KEY POINTS:
Australia and New Zealand might be 19,000km away from Britain, supposedly pursuing their vocation as multicultural Pacific powers after detaching themselves from all things British, but the closer you get - as I have in the past fortnight - the more British they still seem to be.
Like Britain, these are societies coming to terms with globalisation, China, affluence, debt and turbo-charged capitalism, and doing so with very similar institutions and culture. The lessons are salutary.
For a start, Britain's economic success, so startling when seen in a European context, looks much more modest compared with what Australia has achieved over the past 15 years. Australia's income per head has grown faster than not just Britain, but Canada, the US and New Zealand. It is the queen bee of the Anglo-Saxon economic world.
Since 1991, Australian wealth has doubled, labour productivity increased by a half, and jobs increased by a quarter. Part of the story is that Australia has benefited hugely from China's hunger for coal and iron ore and the sharp rise in commodity prices, but Australians have also borrowed and spent just like the British, taking their personal debt to record levels.
The results, though, make even London look tame. The architectural ambition of the new building in Sydney and Melbourne is breathtaking. The mineral boom in Queensland and Western Australia is epic, reminiscent of the 1850s Gold Rush.
But like Britain, there are signs that, despite China, things are starting to go wrong. The house-price boom is letting up. There is an escalating story of ill-regulated investment companies going bust, with big losses for individual savers.
Productivity is starting to fall. Private equity companies are stalking the Australian stock market, creating a feverish short-termism. A growing number of Australians are asking where the country goes from here.
It is a question asked even more intensely in New Zealand. With only four million people and even further away from the pulse of global economic life than Australia, it has not enjoyed anything like the same economic boom. Apart from Fonterra, the extraordinary co-operative that successfully markets New Zealand's dairy products, the country has few economic champions.
Foreign companies and private equity companies pick off too many of its dynamic, medium-sized companies. In 2001, a grand conference launched the notion that New Zealand would become a knowledge economy. Six years later, there is little sign of this.
In both countries, this widespread and growing concern about what next is opening up opportunities for the political opposition, despite both incumbent governments having good records in their own terms.
John Howard's Liberal Party in Australia has won four general elections and presided over the boom, but in one poll last week, Kevin Rudd's Labor Party registered a 20-point lead, signalling a huge landslide in the autumn general election.
But in New Zealand, Labour Prime Minister Helen Clark is widely lauded for the way she has rebuilt public services and, especially, steered New Zealand clear of any involvement in Iraq.
But there is scant reward for her pains. John Key's right-of-centre National Party has begun to record 15-point leads for a very similar reason. What is the prospectus for the future?
Key has no answers. In New Zealand, he is seen as a clone of David Cameron, the leader of the British Conservative Party, offering to do largely the same as Helen Clark but offering tax cuts. In the present climate, it may be enough, however vacuous.
Howard's predicament is more acute. He has begun to be seen as too right wing for the times; too aggressive on removing workers' rights; too eager to side with George W. Bush; too reluctant to deal with climate change in a country that is reeling from drought, and too cavalier with public services.
His party needs to move in the same direction as Cameron and Key, but it is far too late. Rudd has the initiative and will not lose it.
But if the right does not have persuasive answers, neither does the left. Rudd's problem is similar to Helen Clark's and, arguably the British Prime Minister-in-waiting, Gordon Brown's. What is the response of the modern left to the question about what to do about modern capitalism? One answer is being provided by a nascent Australian progressive think-tank, Per Capita.
The left must invest in people, design markets so companies deliver public-interest outcomes, extend the polluter-pays principle to every form of economic activity where private companies do not pay for the damage they generate, and start to develop a story about promoting individual wellbeing. It is a fine wish-list, and the ambition can hardly be faulted. The question is, how?
Part of the difficulty is that it is nearly impossible to develop a business sector dedicated to business building and investing in people before the epidemic of private equity deals. Australia and New Zealand, brutally, have no defences to an endless wave of asset-stripping and financial engineering.
If parties of the left have nothing to say about how ownership responsibilities should be discharged in modern capitalism, or how workers should respond, they are only able to talk about improving public services.
As long as globalisation carries on and the world economy swings up, answers can be deferred - to a point. Australia could hardly have done better over the past 15 years, but people still want a sense of direction, a story about how their own lives are likely to develop supported by a national community with a shared sense of destiny.
Globalisation, as New Zealanders and Australians can testify, can raise your living standards, but it feels an illusory prosperity without secure foundations.
The message from Downunder to Prime Minister-in-waiting Mr Brown could hardly be clearer - New Labour as a successful Anglo-Saxon incumbent government could face the same challenge from a resurgent opposition as Howard and Clark.
It is not that the right has a better or even good answer to the questions of our times. It is that the modern left, unless it is prepared to say something concrete about how it wants the economy to look in the future and takes steps to shape it, has little to say either. And if it's the incumbent government, the consequence is staring it in the face.
- Observer
* Author and columnist Will Hutton was in Auckland for the Writers and Readers Festival, talking about his latest book Writing on the Wall: China and the West in the 21st Century.
