"No incentive to excel". You don't have a clue. Australia excels in everything we do - sports, science, food, wine, you name it. We also have the same economic incentives you do, namely a free market, and the vast majority of people strive to better their lives just as people do in America. But we care about those at the bottom of the ladder, so we provide a SAFETY NET for them so that they don't have to live on the streets like animals.
See, the difference here is that I've been to your country 4 times - how many times have you been here? We have all the same material wealth and opportunity for excellence that you do, but we show more concern for the fringes of society in recognising that the playing field of life is not even.
You seem to think Australia is a socialist nation - it is not. It's a democratic nation basically ruled by the free market with a welfare safety net.
And when I mentioned capacity constraints I was using economic jargon - what that means is that our economy is so hot now due to the mineral boom that we do not have enough engineers, nurses, doctors, accountants, plumbers, electricians and teachers, we simply don't have enough people in a global labour market. It has nothing to do with "incentive to excel" as you so boldly claim - the incentive to excel in Australians is so strong that they are flocking overseas for the big bucks and to excel even more!
Seriously, let it go. you keep playing yourself. Can't you accept that a country can have a successful free market system and a successful welfare safety net at the same time? We, and many other countries, have proven that you can.