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The Forum > General Discussion > Is the Australian Economy really in good shape?

Is the Australian Economy really in good shape?

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If the foreign account deficit is as constant as it is month after month, while Australia is exporting the most amounts it ever has, how can the economy be in good shape? If you are exporting the largest dollar amounts ever have wouldn’t this be the time to be in front? The pure luck Australia has in the global demand for resources combined with our keenness to dig it up and sell it as fast as possible, for other more innovative countries to value add to them and make a larger profit per ton of resource must be the most short sighted approach to building the wealth of a nation in history, given the talent available locally to value add. Combine this with a once in a lifetime housing boom that has created a false sense of wealth, the Australian economy cannot survive with the prosperity that it currently has the illusion of providing. What will happen to the economy when the global demand for resources is reduced?
Posted by pmikkels, Tuesday, 30 January 2007 1:09:13 PM
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A week or two ago the headlines in the West Australian was that house affordability was out of reach for many. Today horror horror the economist are horrified that prices might drop by up to 20 per cent. There is as much science and honesty in the assesment of the economy today as their is in the global warming (sorry climate change) debate. All I can say is that anybody who wants a job head West. If you can breathe and show up for work you are needed. That is good news. We are importing skills from PNG, Phillipines, South Africa etc etc. These skills include cleaning, cooking and driving machinery. If our economy isn't good now I would hate to see the amount of wealth in good times.
Posted by runner, Tuesday, 30 January 2007 2:07:17 PM
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Its a house of cards, in any event.

Thankfully the casino operators can keep minting chips and that seems to keep the punters happy.

Just dont expect to redeem your winnings when the bills come due.
Posted by trade215, Tuesday, 30 January 2007 6:04:59 PM
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Lots of opportunity to spend money, more than ever before.

Lots of opportunity to earn money, more than ever before.

Is the economy in good shape?

Well if you are smart and have energy it has never been better.

If you are not smart or lack energy, it is no worse than it has ever been.

There is nothing worse than an economy in recession, except in depression. The one good thing which the incumbent government has delievered is a sustained economic performance which means the cycle of recessions which we experienced in the post WWII - 1990 period has been broken.

Sure, some private individuals are borrowed up. Their security is being used, they are grown up enough to decide for themselves.

When it is public debt, the problem is different, vested interests spending taxes on indulgences and junkets like nationalised industries and loss making sheltered workshop for unionists is no way yot run an economy.

This government has it right, leave people to spend on their own account and leave them with more in their pocket instead of directing funds through taxes into indulgences as noted above.
Posted by Col Rouge, Tuesday, 30 January 2007 6:35:51 PM
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Yes there are many opportunities right now, nobody can argue this. The question is, are these the right opportunities for a sustainable and prosperous future. Will Australia be another Nauru? Well maybe not. The Government has done so well by cutting back public spending to reduce the pubic debt but is this at the expense of the future generations. Most mortgagees can sell there house to pay off there dept (most!!). Now we must decide what the government is for?? Is the government there to hand out natural resources as fast as companies can apply to exploit these opportunities? Obviously, during the resource exploitation stage there is prosperity for all involved, government, company, employees and share holders alike. Now lets not forget the government did not create the natural resource or the global demand, they got lucky. Sure the government facilitated the availability for these resources to be used. Or is the government there to give a framework for society as a whole to function in a sustainable and prosperous future (or at least the vast majority of people). Now it seems that instead of directing funds through taxes into indulgences government is giving resources away. (Any vested interests??).

Regarding unions and the protectionist mentality that has prevailed in the past, and has proven to create lazy industries, I think all but the diehard trade unionists will concede that this can never happen again.

Now what about the skilled shortage that is currently talked a lot about, and I am unsure to what extent it exists.
Scenario
1) 10 years ago the government planned the resource boom, but due to incompetence did not plan for the people to exploit it.
2) The resource and housing boom fell into the governments lap, and did not realise that skilled people are needed to fully exploit the boom until now.
3) Or skill shortage is another way to reduce the labour costs to companies by claiming the unavailability of local workers and importing foreigners.
Posted by pmikkels, Tuesday, 30 January 2007 7:58:17 PM
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pmikkels:

You are right with your scenario 3. The Howard government, in partnership with private enterprise, has already succeeded in socially engineering a financially unstable employment "market" - (what happened to employees?) They are insecure, afraid, cowed and depressed (tried to get a mortgage from a bank lately, when you say you are a casual worker ?)

Their overall objective is to subjugate the workforce in order to maximise profits to the business owners, whilst driving down costs (i.e. employees wages) to the level of the Chinese peasant (about USD500 per year I am told). Economics 101.

If all else fails, threaten them with the sack and/or replacement with cheap foreign labour (er.... those Chinese peasants again).

Simple really !

Why do we put up with this sh!t?
Posted by Iluvatar, Wednesday, 31 January 2007 10:05:03 AM
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