The scene in Adelaide is in the laneways and it's vibrant. Happening coffee spots; exciting bars; young people; and curated food (with details of provenance and flavour spilling over menus). Laughing parties in the Hills dissolve into couples traipsing romantically through the old vines; students earnestly listen to their lecturers while recent graduates solve problems in front of computers. What's not to like. It's the bright future of tomorrow. But that's not all, oh no; there's more.
A tariff requires payment, the dark side of all that effervescent fun.
![More people are sleeping on the streets in Adelaide as a result of the state's declining manufacturing industry and ...](http://web.archive.org./web/20170712152337im_/https://www.fairfaxstatic.com.au/content/dam/images/g/x/2/a/m/p/image.related.articleLeadwide.620x349.gx8pn7.png/1499752648818.jpg)
In South Australia's case, this hangover becomes dramatically apparent next morning. The sparkling's forgotten as the homeless pack up, scooping their few, pathetic cardboard scraps off the city streets. Or sit there, begging.
It's hugely confronting to see so many people sleeping on the streets in a modern state capital. Particularly one with a Labor government and a Premier that professes to care. He's obviously helpless, without answers to change this new, grim reality.
![The worst of the economic contraction still hasn't hit. That will come when Holden finally shuts its doors in October.](http://web.archive.org./web/20170712152337im_/https://www.fairfaxstatic.com.au/content/dam/images/z/r/c/h/m/image.related.articleLeadwide.620x349.gx8pn7.png/1499752648818.jpg)
The outlook for Adelaide today is bleak.
While unemployment nationally has fallen to 5.7 per cent, in South Australia it's progressively touching new peaks. In April it pushed up from 7 per cent to 7.3 per cent, making SA the only state to record a decrease in employment. This plunged by 5000.
More importantly, however, the ABS stated late last year that the unemployment rate doesn't provide a representation of the total amount of slack in the economy. It insisted the "underutilisation" rate better captures the real picture. In SA that's now reached a devastating 17 per cent. Nearly one in five people is, effectively, ''excess capacity''.
So just as well there's good wine to drown your sorrows, because the worst of the economic contraction still hasn't hit. That will come when Holden finally shuts its doors in October. The car industry will have left the country, replaced by imports.
In the face of this picture of human wastage Tony Abbott's musings are a joke. He's politically irrelevant, except as a malign, destabilising force eroding Malcolm Turnbull's authority. Nonetheless, when he isolates his failure to purchase a nuclear submarine as the "biggest regret" of his period as PM, South Australians must gasp in amazement. Can he really have forgotten that it was his decision to abandon support for the car industry that's led to the demise of manufacturing in that state? Christopher Pyne's moving heaven and earth as he attempts to ensure there'll still be a submarine industry in Adelaide, yet even this won't be big enough or come fast enough to provide the dramatic injection the state needs.
Pyne's other initiative last week provides a better solution to SA's problem. He's allocated $50 million towards a new research centre, devoted to studying autonomous systems for military operations. This is terrific, because this is one of the key areas where we need to be placing our resources and emphasis. The problem is, by its very definition, this won't, can't, do anything to resolve the work crisis. There just isn't enough to go around.
The state government is attempting to staunch the gurgling sound as manufacturing slows, but its only answer is debt funded infrastructure. While this is a start, it won't get the sleepers off the streets and risks adding to the long-term deficit problem. It's like the special bank levy. This is nothing more than an attempt to solve Premier Jay Weatherill's finance problems by exporting them; forcing the rest of Australia to contribute to his own need for budget repair. It effectively exports the state's economic problems to the rest of the country, by adding an impost to borrowers in other states that his own constituents won't have to pay. The banks are fat, possibly lazy, and certainly disliked. This doesn't, however, provide premiers with a licence to add one-off taxes simply because they think they can get away with it.
This is just another sign of how bad things have become in this mendicant state. It's no wonder British billionaire Sanjeev Gupta was greeted with open arms when he rode in to rescue the Arrium steelworks from receivership. This won't merely save 5500 jobs in Whyalla, it offers hope to a state that's been in stasis for over a year since the liquidators were appointed. But they're bound to be disappointed because the glory days of manufacturing are over; never to return.
No other military has felt the need to introduce a service medal for dogs.
Yet not just at the state level, but federally too, there's no acknowledgement that we're in a new world. The old economic levers aren't working any more. Treasurers and the Reserve Bank have been desperately pushing and pulling handles marked ''interest rates'' and ''stimulus'' for years, to no avail. That's because the rules of the game have changed.
It's time to admit that Adelaide is our future: bright for some, yet tragically squalid for others.
We need a new way of addressing the challenges. The first step for recovering alcoholics is to admit they have a problem. Similarly, our politicians and economists need to accept the old models are broken.
This is the reality of our new economic paradigm, and new the introduction of new technologies means it's about to become worse. Much worse.
Nicholas Stuart is a Canberra writer.
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