Australian government is one of the most frugal among the OECD:
These revenues and expenditures above by Australia are from 2005. The balance sheet looks similar in 2011. Australian government consumes a smaller portion of GDP than majority of OECD countries, and operate with a small surplus.
Two additional factors help Australia, location near hot Asian markets, and a relatively light regulatory burden.
Europe and US are suffering from a number of ills of being rich and lazy: excessive regulation, high taxes, relatively inflexible labor markets in EU, and prohibitive social spending.
Australia, on the contrary, does not even have a social security tax. They have not had the time to accumulate all the warts of a old democracy, including tax code, which is too cumbersome even for the IRS, activist EPA, not to mention about $100 trillion of unfunded liabilities in the US alone.
Australia has a bright future, and is benefiting from the implosion in Europe by acting as a magnet to young, mobile professionals. This trend will only accelerate as fiscal crisis continues, and also with the ageing of population in Europe ages. Traditionally, this used to be America's role, but it is no longer the top destination for your professionals. That title belongs to Australia now.
The Australian stock market has a lot of potential also. The average Price/Earnings of Australian stocks is about 15, close to half of that in US, which became relatively expensive in the mid-80's as shown below.