Karl Marx may have been a communist but he was right about a few things. He said the political system of a society reflected its economic structures -- and we're now beginning to witness this truth.
The rise and rise of Western Australia and Queensland and the financial consequences of the phenomena are well-documented. Last month, the Treasury Department in Victoria released a discussion paper arguing that the resources boom, because of its effects on prices and wages, will slow that state's growth. The paper was called A Tale of Two Economies -- an accurate enough description of what is happening. Next week's NSW budget will confirm how far that state, which once rejoiced in the title of "premier state", has fallen behind its competitors.
What hasn't yet been considered is what such a transformation might do to policy and the national political mindset.
While the Sydney/ Melbourne axis will obviously remain the most important source of political power, increasingly the influence of that south-east corner of the continent will have to be shared with the country's northern and western extremities. And until a future federal government decides to relocate its public servants to Karratha and Gladstone, Canberra will also be significant because it houses the commonwealth bureaucracy.
Australia has had mining booms before but none has had the same potential to affect the distribution of political power. This boom is different. It is exacerbating the rate of increase of population of Western Australia and Queensland as people are attracted to better climates and living conditions. It is also taking place at the same time as manufacturing industry, the traditional economic mainstay of Victoria (and South Australia) is declining. And, it could continue for decades.
What is occurring can be put into some perspective. Just one energy project, the Gorgon liquefied natural gas venture off the north-west coast of Western Australia, will generate annual export earnings equal to more than 10 per cent of the entire value of manufactured goods exported from Victoria.
The political attitude of Victorians can be characterised as one of complacency. It is the product of a century of industry protection and the industrial relations club. NSW, traditionally a free-trade state, is establishing itself as the regional base for one of the most heavily government-regulated sectors of the whole economy -- corporate and financial services. In both states the search for a solution to a problem usually begins and ends with government.
In Western Australia and Queensland the approach is different. Because each state is further away from Canberra, and because their regional centres are a greater distance from the states' capitals, there is less of an ideological predisposition to rely on the apparatus of central government. It's no coincidence that in the 1970s much of the philosophical impetus for the "dries" came from the west (think John Hyde).
Miners and farmers, the National Party notwithstanding, appreciate the limits of what governments can do in the face of the market because their outputs are internationally traded.
Policy elites on the east coast of Australia (at least those that are not rabidly anti-American) are more likely to look across the Pacific to forms of political and economic integration with the United States. Those on the west and northern coasts are more likely to consider Asia as the source of their economic opportunity. The distance between Perth and Jakarta is half that between Sydney and Jakarta.
The most obvious political impact of the emergence of Western Australia and Queensland will be in the number of their seats in federal parliament as population follows economic opportunity. At Federation, the two states had 18 per cent of the representation in parliament. Now it is 30 per cent and the trend will continue. Within the next 20 years, the population of Queensland will exceed that of Victoria.
This is one of the subtexts of the seemingly aborted merger between the Liberal and Nationals parties in Queensland. If Queensland were to be of less importance into the future, the federal coalition might not pay as much attention about what was happening in what until recently was regarded as something of a political backwater.
However, if our potentially second most populous state were to have a single conservative political party the ramifications throughout the country for the Liberal and National parties would be enormous.
One of the things that Marx didn't say was that "demography is destiny". But there is every indication that both economics and demography will play a big part in Australia's political destiny.
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