Mining boom and dutch disease

Comments on Tony Makin “Dutch disease no excuse for poor productivity”, 29/12/2010, http://www.theaustralian.com.au/news/opinion/dutch-disease-no-excuse-for-poor-productivity/story-e6frg6zo-1225977420144

Some points to consider:

1. If the mining boom really delivers some positive benefits to the Australian economy including those above mineral royalties, then part of that should be saved for compensating the use of minerals and for the benefit of future generations, as opposed only to lower tax rate for other industries in response to the Dutch Disease effects.

2. The slow down in productivity in the past decade, is that only in Australia or is that also in other industrialised economies? That can have significant implications. If it is a wider phenomenon, then Australia is at least not alone to blame.

3. While reducing government spending may reduce pressure on interest rates, what is the cost of lower government spending? Or government spending is only negative to the economy or neutral? Optimal government spending, excluding ineffecient policies and wastes, should be positive to the economy, it seems.