Australia Can No Longer Be Complacent!

Australia Can No Longer Be Complacent!

.Or should that read, Australia’s federal government can no longer be complacent? Australia approaches Spain as the world’s 12th biggest economy. Data compiled by Bloomberg has Australia’s economy at $US1.379 trillion and Spain’s at $US1.386 trillion GDP – so we should overtake Spain (we probably already have) this September quarter. Australia has been on one amazing economic ride having posted twenty one (21) consecutive years without a recession.

Falling prices for iron ore and coking coal have eroded Australia’s terms of trade – which climbed to a 140 – year high in 2011. “Various global shocks have hit the Australian economy – the Asian financial crisis, the tech wreck, the global financial crisis, to name a few, said Michael Blythe, chief economist in Sydney at Commonwealth Bank of Australia (CBA), the nation’s largest lender. These events would normally tip the economy into recession. But we have bounced through each pothole and come out the other side in respectable shape courtesy of the stimulus from rising terms of trade. The falling export prices mean that some of the “insulation that has protected the economy is fraying.”

Economy looks good, or does it? When we drill down over the last year, mining investment grew 72 percent and the rest grew 2 to 3 percent. Spending in the June quarter was up 5.3 percent on the year before. Australia posted an average growth of 10.3 percent in the mining states and 2.7 percent in the south–eastern states. Spending grew 28.3 in the Northern Territory, 13.4 percent in Western Australia, 7.1 percent in Queensland and 6.4 percent in the ACT. On the flip side, NSW 3.0 percent, SA 2.7 percent and Victoria 2.3 percent.

In a nutshell, the Australian economy grew 0.6 percent over the three months to June this year, which is less than half the rate it grew over the previous period to March 30, which was upwardly revised to 1.4 percent growth.


The standout performer of the week was Malcolm Turnbull – Honesty is the best policy: Turnbull swipes at state of politics and ‘deficit of trust’. “In comments that are bound to be construed as critical of the style of Tony Abbott, as well as Julia Gillard.”It would be fair to assume we will be hearing a lot more about this in coming week’s/months.

What we continue to read and hear in Australia is an economy that is sugar-coated in political speak. I’m definitely no expert however, I agree 100 percent with the Reserve Bank of Australia’s (RBA’s) decision to leave the cash rate on hold. The global outlook is gloomy and the central banks that have a cash rate close to zero are today frozen economies. I would much prefer to have a powder dry cash rate at 3.50 percent over 0.00 percent. Retailers want RBA action as sales dive. It should be noted that the RBA is not a charity – the problem with retail is that its business model is broken and shoppers have moved to the cheaper online models. Retailers need to get their respective heads out of the sand and concentrate on the online models – it is no secret that they were made aware of these challenges many years ago.

Another fascinating week of property statistics where, in Mosman, we have exactly the same number of houses on the market today, as we did in the same week last year. Co-incidentally, this also applied to Mosman apartments. Shock horror, not a great week for recorded sales where Mosman, Cremorne, Neutral Bay and Cammeray could only record just two sales for the week. Having said that, the number of inspections at some open houses last week, was 50 +. So a strong clue there! September will be a very strong month for Mosman housing currency.

Source: Domain Property Monitors

    MOSMAN – 2088

    • Number of houses on the market last week– 104
    • Number of houses on the market this week – 115
    • Number of houses on the market this time 2011 – 115
    • Number of apartments on the market last week – 92
    • Number of apartments on the market this week – 91
    • Number of apartments on the market this time 2011 – 91

    CREMORNE – 2090

    • Number of houses on the market last week– 22
    • Number of houses on the market this week – 17
    • Number of houses on the market this time 2011 – 14
    • Number of apartments on the market last week – 19
    • Number of apartments on the market this week – 17
    • Number of apartments on the market this time 2011 – 34

    NEUTRAL BAY – 2089

    • Number of houses on the market last week – 17
    • Number of houses on the market this week – 19
    • Number of houses on the market this time 2011 – 13
    • Number of apartments on the market last week – 45
    • Number of apartments on the market this week – 45
    • Number of apartments on the market this time 2011 – 79

For this week’s sales in Cremorne real estate, Cremorne Point real estate, Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Neutral Bay real estate, Cammeray real estate.
• Click Here

For this week’s open for inspections
• Click Here

The Gillard government is doing more back flips than the divers at the London Olympics – Carbon tax leaves big polluters better off. That “Elephant – In – The – Room” for the Gillard government will be the electricity bills that arrive this month (September) following the introduction of her Carbon Tax.

Should there be a stampede, watch for not back flips, but belly flops, because it could get very ugly. Having said that, why was Tony Abbott so dumb as to predict that the Carbon Tax would destroy businesses/households when everyone (except Tony) knows that it takes a quarter to filter through?

It has been well documented that electricity prices are like a lightening rod to the voting constituents.

Cheers ^__^

3 Responses to “Australia Can No Longer Be Complacent!”

  • Gordon says:

    It would be bad enough if the federal government was merely complacent.

    They seem to be in complete denial, incapable of understanding the most basic implications of their klutzy decision-making while they trumpet the inane claim that ‘Australia leads the world’.

    Three recent reports point to reality (and some of the problems):

    Industrial disputes have increased rapidly;
    Productivity and competitiveness have declined again; and
    Many jobs are lost because people cannot now be employed effectively.

    The government response from the risibly designated Minister for Workplace Relations, Bill Shorten, is (a) there are no problems; (b) if there are, they are all the fault of someone else.

    Shorten, apart from being one of the self-appointed appointers of the present prime minister, is perhaps best known for his immature and shameless self-promotion.

    This seems an example of the kind of dysfunctional approach that has caused many problems for the Green Gillard government – and for Australia.

  • Gordon – I can understand one stuff up but everything this government touches blows up as a full scale disaster. It is quite apparent that the Unions dictate the terms at Fair Work Australia.

    A budget surplus simply won’t happen either! Unless the likes of Rinehart, Palmer and Forrest start making massive donations to Wayne Swan to ease his accounting discrepancies. Even the *Worlds Greatest Treasurer* can’t add up 🙂

  • David Meadowcroft says:

    Just one question this week…where’s Ann? Hope she’s OK.

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