There are two countries that over the years have had a balanced budget and whose economies have been earmarked by saving both at a state and personal level: Australia and Singapore. 

On that basis, I believed that these two would weather the coming storm the best.Imagine my surprise when I read the other day that Kevin Rudd floated the idea that the ‘wealthy’ ought to pay 50% of their income in tax! In this case ‘wealthy’ would be defined as anyone earning A$1M or more p.a. There was some suggestion of increasing the rate for income earned above A$2M.I know what I’d do if I were living  in Australia and earning that sort of income if the suggestion became law – I’d leave. 

Nor does the madness stop there.A number of measures have been implemented to ’stimulate’ the economy.   Yet latest PPI was one of the largest in years showing that inflation is far from dead in Australia although the politicians act as though it were. Now, couple that with the lowest car sales in years and you have an economy showing signs of the stagflation I have been writing about.  

To come through the difficult times ahead Australia needs the kind of visionary policies that Hawke/Keating showed when the floated the exchange rate etc and Howard/Costello showed in managing the economy. If Australia returns to the socialist policies of yesteryear, it will needlessly have suffered more than necessary in the coming trials.