Very interesting times in the next few weeks as we are goping to have a debate forced upon us - what is the lifeblood of this nation. What is our major industry? PJ will concur with me - we are in our 6th year of drought but this year is the worst of the 6. The bush is devastated. This is not a case of rural whigeing - when we entered the drought we had full reservoirs. Now most of our storage dams are below 20% heading into what is predicted to be a record hot and dry summer. We have not had rain in 3 months and ALL of the cereal crops have withered on the stalk. They are gutted - there is nothing to harvest and it is too late to save them even if we did get rain. So the debate is - how does Australia earns its livelyhood. We know we are not a manufacturing nation (secondary industry). In the past we have always been a primary industry economy - farming and mining. Let me assure you that non-irrigated farming is wiped out and the irrigators are very nervouse given the dam levels. Mining is riding a boom but commodity prices are probably about to pull back. Are we a tertiary (services) economy? I'd reckon you city people think we are. But let me assure you that when times get tough the first things that will stop is the ridiculous outlays on luxury good and services and every time I visit Sydney it's hard to not leave with the feeling that a large portion of the city are in the luxury business. If they start to drop off the employment line it will create a vicious circle will it not? I suspect that the Reserve Bank will increase interest rates next month. They will do this on the basis of "inflationary" pressure. Let me assure you, this will knee cap the bush. Outright bloodbath out here. And I suspect the fat cats in the Reserve Bank on the 6 figure salaries have not realised that the "inflationary pressure" is not being caused by "too much disposable income" but by high bloody petrol prices and their flow on effect. I know I am being a prophet of doom, I know my opinion differs to my other economist colleagues who are pulling the strings and I sincerely hope I'm wrong. This is one occasion where I really hope I'm not here in a year's time saying "I told you so".