Australian Treasurer Wayne Swan's Budget last week provided several worthwhile ideas the New Zealand Government could do well not to ignore. After all, a constant refrain from the National Party and its Act ally is a desire to "catch up" with Australia, at least in terms of wages.
In fact, the Australian economy is beset by serious underlying problems - while nowhere near as challenging as this country's - requiring the kind of firm, no-nonsense attention Labor administrations traditionally abhor.
Certainly, it has not had to cope with two severe earthquakes and their consequences, but it has had a natural disaster of its own in the form of east coast flooding. It is no surprise, therefore, that Mr Swan's Budget has been labelled a "tough love" affair.
Australia's unemployed, at a rate of under 5%, is less than ours, the global financial crisis had minimum impact, and export prices have helped produce record profits. From this side of the Tasman, as we are constantly reminded, Australia appears to be in great shape.
Actually, Australia's budget deficit this year is almost as large as it was last, and there will be a deficit next year. There is hope of "small" surpluses in the following three years.
Certainly, Australia is not borrowing the equivalent of $380 million a week just to keep the Administration afloat, but Mr Swan's Budget outlined $A22 billion in spending cuts and increased consumer taxes, including $A2 billion on middle-level income earners, holding family benefits at present levels and limiting access by higher income families.
In fact, Mr Swan included literally hundreds of measures to cut government spending, particularly by reducing or limiting payments, benefits and adjusting tax arrangements.
Nor was the bureaucracy exempt, with departmental budgets sharply trimmed, ordered to stay within spending limits and to make additional savings over the next four years.
The Gillard Administration's objective is to return to budget surpluses as soon as practicable, although a large portion of the savings Mr Swan has contrived will be used to pay for new spending in health, low-income family support, education policies, and for flood relief measures.
In only one respect is the Australian Government's core problem identical to New Zealand's: insufficient revenue.
Australian business investment has grown at 4.5% in the past year to record levels, and private spending by 3%; record numbers are in jobs, earning higher wages than ever before, yet the gap between income and expenditure as a percentage of GDP is growing because revenue is not rising to meet expenditure.
In Australia, the reasons are peculiarly local. In this country, state spending has continued at relatively high levels but has been made worse by less private spending and lower business tax receipts following the recession, together with the impact of the finance company failures and the earthquakes.
The result is the same: a large budget deficit, in fact the worst in modern times. In Australia, hopes are pinned on a mining boom to drive new prosperity. Here, the hope is the dairy boom will continue and perhaps be partially matched with short-term gains from tourism.
But immediate interventions are required and much attention is being paid in the days before Bill English discloses his Budget to just how ruthlessly the razor will be wielded.
Mr Swan was bold in some areas usually considered untouchable by Labor governments: he toughened the rules for getting the dole, and for the equivalent of the domestic purposes benefit.
And in so doing he emphasised "the benefits of work to every capable Australian - single parents and jobless families, young Australians, the very long-term unemployed, the disabled and older workers...".
Mr English, being a member of a popular administration, can be very much bolder without serious risk of damage at the general election in November (across the Tasman, the Government has steadily lost support and now trails opposition parties in polls).
The Treasurer has repeatedly claimed Clark government compensation schemes such as KiwiSaver, student loans and Working for Families were introduced under the false assumption the economy was growing, but his and the Government's attention to such welfare issues is hopelessly misdirected.
Getting the economy growing is far more important - along with getting control over state spending because what is not featuring in public debate is the salutary fact that productivity is in decline and has been for some time, and that the export sector has actually shrunk in the past four or five years.
New Zealand can only earn - not subsidise - its way out of penury.
