denzil73

Unless you keep very up-to-date on the financial world across the globe and a good understanding of global economics then most of what people say is just dust in the wind.

One thing that is known is that the UK is mainly a services and speciality provider whereas Australia is mainly a minerals provider. So when the fat cats screw up with their virtual money schemes and the stock market crashes globally companies and people alike won't want to spend extra on services and speciality items but will still need minerals for power and pharmaceuticals etc.

Hence if you don't have a needed commodity then your currency will suffer.

Now that the effects of the GFC have mainly subsided the service providers and speciality providers are back in demand and hence the scales tipping back the other way.

commonwealth

almost 70% of the Australian GDP is from services. in fact, Sydney contributes more to the GDP than the entire Australian mining industry.

Beoz

To be fair, hockey would pass as a union leader, if I didn't know otherwise. He's not the typical boring old liberal treasurer we'd expect.

OzTennis

There's a difference of course between employment by sector, GDP contribution by sector and contribution to export earnings by sector.

Primary industry employs roughly 3% of the work force in the UK, 5% in Australia (2.9% agriculture, forestry and fishing, 2.1% mining).

Secondary industry employs roughly 25% of the work force in the UK, 19% in Australia.

Tertiary (and the new quaternary) industry employs roughly 72% of the work force in the UK, 76% in Australia.

It is accepted that a low % of the work force making goods and high % of the work force providing services is typical of a highly advanced economy.

A much higher % of export earnings comes from mining in Australia whilst in the UK a lot of export earnings comes from invisibles (financial services - Lloyds of London, banking etc).

The mining sector which provides 2.1% of Australian employment contributes 56% of Australia's export earnings (services 18%).

Australia has a bigger service sector employment and GDP wise but the mining sector is punching well above its weight in trade whilst in the UK its invisibles doing much to redress the trade deficit.

denzil73

Why thank you for statistically backing up my summation

commonwealth

much of the value of the currency depends on local conditions as well, as it affects the interest rates. when interest rates go up (e.g. due to a strong inflation coming from improving domestic economy) relative to another country, the currency will usually appreciate.

denzil73

True but still the main reason Oz faired so well in the GFC is due to it's strong exports.

OzTennis

It helped but rather it was because the banking sector was less exposed (i.e. more prudent and sensible) to toxic loans and irresponsibly risky behaviour as in USA and UK etc. They also had fewer takeovers of banks in other countries prior to the GFC.

jad n rich

Rudd was also handing out billions upon billions in free money.

Anyone with kids was being pumped cash thousands at a time to keep the economy up. Rudd was a hero

Now it budget time and those billions have to be clawed back.

Beoz

It mean f88k all in the grand scheme of things. Except for the bogan who his vote depended upon.

commonwealth

i think Rudd gave away too much. he should kept it at minimum just to keep us out of recession. the mining boom was there to save us anyway.

Beoz

Read between my lines. That's what I said. Where's Garry when you need some oppostition

GarryP

You rang?

Nope. Doesn't work like that, no matter how much certain people with an agenda might like to imply.

Because the economy didn't tank, the tax receipts kept afloat and the centrelink payments didn't blow out. Much of the money went into infrastructure projects, employing people in Australia, who then pay tax.

If you'd like to blame someone, blame those who wouldn't implement effective mining taxes, who got in the way of the ETS after previously being for it, and who really want to give away massive handouts - to well off women to leave the workforce and have babies...

Hmm, well that didn't work out well, did it. Much cheaper to buy a few newspapers and TV stations and get them to push out the message you want - the mouthbreathers will believe anything, if you say it often enough.

And don't you think second guessing a policy that objectively worked; that kept Australia out of a deep recession that the other austerity-ladden western economies suffered from; is an bit, well, daft? A resource sector is no protection from the country going into recession - as Australia has demonstrated in the past. And if China hadn't pushed similar policies to keep their demand afloat - where would we have been.

The problem isn't with Labour policies of spending during a recession - that objectively is the right policy. Nope, the problem is with continuing to spend stupidly when the times are good. Money should go into infrastructure and R&D in the good times, and paying down the deficit; not handouts to the unproductive (eg maturity leave, baby bonuses). That was the time to fix the Australian automotive industry, not to prop it up, but to reform and revolutionise.

Beoz

Yep, handouts for the unproductive is bottom of the bucket. Got to be careful on the maternity handouts. These mothers may have been in work, and may be going back to work. Some mothers may be on big money. Big money means big taxes.

I have a big problem with this means testing crap. Why should big earners be entitled to less when they have paid more tax than those who receive the larger handouts. A fair system would be one where the more you put in the more you get in return.

GarryP

So get them back earning within a reasonable time!

I personally think you should say to every individual "Over the course of your life you can have 6 months of paid leave, paid by the tax payer. When you take it, and why, is up to you". That would make more sense, as well as not being discriminatory.

Who said means testing? I just said they should get a set amount - that's it. No large payouts to those who are already one the best salaries and are more likely to be able to afford it.

And actually I'd scrap baby bonuses etc. entirely - a hangover from a bygone age. Rather after two you start getting taxed more to encourage you to tie a knot in it.