Australia will become the first major economy in the developed world to record a surplus since the start of the global financial crisis. Julia Gillard, the prime minister, has pinned her political future on a “Robin Hood” budget which includes sweeping handouts worth more than £3 billion to reverse her dwindling public support. Relying on extra revenues from mining companies, the Government... 

While most pundits – and some senior politicians – stare in wonder at the size of the mining industry’s windfall profits, they are missing a great tragedy happening under their noses. The mining boom has pushed the Australian dollar to historic highs and this, in turn, has pushed manufacturing to the brink. The damage being done by the high dollar to the rest of the economy is actually...