The government simply ambled along. Christmas came and went and it was not until the normal budget month of May this year that we saw the government plan to tackle the "crisis". By then, even those who had been panicked into voting Liberal because of the economic situation must have realised that it was all a ruse. There were, of course, major tax changes flagged from the moment the government was elected, but the Carbon Tax was not repealed until July 17 this year and the Minerals Resources Rent Tax repeal bill did not get royal assent until September 5. Getting rid of these taxes does nothing to tackle the supposed debt and deficit problem. The opposite is the case. The repeals cut revenue and therefore increase the size of the deficit. Only the removal of the associated expenditure measures would have a positive impact on the deficit and their removal has proved more difficult to negotiate. To see why future statistics will be the true measure of government performance, we must look at the period covered by the latest figures.

The National Accounts released on September 3 cover the June quarter of 2014. Even measures that took effect at the moment Hockey delivered his budget speech on May 13 would have an imperceptible impact on the growth figures in these accounts. Hockey might welcome the figures and say they were a "pleasing set of numbers" but they had little or nothing to do with him. Similarly, the labour force figures released last week are for the month of August, too early to take account of any impact arising from the repeal of the Carbon and Mining taxes. As the purist theoreticians would have it, the children of the future can all work in the service industries as cleaners in hotels, waiters in restaurants, carers in the health sector and advisers on finance. The impact of other economic policy decisions has yet to be felt. The Abbott government decided last year not to support the automotive industry and appears to have accepted the purist economist's model that it doesn't matter if Australia has a manufacturing industry.

Toyota will stop making cars in Australia in 2017 and Ford and Holden will stop local assembly in 2016. Alcoa has just stopped production at Point Henry near Geelong. As the purist theoreticians would have it, the children of the future can all work in the service industries as cleaners in hotels, waiters in restaurants, carers in the health sector and advisers on finance. Some may even find increasing opportunity in the "new hope" construction industry. Lest you think I've forgotten mining and agriculture, keep in mind that at its peak, the mining sector employed less than 2 per cent of the workforce, and agriculture, forestry and fishing employs about 3 per cent. The decision not to support the automotive industry will have its main impact in Victoria and South Australia. South Australia will also be the main loser if the government chooses to buy Japanese submarines to replace the Collins class fleet.

The government has a comfortable 30-seat majority and has few close marginal seats in these two states. Even if they were to lose Hindmarsh, Deakin, Corangamite and La Trobe, Abbott and Hockey might well consider it a political price worth paying for the dollar savings from not supporting Australian manufacturing. But in this process, the Australian economy becomes more unbalanced. All the cars on our roads and probably all the components that go into making cars will soon be imported. As a nation, we will need to balance this trade with exports of raw materials such as coal, iron ore and gas and agricultural products. While we have received high prices for raw materials in recent years, the long-run trend is downward. We would be foolish to become even more dependent on selling commodities. The conventional response that our tradeable services will compete successfully on the world stage, significantly adding to our export income and keeping large numbers of our population employed, is laughable. If we can sell architecture services via the net, so can lower paid Indians. The currently much vaunted sale of education services is in reality an immigration marketing program, where many students study here in the hope that they can win the right to live and work here. Chinese university standards are rising, while the leading United States universities are developing new ways of selling their most attractive qualifications, ensuring that in the long term, Australian institutions will find it harder to compete.

Since 1991, Australia has had the longest continuous run of economic growth in its history. Despite its commitment to return to a budget surplus, the government will not be so ideological as to risk bringing this run to an end. Equally, it will not want to see unemployment rise. A blip in the July figures saw our unemployment rate creep above that in the United States for the first time in years. The government must have been relieved last Thursday to see the August rate fall back to 6.1 per cent. But at present, the only policy it has to tackle unemployment is lowering wage rates by, for example, getting rid of penalty rates and introducing low junior wages. That is unlikely to be an election-winning policy.