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03 October 2014
by Malcolm King

Don't cry for me South Australia

I have a fantasy that Juan Peron takes over South Australia, gets rid of the Liberal and Labor parties and turns the Advertiser into a newspaper. I picture him and Evita on the Town Hall balcony in King William Street, addressing the crowd.

It's a lovefest. Juan's uniform, tailored by an old SS officer, is showered in Coopers Ale, Beerenberg jam and frog cakes. Our savior!

Unfortunately, Argentina's problems of the 1950s bear no relationship to what is happening in Crow Land today. South Australia's economic issues are far more serious.

The state's share of the national economy has shrunk over the last 24 years from 7.3 per cent in to 6.1 per cent. It currently exports just 4.3 per cent of Australia's goods and services. State GDP growth is languishing at 1.3 per cent per annum, down from 1.8 per cent in 2012/13. The economy is regressing.

Real unemployment - not the ridiculous ABS methodology - is around 12 per cent and climbing. In the some parts of Adelaide's northern suburbs, real youth unemployment is close to 40 per cent. In the southern suburbs its about 25 per cent and 20 per cent in our regional centres.

There are some parallels though between SA now and Argentina's neighbor, Uruguay, in the 1950s and 60s. Uruguay's economy boomed until just after the Korean War, due to expanding beef and wool exports. It created a strong welfare state in which the government redistributed wealth and protected workers. Think of the Don Dunstan years. Many lefties can think of nothing else.

After the Korean War, no one wanted Uruguay's beef or wool. The economy crumbled. There was mass unemployment and inflation, manufacturing collapsed. The bills went up and the standard of living dropped. The government employed one in every five working Uruguayans. Nepotism ruled. Sounds like Adelaide today.

Then came the Tupamaros – revolutionaries who were young, groovy and politically 'right on'. They robbed banks, gave money to the poor and made love with beautiful women. It's unlikely a guerilla group would ever get up in the 'City of Churches' – sleep with beautiful women? 'What's in it for me?' they'd ask.

The Tupamaros were the polar opposite of the SA legislature who in the main, are graveyard zombies straight out of Stephen King's Pet Sematary.

Have you ever noticed that when the fecal matter hits the fan, it's the poor who cop it in the neck? In SA they have company – the middle class. This is something new in our history.

It's also one reason why the local media is dedicated to creating external enemies (Al Qaeda, ISIS, housing trust tenants, single mothers, etc) or 'mythologies' that enforce the status quo; or stories that are so banal and absurd, you wonder whether Dada is making a comeback.

The real reason is because the elites are scared because they can see this getting terribly out of hand. We are looking as massive levels of unemployment in SA in both the working and middle class over the next 30 years, and the government has all the kinetic appeal of a Myer store window dummy.

We know what the problems are: a lack of economic diversity, failure to transition to the new economy, decline of the manufacturing and construction sectors, low exports, shrinking private investment, an ageing population and high taxes on small business, for starters.

There isn't the capability to rectify such destiny issues. Plus, to be honest, the people who were skilled in policy implementation left Adelaide 20-30 years ago. A cursory examination of Seek and CareerOne shows that while there is high demand for Salad Artists and Nail Technicians, there's little demand for the skills and capabilities needed to rebuild a commercially viable state.

Actually, if a revolutionary force were going to arise from anywhere, it would be Elizabeth. Yet it's doubtful whether its members would wear black berets, leather jackets and look like Che Guevara. They may look like Hando and his mates out of Romper Stomper, who think Norwood and Kensington Gardens would make a nice place to live.

John Kenneth Galbraith once said that the choices before governments were usually between the unpalatable and the disastrous. There's a third option: begging. The state government is praying madly that the Federal Government makes these problems go away, without placing the whole state in to receivership.

There's some very sorry news coming for Jay and his team of budgies. The resources boom is in full retreat. The Howard, Rudd and Gillard governments treated a temporary surge in national income as a permanent fixture and spent like drunken sailors. The Rudd and Gillard governments increased spending and created new entitlement programs without the ability to pay for them.

Recently the price of Australia's biggest export, iron ore, hit its lowest in five years. Two years ago iron ore peaked at $US149 a tonne. It's now trading at under $US80 a tonne. We can kiss the expansion of Olympic Dam goodbye for some time.

While much of the Budget spin is now axle deep in bulldust, Australia's mineral commodities are not faring well and retail is comatose. There will be no Federal handouts to Crow Land simply because it can't run an economy.

As stated, the greatest and most wicked of problems is youth unemployment and the maelstrom that's coming in the form of intergenerational inequality. As the national economy slows, many more young people will suffer long term unemployment while the Boomers maintain their hold on 70 per cent of the nations domestic wealth, as they live on and on and on. Living on is not the Boomers fault. The Government simply didn't prepare for the longevity.

There's one other possibility – extraordinary to contemplate – that the middle class, which is also being hammered by unemployment and high prices, turn against the government and corporate elite and do something to protect not only their interests but also the interests of those battling in the northern and western suburbs?

What could they do? Not pay land tax. What could the blue-collar workers and unemployed do? Not pay their utility bills. The state government is not representative of the people – it's simply a manager – and a bad one at that.

Without government help – because they'll stuff it up – businessmen and women need to change the narrative about the state. This is going to involve considerable risk and financial speculation. They are going to have to place SA at the centre of the media dialogue, not as a victim or sitting on the periphery (which is what it feels like working in SA). Knock off the chip on the shoulder and the parochialism.

Don't send politicians overseas. It's a complete waste of time. Send leaders of the business community trained in pitching sales propositions - and don't let them come back until they have signed contracts in their hands.

In a highly developed society, the elite cannot survive without the obedience and loyalty of hundreds of thousands of people, who are given small rewards to keep the system going: the police, teachers and ministers, administrators and social workers, labourers, lawyers, council workers and more. These people are the guardians of the system; buffers between the upper and lower classes.

But it's these very people who know that the system isn't working. That for all the promises made, few have been kept. They will ultimately push for radical change.