Managing prosperity requires new thinking and a new approach

Comments on Paul Kelly “Mission is to manage politics of prosperity”, 24/11/2010, http://www.theaustralian.com.au/news/opinion/mission-is-to-manage-politics-of-prosperity/story-e6frg6zo-1225959731099
How should the government of any political persuasions manage the resources boom?

Well, it is both hard and easy.

It will be hard if government and bureaucrats continue to engage in conventional thinking and approaches.

It will be easy if the sources of the resources boom benefits more, but the rest also share some of the benefits in an acceptable way to both the booming states and the rest along the way.

This will have to involve a new approach to federation and to taxation reforms that is not necessarily benefiting every state uniformly.

It also means having the most appropriate monetary and fiscal policy settings that aim at neutralising the differential impacts of the resources boom on different sectors as much as possible without undue distortions in the long run or from the long term perspective for the nation and the economy.

The key is appropriate balance between the booming states and the rest, as well as long term design of policies and optimisation of the nation's wellbeing.

By this standard, Henry's approach and recommendations might be half right at best! He also needs to reconsider what will be best policies.