Diggers to the rescue!

Who needs boring old Europe, anyway? Now we've got our country back and set the clock back to the jolly old days of empire, the colonies will save us! Look over there, Australia wants a free trade deal!

Britain's new headmistress called the news from Down Under a "very encouraging" demonstration of how leaving the European Union will work out splendidly for Britain.

And I'm sure it will. After all, who wouldn't want to swap a market of 440 million people, located right on Britain's doorstep for one of just 24 million, living almost as far away as it's possible to go without actually leaving the planet? And isn't Australia a dynamic, growing economy? Yes, it is ... sort of:

The national accounts published last Wednesday showed GDP growth of 3.2 per cent over the year to March – the highest since 2012, and among the highest of all ‘developed’ countries.

Those same national accounts, however, revealed that gross national income (GNI) had not moved over the year.

The main reason for the divergence between GDP and GNI is that recent GDP growth has come mainly from commodity exports – iron ore and liquified natural gas – at depressed prices (particularly for iron ore).

As resource companies’ earn income from exports, much of that income goes out again in the form of dividends to foreign investors and payments to foreign suppliers. Also, once these companies are fully operational, the domestic economic benefits of wages and contracts are far less than we had enjoyed in the investment phase.

Such is the cost of our “open for business” dependence on foreign capital to finance a mining boom ...

... The resources boom is over, and any recovery in resource prices will probably be minor. Thermal coal prices are almost certainly in long-term decline, as the world adjusts to climate change, and as less polluting sources of energy are developed...

...Had this foreign capital been directed to long-term wealth creation, our situation would not be so dire. But it has gone to finance extractive industries, with a legacy of holes in the ground, and to finance housing inflation.

"What's that Skippy? The poms are trapped down that big hole they dug themselves? Let's go and rescue them, Skip!"

"What's that now, Skippy? We're trapped in a big hole in the ground, too? Oh jeez, who's going to save us? Hello, is anybody there? Lassie? Flipper? Anybody!?"