A future economy

Over the past 120 years ago the have been an average of 114 million sheep grazing on Australia paddocks producing wool and meat for export. In 1970 the numbers peaked at 180 million. Today there are still 72 million sheep but there are also mines making Australia the 2nd biggest global producer of iron ore and 4th biggest producer of coal. Australia the country has done very nicely out of the natural resources of the world’s largest island.

In time the Australian economy will need to make money from something other than natural resources. This is a significant reality for a society that was created on the back of the sheep and now rides high on coal trucks and ships laden with iron ore.

“No worries, mate,” some say. There is plenty of time. There will be generations of demand for those salable mineral resources from the 4 billion people who still don’t have a washing machine but would dearly like one.

Plus we could always go back to sheep. For soon there will be 10 billion humans to be fed and we have all that wet and wonderful land in the north to turn into a food basket.

I joke not. The latter idea is under serious consideration by the right leaning Federal opposition party. Equally there are those who would see remaining forests in the east paved to provide the living space for 100 million.

And maybe that is enough. There could be another 100 years of wealth in natural resources grown on and dug up from the land and immigration to provide local customers who will buy houses, white goods and visit air-conditioned shopping malls.

But I would think we need something else; at least a couple of alternative sources of external income. Not least because there will be a need to find something for everyone to do. Else the nation becomes a handful of miners and hi-tech farmers supported by millions of shopkeepers (or, more likely, couriers for online stores) and civil servants. And not everyone can be those; and already 3 out of 4 Australians in the workforce are paid for delivering a service of one sort or another.

So what would the else be?

Presumably something that the people are good at, have an aptitude for, and makes sense economically. Sport perhaps.

Commentators in the US have asked the same question of their nation. One of their answers is for the US to drive the technology revolution needed to shift our energy supply away from fossil fuels. They have capital, smarts, institutions, and the all-important entrepreneurial spirit. That they are being left behind in this by China and Germany also supplies plenty of motivation.

Australia lacks the scale of entrepreneurial spirit and risk capital to make innovation become a serious earner. Sole trading we can do, but a desire to build empires from small beginnings is rare. Consequently, the risk capital that runs at close to 10% of commercial investment in the US barely makes it to 0.1% in Australia. This lack of support requires that most innovators with a big vision must find what they need overseas.

So what does Australia have? What it has always had; abundant natural resources.

It makes sense to use the vast landmass, the myriad animals and plants, the minerals in the earth and become a regional, even global, breadbasket. Not least because Australia does have smarts, capital, infrastructure and the experience to overcome the significant practicalities that such a mission presents.

Only water, nutrients and labour are in short supply. Land must be managed carefully to avoid soil degradation and salinity. There has to be a careful eye on the changing weather and an ability to drought proof agricultural production.

Australia has a well-developed system of regional natural resource management, generations of farming experience, research and innovation capacity, a world-class tertiary education system and an emerging culture of prudent agriculture epitomized by the Landcare movement. It has what it takes.

This is not a proposal for turning the tropical savannas into laser leveled rice paddies, at least not everywhere, or to continue with meandering livestock left to their own devices and rounded up once in a while for market. This is a call for a radical change to agriculture that will make it into a smart, sustainable production system that accounts all production costs and harmonises output to the capacity of the landscape. In short, to create a totally new way that requires the engagement of everyone.

Why not do it? Create a robust economy on sustainable use of natural resources.

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