Is Australia in a ‘sweet spot?'

Is Australia in a "sweet spot?" The question takes me back to previous life as a gifted tennis player.

Anyone who has ever picked up a racquet will tell you there is nothing like hitting the 'sweet spot.' You don't even feel the racquet hitting the ball. The footwork, head position and shoulder rotation feels instinctive - not effortless but inevitable.

At one level the ability to hit the 'sweet spot' time and time again is luck - natural ability. But it also takes hours of blistering practice.

Sound like Australia's economic success? Natural, inevitable, lucky, but with plenty of elbow grease?

Recently George Megalogenis described Australia as "the last rich economy standing." He's right. The Eurozone and North America are against the ropes. Even Germany's relatively strong position has left it with the burden of helping bail out its struggling Mediterranean neighbours.

Insulated by China's insatiable demand for our resources, Australia's position is the envy of the world. We are 'the lucky country' in that our resource wealth is the product of good fortune.

But we shouldn't underrate ourselves. Taking full advantage of this curtain raiser decade to the Asian century has also been made possible by a strong governance and business model.

You would be forgiven for thinking otherwise while watching parliamentary question time. But our envious economic position is a legacy of sound macro and micro-economic management. Good governance from both sides of politics is the norm rather than the exception.

Partial deregulation of the financial markets, floating the dollar, labour market reform, balanced regulation of the banking system and prudent budgeting and management of the national accounts have all contributed significantly to the position we find ourselves in.

No doubt the mining boom is playing a significant role in creating this legacy. A conundrum you might think for an environmentalist like myself who wants to see national prosperity for himself and his kids, without raising entire wilderness areas with mines, ports, dams and farms.

Clearly our 'sweet spot' is not cost free and comes with two significant considerations.

The first consideration is the extent to which we intervene to pace out the mining boom. One option is to cash in now and dig it all up. Great for mining companies, the people it employs and for the budget bottom line of state and federal governments. Huge mining royalties have enabled the federal government to perform a seductive but unsustainable triple act with the electorate – promising to cut taxes, build new infrastructure and budget surpluses simultaneously.

However the mining boom hasn't been so great for trade exposed industries hit by reduced demand due to the high Australian dollar, and regional communities at the coal face of the multi-speed economy, enduring the social dislocation created by the fly-in-fly-out economy.

We are also seeing the mining sector clash with the farmers seriously for the first time. Prime agricultural land and food security versus coal seam gas. You chose.

A more prudent path would be to pace out the boom and use the wealth to diversify and prolong the benefits, enabling us to modernize and improve public infrastructure over time. Slowing down mining sector expansion will also ease pressure on trade exposed industries by reducing the value of the dollar and restore some balance to the multi-speed economy.

The second consideration is the environmental consequences of the mining boom. Northern Australia is home to a breathtaking interconnected mosaic of escarpment country, heathlands, rainforests, coastline, floodplains, mangroves, coral reefs and over sixty intact river systems.

The region contains no less than 25 per cent of the world's tropical savannah, by far the largest proportion of this habitat in the world and the only significant area in an economically developed, politically stable country. Similar woodlands once covered parts of Africa, Asia and South America, now tragically 70 per cent of the world's tropical savannah is lost forever.

The bookends of this massive ecosystem are Western Australia's Kimberley and Queensland's Cape York Peninsula, two of the most outstanding wilderness areas left on the planet. Their species richness and diversity is staggering. Cape York alone contains three thousand plant species, half of Australia's birds, one third of our mammals and a quarter of our frogs and reptiles.

With less than five per cent cleared, Northern Australia is remarkably intact. But it's a fragile system under serious threat on multiple fronts – a wave of mining development, industrialization, seabed trawling, land clearing, logging, incorrect fire management and feral weeds and animals, from cane toads to pigs and water buffalo.

If that wasn't enough, there may be a major new threat on the horizon. In September, Tony Abbott announced that if elected the coalition would pursue an ambitious plan to double agricultural production by the middle of the century, through a network of new dams across Australia's north. This will include destroying millions of hectares of wilderness, over extraction from aquifers and huge irrigation and hydro electricity schemes.

It's as if Mr Abbott is blissfully ignorant to the causes of the near collapse of the Murray Darling system.

Moreover, in 2010 an expert panel called the Northern Taskforce investigated the development potential of northern Australia. It found that due to remoteness, poor soils and lack of infrastructure the economics of new dams don't add up, the geology is unsuitable, the climate hostile and evaporation in water storages extreme. But as the climate debate has revealed, Tony Abbott isn't one to let science get in the way of policy.

Alternatively, Australia could lead the way in developing a conservation economy for northern Australia. It will be no easy task. The notion that national prosperity is inextricably tied to exploiting our natural resources is deeply engrained in our national psyche.

The first thing we need is perspective. We significantly over rate the contribution the mining sector makes to national employment and GDP. By recent polling, both indicators are up to ten times less than the public thinks. For example, mining contributes less than two per cent of national employment when the public believes it's over 20 per cent.

We also overestimate the 'trickle down effect' of the mining boom. The mantra that massive mining projects will extricate indigenous communities from the deplorable living standards many endure in northern Australia is dubious. This path has a poor track record and comes with the unacceptable trade off that Traditional Aboriginal Owners should never be forced to make – that development must come with the destruction of their country.

But there is a way forward if we exercise courage, innovation and political leadership. It involves a departure from the development model of southern Australia – a conservation economy with a large, interconnected network of protected areas at its core, complimented with viable and sustainable industries and enterprises.

This world-class reserve system would be a mix of World Heritage, National Parks, Indigenous Protected Areas and nature refuges.

Compatible industries may involve low impact grazing on native pastures, eco and culture based tourism, fishing, mining projects with a small ecological footprint, biosecurity, defence, providing health, education and other government services, information technology, small scale agriculture, horticulture and forestry plantations. Indigenous industries include bush food and medicines, tourism and maintaining sustainable fisheries.

Indigenous people employed in conservation and management of country is critical to maintaining the natural and cultural values of northern Australia and job creation in indigenous communities in remote areas. These jobs are not welfare. Indigenous knowledge and skills are crucial to the long-term management and protection of this precious environment.

Building a considerable workforce of indigenous rangers across Northern Australia must be a priority as Aboriginal people stand to own up to 30 per cent of Northern Australia. Perhaps their most important task is to maintain traditional ecological burning practices across the north, to maintain habitat for wildlife and maximise carbon carrying capacity of this vast savannah woodland, as a major plank of Australia's climate change response.

It's an ambitious plan but it's not beyond us. A 'sweet spot' to last not just for the next fifty years of the mining boom but Australia's first carbon based economy, positioned for the twenty-first century.