Australia now faces four blindingly obvious national pitfalls which, if not met full on, will cause us to tumble into something resembling what Paul Keating called a banana republic.
Keating’s was a good wake-up call which worked at the time, and we need another one. The four pitfalls that need an urgent re-calibration are as follows.
Unsustainable international trade; a wobbly defence-security position; public-finance arrangements that fuel massive inequality and intergenerational unfairness; and out-of-control immigration.
Let’s outline the festering sores first.
International trade: At present Australia exports about $140 billion of low-grade iron ore; $80 billion in LNG; $40 billion worth of coal, three quarters of which is thermal coal used to generate electricity. Very little tax is paid, and foreign shareholders get most of the benefit. And we import $30 billion plus in refined fossil fuel.
Long-term this is disastrous. As the world realises that there is a sun in the sky that delivers energy free, our coal will become worthless. As the world, ever steel-dependent and energy-aware, realises that low-grade iron ore is not worth the transport costs of importing it, we will have to work out a way to refine it here: use it or lose it.
Importing $30 billion worth of fuel is silly when we have the technology and the roof and ground space to generate all the power needed to drive vehicles without any fuel. This transition should happen as quickly as possible.
Defence-security: Australia has always been on the apron strings of Britain or the US. As Britain withdrew to its own in 1942 after the fall of Singapore, we turned to the US. Now the US is withdrawing to its own. Neither of them gave two hoots about Australia. Give us your bodies and money for our wars is all they wanted.
At present we are committed to a $350 billion plus program to develop over more than a decade a handful of nuclear-powered submarines and in the meantime to obtain two or three Virginia-class second-hand ones from the US.
Yes, Virginia, there is a Santa Claus, but only for America. We have already paid the US $500 million with no submarine in sight, or ever likely to be. This is because we were dumb enough to sign up to a deal, AUKUS, which allows the US not to deliver any submarines without any penalty through a get-out clause.
How many lemons do we have to buy from this used-car salesman (Vietnam, Afghanistan, Iraq) before we realise that we are being dudded and become more self-reliant.
Under AUKUS, the British are supposed to design and jointly build the new AUKUS class nuclear-powered submarine. But Britain is struggling to maintain and replace its nine Astute and Vanguard class nuclear submarines with the new Dreadnought class. Another new class, AUKUS, is more a pipedream than a pipeline.
$350 billion for eight pieces of metal under the sea. is so dumb. Ukraine drove the whole Russian fleet out of the Black Sea with some home-made drones.
Worse, the US is pressing us to commit to spending 3.5 per cent of GDP on defence and to commit to join in any war with China over Taiwan. We are paying for submarines we do not need with money we do not have to fight enemies that we need not provoke.
This unreliable US President who does not share our values should cause us to rethink the America alliance. What we need is enough weaponry to ensure that a potential invader would get such a bloodied nose as to deter them – a purely defensive posture.
Public finance: Australia’s tax system is an inequitable quagmire. People using their labour get taxed around 30 percent. People with capital earnings pay a lot less or next to nothing.
Treasurer Jim Chalmers to his credit has convened a productivity summit. He cited the book Abundance by US journalists Ezra Klein and Derek Thompson which described how notionally progressive environmental and social-cause regulation was clogging the provision of affordable housing.
Yes, progressives should be concerned that over-regulation can stifle the very ends that want. But the Abundance was more than that. It also argued that we could have abundance (of cheap or free energy) if over-regulation of the construction of renewables and sabotage by the fossil industry were removed.
They argued that the broad masses could also have abundance if the ultra-wealthy paid more tax.
Chalmers has also flagged tax reform. It is a good start. We do not want capitalists salivating at the thought of deregulation and ignoring tax reform. We have been there before and there has been no abundance or trickle down for those below.
Immigration: Australia should drastically reduce its immigration program. The level of immigration has nothing to do with race because Australia has a non-racial immigration program, so whatever way you change the numbers – up or down – race has nothing to do with it.
It is about economics, the environment, and quality of life. In the 2023-24 financial year, Australia’s net overseas migration was 446,000 people. This is the main reason we have a housing crisis; congestion; and an infrastructure crisis generally.
Our universities are less places to educate and train our people than factories to sell overseas students tickets to permanent residency – headed by CEOs on million-dollar salaries.
In summary, Australia has to stop being so dumb and stop giving so much away – untaxed resources; money to the US and British military-industrial complex; tax breaks and avoidance schemes for the uber-wealthy; an out-of-control migrant intake; and allowing the fossil industries to expand and profit as if there is no climate crisis or a cheaper and better renewable alternative.
Crispin Hull
This article first appeared in The Canberra Times and other Australian media on 24 June 2025.