Australia must be able to pay its way and encourage those prepared to take risks: Ross Greenwood

The Reserve Bank board must harbour some small concern that despite record low interest rates, Australia’s economy is not responding quickly.

It is not creating the a sharp turn-around in consumer or business confidence.

In fact, in the face of rates being cut to record lows, Australian consumer confidence fell.

That said, it was measured just after the federal budget, and there weren’t many smiles in that.

Yes, I understand that auction clearance rates in Sydney have topped 80% in the past couple of weekends. I know that Melbourne is showing signs of recovery. But Queensland’s ongoing malaise, caused by a massive fall in coal prices and the property market continuing to lie flat on its back gives cause for concern.

Again, what happens if you cut rates but nothing (or not enough) happens? The dollar’s fall will do more to stimulate Australia’s economy – especially the rural and the manufacturing sector.

Yet though the government will consistently blame the dollar for all the recent travails in the economy, it will not face up to the fact that the horse has bolted.

Manufacturers have left the country and those that haven’t already are heading there as quickly as possible. And this is where the government has been too slow to respond. This is where the sliver of a majority has worked against the Australian people and the Australian economy.

If we had our time over again, the better solution would have been for Australia to go back to the polls in 2010 to get a decisive majority for either political party.

In the past three years – despite hectic legislation – it is hard to conclude that Australia has done anything other than wallow.

Gross National Expenditure is running around 1%, which shows it is the import/export side of the equation that is still holding up growth. That said, as Treasury Secretary Martin Parkinson said this week, there is some stupidity in looking at the numbers. To suggest that WA is in recession was just plain dumb.

The problem is that WA – like Australia – is a big place and what households are feeling in Perth is vastly different from Port Hedland or Paraburdoo. What Australia needs - and I think the public is up for it – is big fundamental change: to the tax system, state and federal relations and to the way social welfare is paid.

I understand in saying this that the white noise will be immense as individual groups win or lose from such changes. But for Australia’s productive future, change has to occur.

The nation has to be able to pay its way. But even more, if must give incentive to those prepared to take risks, in order to create more wealth in the future.

The feeling I get right now – from all parts of Australia – is that the nation has squandered the mining boom.

And now that its best days appear to be behind us, the big question is whether Australia can make hard decisions to better profit from its tail. And that does not mean handouts, it means acknowledging the concept of being paid for a hard-day's work and not being taxed too heavily for the privilege.

Ross Greenwood  is the finance reporter for Today presenting his “Money Minute”segment daily at 6.50 and 7.50am and Nine News and presents Money News nightly on 2GB. He has been the editor of numerous business publications, including Personal Investor between 1986 and 1997.