The balance of payments will work itself out! If it goes to high the Australian dollar will devalue thus making imports cost more and if we start running big surpluses the Australian dollar will increase in value thus making imports cheaper and exports more expensive. We are a booming country and dont have enough captial in Australia and or it is cheaper to source the captial off shore, e.g. Japan has interest rates that are close to 1%. Where is it cheaper to take out a loan? Japan or Australia?

Peter Costello should challenge John Howard for the leadership this month. Only he can continue with the success we have been having over the last eleven years. Considering we have sent troops overseas at great cost we can afford this easily. We have been able to continue with the war in Iraq yet it has not harmed our economy. This country has been in safe hands. Our people have got tired only recently of one of our most successful Prime Minister's. We have all prospered spending has been confident and many home owners and investors have done very well with real estate. Most people are looking affluent with new cars and only the best home appliances. John Howard should now stand aside he has served us and his country well. It is time for Tony Abbott, Malcolm Turnball, Alexander Downer and Peter Costello to throw their hat in the ring for us to have a new fresh leader. This has to happen now before it is too late otherwise we will all have to suffer Kevin Rudd and Julia Gillard.

Julie,

I'm sorry, but the top echelon of the Liberal Party is as tainted as Howard, especially Costello, Abott and Downer. Ditching Howard and electing any of those three would pretty much hand the election to the Labor party without a fight.

EasyTimes when will this exchange rate correction happen? This balance problem has persisted for 32years and is now threatens an avalanche. Are we patient or just plain stupid. If the exchange rate goes down now, our debt written in foreign currency goes up by the same amount. We have all heard that fairy tale correction proposition it is now quite obvious that the correction will be a non benign collapse.

Consider this. The current account deficit was 16 billion for the first quarter of 2007. We have run straight deficits for 32 years. The deficit amounts to $54 per person per week, and we are now borrowing to cover this because we do not have many assets left to sell. $54 is the weekly wage of a skilled Chinese worker. This means that our current marvelous prosperity and "boom" is derived not because of a "minerals boom" but because we each have a Chinese slave working for us and we put the slave rental charges on the credit card.

What happens when the Chinese slaves are emancipated. What happens when our creditors finally come to a realisation that they will have to whistle Dixie for their money. This almost happened a few weeks ago.

Both Liberal and Labor governments bear responsibility for this egregious situation.

hello All
This is a good thread.
There is but one trade that screams out to be turned around. It is the backbone of Australia. Our comparative advantage as one of the world` largest livestock producers is envied considerably by those countries unable to supply their own demand for meat.
The Governments market disssstortion are all instances of small strategic moves to fit in with a larger agenda of forein Governments to captire vaule adding, employment andprofit that can be generated from this valable primary resource. These examples also constitue further evidence that there ismorethan just heads of livestock being exported from Australian Shores, when shipments of live cattle and live sheep leave for overseas.
Every feedlot that the Government assist in setting up via the foreign aid programe is yet another diversion of jobs and value- adding FROM Australian economy and community.