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It is time our politicians stand up to the highway robbers of General Motors and protect Australian taxpayers. And it would be far better to help Holden’s workers directly rather than handing out money to an American company on the brink of bankruptcy.

Maybe our economists have only been reading the wrong parts of the newspapers. If they skipped the business sections and went straight to the sports news they would look into the future with a bit more optimism. At least that’s what economic research from Germany suggests.

So is Australia really just a warmer version of England, as the immigration officer suggested to me 10 years ago?

Probably not yet, if simply for the fact that in the past decade Australia has avoided the worst mistakes made in Britain. But if Rudd continues his New Labour-like policies, Australia may well become another Britain, if only without the snow.

For Australia’s mayors and shire presidents, Christmas came a bit earlier this year—on 18 November, to be precise. But Santa Claus did not come to town. Instead, the towns went to Santa, played by no other than the prime minister himself. Kevin Rudd clearly enjoyed his new role, handing out a total of $300 million in pre-Christmas giveaways at the inaugural meeting of the Australian Council of Local Government in Canberra.

What sounds like a paradoxical experience may not be so much of a paradox after all. House prices, quality of life and economic growth are very much interlinked in Britain’s recent history, and it is not always easy to disentangle the three. However, if we want to understand why they are connected, it is necessary to subject them to an economic analysis, and that means analysing the way Britain’s built environment has been planned.

For policymakers, the lesson is clear. If they are concerned about housing boom and bust cycles, they have to quash the expectation that house prices will continue to rise. To do that, they need to examine property markets with long records of house price stability, and learn from them how to ensure that when more housing is needed, more can be built.

Wahlen werden in der Mitte gewonnen, heißt es häufig. Mindestens ebenso oft hört man die Klage, dass sich zumindest die großen Parteien immer ähnlicher geworden seien. Dass das eine mit dem anderen etwas zu tun haben könnte, liegt auf der Hand. Doch es war der Wirtschaftswissenschaft vorbehalten, für diesen intuitiv zu verstehenden Zusammenhang ein Modell geschaffen zu haben: das Medianwählertheorem.

A combination of high costs and poor quality is seldom a recipe for success – not for goods and services, and certainly not for countries. There is a danger that Britain will lose its most qualified people if they prefer a better and cheaper life abroad. It is equally likely that Britain will fail to attract highly skilled foreigners who are deterred by its reputation as an expensive and unsatisfactory place to live. Both would be equally disastrous for Britain’s economic future. And for this reason alone tackling the problem of Britain’s high cost of living is worth every effort.