© 2019 by Henry Thornton. 

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Australia's economic situation

February 23, 2020

 

So far Australia's leaders have hung tough.  Like the ever optimistic governor of the RBA, Philip Lowe, all will be well.  This is despite the pandemic from China, the Bushfires, the drought, low consumer spending, hesitant business investment and the global slowdown.  Latest domestic news has a fall in employment. Employment statistics are erratic and require three moves in the same direction to be helpful, so we need not become nervous nellies because of this bit of news. But two more employment hits will signal an economy on the cusp of recession.

 

 Despite the global and Australian economic weakness, the government of Scomo and Josh keep telling Australians all is well and for goodness sake spend more, especially consumers. This is despite the RBA's unnecessary rate cuts reigniting the house price boom.  With many Australians overcommitted to debt and new house sales and prices increasing house price loans, this situation will become worse. Imagine the concern of over-indebted consumers if the general expectation arises that jobs are about to be cut.

 

Should households follow the government and spend, spend, spend? Or should Australia take a spending holiday and reduce household debt?  Perhaps the government should advise people to take care and allow for the possibility of recession, due to the global slowdown, reduction of export sales, especially to China and the unexpected effect of a potential global pandemic.

 

Australia has been 'recession free' for 27 or is it 28 years?  Look at the per capita GDP statistics, gentle readers, around three recessions in three decades in per capita terms.  Excess immigration has allowed actual GDP growth to stay positive, at the cost of highly crowded roads, especially in the major cities, insufficient government services, companies underpaying staff (and in some cases overpaying staff) due to lack of competent financial staff and a massive supply of poor quality high rise flats, many with illegal and dangerous easily burnt cladding. By the way, State governments or big city manager, who is planning to correct this situation?

 

And what about care for the elderly and disabled, Mr Morrison? And special needs children. Surely government money is being stretched to breaking point and many people think services for these people will become progressively worse. And what about welfare?  Your government is thinking, or may have already decided to allow, overseas people to come with three years of visas provided such visa holders work for specified times.  I heard that there is one area where 23 % of Aussie youths are on the dole.  What about imposing an equivalent set of work requirements to those on young folk from overseas?

 

Then there is the rapidly rising cost of defence requirements. Consider submarines.  Who was the genius who decided converting French nuclear submarines into diesel-powered submarines mostly built in France rather than mostly built in Adelaide, where industrial knowledge is so powerful? Do I recall an initial cost of $50 billion, now $80 billion? Luckily we are still able to improve airfields in the Northern Territory so that our brand new warplanes can take off or land, but if those planes do not greatly exceed the original cost, I shall congratulate President Trump.

 

Plenty of issues to handle, Mr Morrison. Slow down and devise a plan to cover welfare as well as defence. Not to mention climate change, the cost of which is likely to become very large indeed.  Even if the rising global temperature is not due to CO2 and methane, if the world is going to live in decent comfort something will need doing if temperatures keep rising. Or falling. Remember a mere few centuries ago there was a 'little ice age'?  Was this caused by lack of CO2 and methane in the atmosphere?  So why are we so confident that the rise in the 20 th century was caused by gas in the atmosphere?

 

Sporting life.

 

As we await to footy season, we are entertained by women's and men's short run cricket, rugby league games, and wasn't the indigenous Rugby game between indigenous Maoris and Australia's First People a ripper?

 

Soon the ladies footy will be over and the men can get stuck into it. Why are the ladies games not played for full seasons as preludes to regular AFL games?  A great treat to attract people to the game, and provide an outlet for the ladies for a proper season each year.

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