Savage beast

'It's Tony time' in Australia and now the election has passed, he will have to wade through the mire that is Australian economics and the dangers are multiple.

Interestingly, he won't be the first Tony to assume leadership during a time of financial fracking. In 1997, the ever smiling Tony Blair took the reins of a Tory tired Britain. He did his best but the premiership was still dogged, primarily by the Iraq war. And that was when the country was going through an affluent period. The current Prime Minister David Cameron remains on a quicksand economy, his fiscal policies having their survival married far more closely to global finances than he would like.

Tony Abbott could learn a lot by looking at Britain. After all he will now have the job of cleaning up the financial mess of the previous government. Not forgetting Syria looming on the horizon.

Read the papers and you are bombarded with the constant references to the weakened dollar and the apparent slowing of the mining industry. In 'Real solutions for all Australians' the Coalition's key policy document defines, with the lecturing voice of a parent, an economic policy that extols a sensible, real approach to finances – 'no more living beyond your means you naughty proletariat' shouts the page. (It may just be me but this sounds a little like a policy based on austerity. Oh the horror, the horror).

The Australian public will just have to buckle in and see how well Joe Hockey does with his new budget. Guaranteed, as there are with all penny pinching budgets, there will be losers. And the greatest fear is that it will be Australia's industries.

So the question Abbott and his band of merry men (and hopefully a few women) will have to address is: how will they float a budget that, before its birth, is having to battle? The answer seems to lie in two places; domestic growth and Asia.

Signs reading 'Buy your kids a job: buy Australian' are littering the billboards as you head into the CBD and essentially they are promoting the message that will create financial longevity. Given the recent move of a number of companies to bases overseas, this message has never been so pertinent.

Pacific Brands, a once-Australian goliath, has been based abroad since 2009 after receiving numerous government handouts to keep the workforce Australian. The move made them millions but cost Australia 1800 plus jobs.

Sadly this is no individual tale of woe; the car industry has been in receipt of government handouts for around 12 years and this still hasn't been enough. Ford Australia has announced that they will end production in 2016; Mitsubishi said that domestic manufacture was no longer viable and Holden reportedly is one of the greatest beneficiaries from the government. Australia's car market is now mostly made up of imports from Asia and Europe.

The new government has suggested that it will 'invest in small businesses to help create investment and employment' but what about keeping the bigger companies? How long can the government keep buoying the car manufacturing industry? It seems like the hold is tenuous at best, with its grip slipping as each year passes and the dollar fluctuates.

A local manufacturer in Victoria who provides staircases has been in business for nearly 100 years and says the difference from manufacturing 20 years ago to now is incredible.

'To keep the business profitable and purely Australian, I have had to adapt, it is hard to produce Australian now, wages are high and demand for lower priced pieces is higher. If people can buy a cheaper overseas alternative they will. I am lucky because the business has a strong reputation but smaller businesses must struggle to get a foothold.'

This seems to be the main problem, everywhere is being squeezed, people's wages are higher but the cost of living is higher still. If a cheaper option is available why would you buy Australian?

Thus the sleeping giant awakes and gobbles up trade. Companies push for bases abroad because the reality is they will make a greater profit.

'The reality is, if everything we sold was purely Australian and New Zealand made, I wouldn't have a business. Agriculture equipment has ties with the automotive industry so what happens there affects us,' said a spokesperson for Godings Agricultural Equipment, an agriculture distributor based in Victoria.

How will the government overcome this obstacle? Especially given the fact that re-investment in Australia will only happen when prices lower. Or they could just take out a leaf out of Cuba's book and force the sale of domestic and only domestic products. Tony Abbott the next Castro? Maybe not. Asia is well aware of the torrid financial past of the western world and she is laughing in the face of our historical stupidity.

Julie Bishop, as Foreign Affairs Minister, will have to whisper sweet nothings filled with trust as opposed to the lustful panting of desperation performed by previous secretaries. After years of being used, China is now holding all the aces.

Their growth slug earlier in the year injected panic into the global market, with the west watching and waiting for a treat.

In 10 years the Chinese economy has grown from a developing market to a fire breathing dragon. By suckling at the Australian mining teat, she produced a boom that helped safeguard the country from the GFC. But now her need for iron, ore and coal is on the decline a fact that is knolling for the mining industry.

However, even though this particular form of industry has slowed investment, nearly half of all Australian exports go to China. Shares in liquid gas and other forms of energy have remained steady and are projected to do so for at least another 30 years. But should this be relied upon? Will China really be the filly that Australia will ride to economic success on?

Doubtful, it would be a total imbecile government (and let's face it the world has never seen one of these have they?) that relied on an unsustainable boom economy to tie their ribbon to. For better or worse the global market is married to China's future growth and we better all cross our fingers and hope that they take great care of their economy because if China crashes, the GFC will look like a mere lack of pocket money.

Numerous companies in Australia rely on imports from and exporting to China so there is a whole section of the economy reliant on the East.

The result? That anything that occurs overseas has the power to directly harm Australian markets and industry.

'In industry, we have to keep our eye on Asia at all times' said one industry worker from Foilboard Insulation who make insulation and distributes Australia wide.

'It is a double edged sword whether you are in competition or you're exporting or buying'.

Entrenched isn't the word. The savagery of global economics forces this partnership, making it harder to become unstuck and rely on domestic industry and trade. For some businesses partnership with Asia has proved more than lucrative and is, in their view, a step in the right direction. A spokesperson from Dust Extraction Australia said 'We can provide a service for Australian businesses at a lower cost because a number of our products come from Asia. It is because of that that we can quote the best price.'

Economically Australia has suffered some damaging figures of late, coming second worst out of 51 for productivity. If this fairytale Grimm is to be believed then Joe Hockey and his team have some serious sums to do.

The chicanery of the political system has left voters and industries feeling dazed and confused. The Labor party seems to have spent all the pennies but invested none to pay the bills and with the global growth rate supposedly barely clearing 2%; financial crisis seems to be too close to take another exit. How will gym mad Abbott apply the brakes and make the necessary turn? Let's hope he pumps enough iron to turn the wheel.

In a foray out to the bush this weekend I happened across a little outback pub. The landlady had an interesting take on the election and economic policies. 'This place is ruined. It doesn't matter who lives in the lodge they're all mongrels. It's the people that run this country.'

I considered this statement and agreed, ultimately Australia will define itself economically for good or bad and you just have to hope that it has the foresight to see that putting your eggs in a foreign basket can bite you faster than a funnel web.

Domestic investment may not necessarily reap the instantaneous benefits of commerce abroad but it will allow for economic building and growth. If the mining industry debacle taught the politicians nothing, then let them learn the lesson Britain never did. Perhaps a pre-1980's UK would not have been dismissed as 'a little island' by Mr Putin. At the moment, patriotism aside, I may be inclined to agree.