Australia is drifting into the very future it has been warned about. 

On one hand we are one of the richest resource nations on earth, perfectly positioned to monetise the global energy transition.

On the other, we are becoming more economically fragile, more unequal and more exposed to geopolitical shocks we cannot control. 

The contradiction is striking and very much unsustainable. 

The opportunity we keep refusing 

For years I have argued in these columns that Australia should follow the example of Norway, which operates its economy based on a simple formula – dig up your resources, tax them properly, save the proceeds in a sovereign wealth fund (granting the population a sense of ownership), use the returns to finance a prosperous and sustainable future. 

Norway did exactly that with its North Sea oil. Today its sovereign wealth fund is worth well over US$1 trillion ($1.5 trillion) and quietly finances one of the most stable, equitable and forward-looking societies on earth. 

Australia chose a different path. 

We also dug up vast amounts of resources,  but instead of saving the windfall we distributed it across tax cuts, raising house prices and consumption.

The wealth showed up in private balance sheets rather than in a national fund. 

That decision is now coming back to haunt us. 

The world is getting more volatile 

The global environment that supported Australia’s prosperity is becoming less reliable. 

A prolonged disruption to shipping through the Strait of Hormuz would be a textbook example. A significant share of global energy and fertiliser flows through that narrow passage. Any disruption pushes energy prices upwards, triggers inflation and probably tips parts of the global economy into recession. 

Australia would be hit much less severely than most economies, but isn’t immune to such global disruptions.

A quick reminder that:  

Our mining products would face lower global demand as consumer markets in China, Japan, and other major trading partners slow down. Despite significantly higher prices that we can charge for our mining stuffs, we might not collect as many dollars in total. 

Global food prices escalate as fertiliser shortages resulting from the Strait’s closure keep yields low around the world. Agriculture would be........

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