We do live in the lucky country!

We do live in the lucky country!

Consumer spending grew 0.6 per cent in the March quarter and the lucky country avoided technical recession. Depending on your political flavour, there was lots of political back slapping and back stabbing but more importantly, credit resonated through markets. The ASX 200 soared through 4,000 identifying five consecutive trading days above $5 billion (seven month high) – it was good news week for financial and property markets.

Fort Crumble (NSW government) had another negative quarter (0.2 per cent) and is technically in recession although ‘Premier Please’ remains in denial because the figure excluded exports. I am now focussing on ways to export a politician!

In business, you have to reach your Key Performance Indicators (KPI’s) or it’s simply time to go. Surely the same ethos must now apply to elected politicians. There is no better example than what is happening at Fort Crumble, as the Sydney Morning Herald reported earlier week – “NSW burden drags nation deeper into strife. Business is calling for radical intervention to stop the former premier state’s decline, reports Jessica Irvine, Economics Editor.

Tim Mooney Photography


The decade-long slide by NSW into economic oblivion, if not arrested, may stymie the Rudd Government’s attempts to kick start the national economy out of recession.

The once “premier state” has been going backwards, compared to other states since the Sydney Olympics, on key indicators of economic health including growth, business investment, jobs, home building, wages a Herald analysis of official figures has found.” I have put the main points raised in the article in point form.

  • NSW now contributes less than 32 per cent of the country’s economic production, down from 34.5 per cent just after the Games. An exodus of people interstate has also led NSW’s population share to shrink by 1 percentage point to 32.5 per cent.
  • Even more remarkable has been the slump in NSW’s share of new business investment and new home building activity. Of every dollar businesses spend investing in new equipment and buildings, NSW accounts for just 23 cents, down from 35 cents in late 2000.
  • And despite being home to one-third of Australia’s population, only 15 per cent of all new home-building takes place in NSW. The state approved just 1558 new homes in March, behind Victoria (4023) and Queensland (2052).
  • NSW’s jobless rate remains consistently one of the highest in the country and the traditional wage premium NSW workers enjoyed over other states has all but evaporated. In late 2005 NSW employees earned $3500 more a year than the national average. Now it is just $500.
  • Of $8.5 billion in transport spending announced in the federal budget on May 12, Sydney received just $91 million for a study on the West Metro, compared to $3.2 billion for a Melbourne rail project”.

Ouch! Brilliant investigative reporting. Now imagine if employment contracts were based on KPI’s. The vast majority of those in NSW government would be unemployed. Simply put: no longer can they remain a protected species especially when the state’s Budget deficit is announced on June 16. Fort Crumble is suggesting $1 – $2 billion some economists are already suggesting a massive $6-$8 billion deficit.

Should this be the case, NSW has then moved from critical to life–support where again, the once “premier state” is trading insolvent with a business plan outlined on the back of a postage stamp.

With Fort Crumble in a “state of shock” following Ruddy Fantastic’s Nation Building snub – it was somewhat ironic that it leaked (prior to Budget night) its approval of major road projects totalling $4.4 billion. For obvious reasons the approvals only apply to Labor seats because, after all, it is all about re-election.

Key Performance Indicators in NSW have been replaced by Key Political Intervention where a politician earns more in government than in opposition. Cash for votes are alive and well in NSW politics – although around the corner where Struggle Street meets at the intersection of Rage Road, our esteemed Premier, ‘Nathan Please’ has a problem with his unions. A bummer for Treasury as the unions flatly rejected a suggested freeze of the state’s public sector wages – teachers, nurses and police – better known as a Key People Indicator.

The same can’t be said for Ruddy Fantastic’s first home buyers grant. High beaming himself in parliament this week, he announced that a record 18,736 punters took up Labor’s offer in April. In past editions I have previously likened this grant to throwing lollies onto a highway – there will be casualties. For example: back in economic growth times, south-west Sydney identified home price collapses of around forty per cent – yet in recession (until this week) these very same areas are now in (Chk Chk) boom mode.

Ruddy Fantastic advised parliament this week that 18,736 excited homeowners took up Labor’s cash for letterbox incentive in April. This is much like the Federal budget’s spend plan – spend now and pay later. After all it’s only money and the artificial insemination of property markets has subprime written all over it. Just that this time around, we have the Australian version.

The Reserve Bank of Australia (RBA) left the cash rate at 3.00 per cent this week where we remain at 1969 equivalents. Forget Struggle Street and Rage Road, when rates do go up (and in all probability this will happen around July/August next year). For many inductees into the property market, this will result in Road Kill (depending on respective loan agreements) as our economy moves from deflation to inflation mode.

What inflated this week were our subscriber sales which jumped last week from$848,794,010 to $859,094,019. In total, we exchanged $ 13,905,000 worth of properties. As I suggested over a month ago, the market has bottomed and purchasers and vendors are now engaging (we don’t make these figures up – they actually happen). The big online businesses are leading the way!

Another great (free) daily read launched on the Internet this week www.thepunch.com.au from the News Ltd online stable. This week’s YouTube is Rove’s explanation on how Australia avoided recession (turn your speakers up) – very funny.

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and Cammeray real estate sales http://www.rwm.com.au/news/

4 Responses to “We do live in the lucky country!”

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  • David says:

    There’s a certain “Jeremy Clarkson’ish” about your analogies but for the fact that you haven’t involved Grannies yet, I like it.

  • BobMarche says:

    Thanks for the useful info. It’s so interesting

  • Thomas says:

    The Lucky Country… as a friend in Denmark told me: ‘Lucky is for gamblers.’ Australia has forgone all in the pursuit of greed and individualism. If my belly is full but the guy next door has an empty stomach, Aussie mentality is now that he can starve. I’ve lived in Denmark for the last 10 years and won’t be returning to Australia. Yes, Australia was once a very lucky country, but now I come back to visit family on holidays, I just see Aussies going blindly down the road of the USA. Good luck.

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