (thanks to a high Aussie Dollar) and manufacturing is continually contracting. This spells terrible news for Australia over the coming years with higher unemployment being almost a certainty. The only way I can see the government continuing to be able to afford its current spending regime is to either borrow more money, or to increase taxes. Although increasing taxes is never popular amongst the voters, and with Australia having some of the highest tax rates in the western world (not even including the GST or excises on things like fuel, alcohol and cigarettes) and some of the highest costs of living in the world, I can’t see that as being a palatable option.
All of this leads me to the conclusion that Australia is very much a banana republic with limited positive future economic and political prospects.