Economic nostalgia won't solve Australia's problems

But what of other industry sectors, especially others promoted as representing Australia's supposed comparative advantage.

Take food exports. On 12 September 1996, Prime Minister Howard (House of Representatives) noted the potential for Australian agriculture with an estimate that the total East Asian food market would be worth around $685 billion by 2000, including a need for $83 billion of imports.

While Table 2 data indicates that Australia's food exports increased by 323 per cent between 1990 and 2011, Australia was easily outperformed by other nations as its global share declined from 2.5 to 1.9 per cent. Australia's food export to import ratio also worsened from 408% in 1990 to 213% in 2011, amongst the worst declines of the leading food export nations.

Table 2: WTO trade data (Food exports in millions of US dollars)

And with many Australian farmers facing much higher debt and declining equity, with average farm debt doubling from the late 1990s to be $460,000 by June 2011, an economist and farmer from Queensland, Ben Rees, argues that the support for food producers is now affecting small and large scale farmers with the "philosophical structural reforms of the 1980s" having "transformed the small scale farm, low income problem into one where now large players are facing collapse".

Now, one could argue that mining and agricultural exports do not alone define the well-being of the economy. After all, Australia's agriculture and mining sectors represented just 5 per cent of Australian employment by the end of 2012, with the expansion of services employment making up for manufacturing jobs declining from 16 to 8 per cent since late 1984.

But in economic terms, is it enough for Australiato specialize in certain industries to enable us to always maintain a high standard of living, even allowing for a recent prediction that Australia's resource exports would increase by 50 per cent over the next five years?

Is it enough to claim huge potential in terms of services? In 2011, Australia had 1.5% of global merchandise exports and 1.2% of global service exports, yet total global merchandise exports still dwarfed global exports by over 4 to 1 ($US18,255 billion to $US4,170 billion).

With Australia's share of global manufacturing (non-food) exports also declining further from 0.29 to 0.24 per cent between 1990 and 2011 at a time when they globally still comprised around 65 per cent of total merchandise exports in 2011 (70 per cent 2000), Australia is now competing with emerging major economic players (such as Brazil) for a minority of global exports (non-manufacturing exports).

As table 3 indicates, when including the EU-27 entity, the top ten entities still had 86.4 per cent of global manufacturing exports with the rest of the world sharing a mere 13.6%.

Table 3: Share of global manufacturing exports (non-food) (% of global total in brackets)