A businessman recently said to me, “ in dollar terms, my house in worth twice what it was worth a few years ago, yet I didn’t do anything to it, so I think it is more likely that my money is worth half as much”. Many people are rather sceptical about the truth of the current economic boom for similar basic reasons. At its worst, the boom may have made many people poorer without them realising it. In fact, it there is a very real possibility that our politicians are engineering a Japanese style poverty trap that keeps Australians chained to the work treadmill without hope of enjoying the lifestyle that we expect. This article points out some of the events that have made me wary of the purpose of our ideologically driven government.The development boom began when the stock market overheated and began to slide. People who were watching their superannuation and share funds saw large losses rather than the large gains that they had been experiencing for most of the last 20 years. It was quite predictable that people were going to desert the stock market in droves. As property had not moved in many years it was also predictable that people would return to investing in property. The trigger was the reintroduction of the first homebuyers grant by the Federal Government. And this was certainly one of the more brilliant things the government ever did as it enabled Australia to thrive in a slowing world economy. However, there quickly came a point when investors started competing with home buyers and house prices started to soar beyond reason. I believe the government should have intervened at this point. Instead, it became a race between homeowners desperate to secure a home and investors trying to secure a self-funded future for themselves. Unfortunately as house prices increased so much, the capacity of homeowners to pay them off, and investors to profit from rent has decreased greatly. It seems that the main winners from the boom were banks and developers and not the public. At the time, I thought that the Federal Government should have intervened by dropping the tax on superannuation inputs, as this would have got many investors out of the housing market. That would have kept house prices down and those investors would have been about 50% better off by now as they would have bought stock when the stock market was low. Instead, most of working Australia has fallen onto the treadmill of debt and votes for the party that promises the best economic performance – the Liberal Party. Would the Liberal Party engineer Australian society in this manner to keep themselves in power? Previously the Labor Party was accused of having an immigration policy that favoured unskilled migrants who typically vote to the left, as a means of staying in power. I think both major parties are capable of damaging Australia’s interests for their own benefit. The treadmill of debt also undermines the public interest in environmentally sustainable development (ESD). Currently nearly all ESD initiatives are on the backburner until we achieve more economic growth so we can keep the debt laden Australian economy alive. Unfortunately nearly all of the growth that the government is encouraging is ‘business as usual’ economic growth rather than sustainable economic growth. However we may be at the point where increased growth actually makes us worse off rather than better-off. This is because the nature of growth is changing. Growth used to mean increasing the size of the pie for everyone, however as we meet more limitations in land and resources, growth increasingly means sharing our fixed-size pie with more people. ‘Business as usual’ growth also uses up many of the resources that we need to change to sustainable growth and when the transition to renewable resources is forced upon us, it will be more costly, difficult and disruptive of society to an extent we would not like to imagine. “Collapse”, a book by scientist Jared Diamond is recommended reading if you want to find out.People like myself, who study environmental and social issues for a living, have the ability to peer a little further into the future than most Australians. We also get abused by ordinary Australians who are keen to make sure we know exactly how the projects we are working on effect them personally. In the long run, I think Australia is likely to decline socially and economically and the first victim will be our egalitarian, idealistic, ‘fair-go’ society. We developed this society as a revolt against suppression by the rich and landed. We maintained it because we could afford to those beliefs. However, when our government finalises the conversion of our society into a dog eat dog system, will we still be brave enough to maintain those values. Without these beliefs and government systems that reflect these beliefs, Australia could rapidly descend into islands of wealthy who enjoy quality environments, surrounded by poverty belts which offer a terrible lifestyle. The next big event on the socio-economic radar is the impact of Free Trade Agreements and the new labour market reforms. The Canadians said it turned their country upside down and that it took them more than a decade to recover from the North American Free Trade Agreement. All their ‘inefficient’ industries where swept away and their economy simplified down to a few ‘internationally competitive’ industries. The Australian government and media failed or conspired not to discuss this issue with the Australian public – shouldn’t we have been informed about the promises and risks of the ultimate deregulation?If you have any comments on the future of Australia and what that means for Cairns, please follow this link to the 'What's going on' forum.