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.