Australian Economy

The Australian economy set a world record in March 2017. Recession free for nearly 26 years. Around the same time, Australian households also established a record…the most indebted in the world.

The Australian economy was a major beneficiary of China’s decades long economic transformation. Chinese demand for resources led to a mining boom that peaked in mid-2012.

When the mining boom collapsed, the Australian economy was thrown a lifeline by the RBA…in the form of ever lower interest rates. Australians were encouraged to borrow to keep GDP growth positive.

While this has worked to an extent, it’s also lead to Sydney and Melbourne property markets becoming amongst the most expensive in the world.

Australian Economy News, as it comes

In Markets & Money we work to connect the dots on the Australian economy to give you a clear picture. And part of that picture is connecting record economic growth with record debt, and record home prices.

wages growth slow in australia
Why Lousy Aussie Wages are the Union’s Fault
Enterprise Bargaining Agreements, something which industrial unions are big supporters of, allow you to get the same wage increase every year. The problem is that collective wage haggling may not be working out for the Aussie economy. The unions that ‘protect the people’ with wage increases each year are actually ending up with smaller increases annually.
interest rates could go lower
Get Ready for Even Lower Interest Rates
National Australia Bank has a consensus view that the RBA will start increasing the cash rate around August. But there’s a problem with that line of thinking. Just because rates have been at records lows doesn’t mean they can’t go any lower. For one, there’s the Aussie property market to think about.
Aussie retail industry collapsing
2018: The Year Aussie Retail Collapses
The Australian PSI retail trade index shows a drop to 44.5 in December. Anything below 50 indicates a decline in trade, and anything above that indicates industry growth. 2018 may be the year that Aussie retail finally falls flat on its face.
Aussie dollar heading towards a downturn
The End of the Strong Aussie Dollar
The Aussie dollar is getting a boost from stronger commodity prices. Recent price rises have helped push the dollar higher. In my view, I think it pays to watch what the Aussie dollar does this year. The Aussie dollar has had a strong start to the year. However, it may be more cyclical than anything to do with the underlying strength in the Aussie dollar.
bear market approaching
Beware of the Bear Market
Wherever you looked in 2017 it was all bull…not a bear in sight. The Dow hitting records highs. Bitcoin…well, what can you say that has not already been said about this phantom phenomenon: Aussie house prices. When markets are at their most exuberant is when you should be reminded of how nasty bear markets can be.
tax cuts
When’s a Tax Cut Not a Tax Cut?
I’m all for tax cuts, but personal tax cuts are what needs to be on the table. And the issue of fairness needs to be addressed too. Society can’t function when the only people paying tax are honest middle-class workers.
property bubble
Aussie Property Under Attack
Today’s article originally published on 21 June, looks at Australia’s sky-high property prices. A growing number of voices are calling for a crash, seemingly at any moment. But you may be surprised with your editor Shae’s conclusions.
Construction boom
Australia’s Economic Achilles Heel
Today’s article was originally published on 18 August. It looks at Australia’s weak wage growth, optimistic Reserve Bank, and what could be our greatest economic weakness.
blockchain technology
Why Blockchain Trumps the Banks
So far the banking sector has been shockingly ineffective. The Royal Commission is proof enough. It’s time a new solution was put forward to minimise the risk of fraud and deceit. And what could be better than blockchain technology — the infrastructure of which is based around trust?
US tax cuts
How Aussies Can Profit from Trump’s Tax Cuts
The US Congress recently passed a bill to cut corporate taxes from 35% to 21% beginning in 2018. The top individual tax rate will also drop to 37%, down from 39.6%. So how could you potentially profit from the US tax cuts without living in the US?
Aussie dollar news
Aussie Dollar in 2018: Up or Down?
The RBA cash rate, whether higher or lower than in the US, makes little difference to the Australian dollar in the medium term. In my view, when it comes to forecasting the Aussie dollar, the only thing worth following is commodity prices. That’s because Australia is a resource-driven economy.