2 speed economy
#1
2 speed economy
The resources boom has prompted much discussion of Australia having become a two-speed economy.
Is this a new phenomenon or just another part of the usual cycle?
and if its new, how long do you think it will last?
Is this a new phenomenon or just another part of the usual cycle?
and if its new, how long do you think it will last?
#2
Re: 2 speed economy
It's part of the usual cycle that everyone has to adapt to. It's called free market capitalism.
#3
Re: 2 speed economy
It's not a new phenomenon. It's been going on for years. There's even a Treasury paper in 2008 on this matter but the Gov't and RBA refuse to intervene in the forex market.
http://www.treasury.gov.au/documents...%20economy.htm
http://www.treasury.gov.au/documents...%20economy.htm
#4
Forum Regular
Joined: Feb 2012
Posts: 42
Re: 2 speed economy
only cultures with a strong anti-success mentality like the "law of jonte" in nordic countries are what can achieve relative income equality.
#6
Re: 2 speed economy
Whats also happening at the moment is that many households are deleveraging and increasing their savings to 20-year highs instead of pumping the cash into the economy. it's not as if the GDP and employment were in a freefall.
#7
Re: 2 speed economy
More commonly called "The Dutch Disease" when connected with resource exploitation. Lasts as long as the resource boom does, and takes carefully management if you are not to derail your whole economy. Needless to say, not being well managed in Oz.
http://en.wikipedia.org/wiki/Dutch_disease
http://en.wikipedia.org/wiki/Dutch_disease
#10
Re: 2 speed economy
The money is allowed to unbalance the economy, kinda obviously.
Best approach is not to allow mining companies to make a mint off it, but to put most of the wealth generated into a sovereign wealth fund, investing slowly into other industries within the country and bringing them to a world competitive level.
Best approach is not to allow mining companies to make a mint off it, but to put most of the wealth generated into a sovereign wealth fund, investing slowly into other industries within the country and bringing them to a world competitive level.
#11
Lost in BE Cyberspace
Joined: Oct 2005
Location: Hill overlooking the SE Melbourne suburbs
Posts: 16,622
Re: 2 speed economy
The 2 speed economy does not impress me.
Not everyone works in mining..there are millions elsewhere...
But to that end...I secured myself a mining job... based in Melbourne. Not planned, luck had a big part.
Not everyone works in mining..there are millions elsewhere...
But to that end...I secured myself a mining job... based in Melbourne. Not planned, luck had a big part.
#12
Re: 2 speed economy
The money is allowed to unbalance the economy, kinda obviously.
Best approach is not to allow mining companies to make a mint off it, but to put most of the wealth generated into a sovereign wealth fund, investing slowly into other industries within the country and bringing them to a world competitive level.
Best approach is not to allow mining companies to make a mint off it, but to put most of the wealth generated into a sovereign wealth fund, investing slowly into other industries within the country and bringing them to a world competitive level.
#14
BE Forum Addict
Joined: Jan 2006
Location: Perth, WA
Posts: 1,376
#15
Re: 2 speed economy
It is two speed in a geographical, industry and government sense.
WA and QLD = good geographically, Mining = good industry, Government = federal ok, states and municipals heading for big trouble.
We are fortunate that Australian governments have had the good sense to legislate and build solid super/pension funds (contrast with UK), to run solid surpluses during good times without magic accountancy in the form of public-private shams (contrast with UK) and not to allow the entire country to become as dependent on an industry as risky as financials (contrast with UK).
WA and QLD = good geographically, Mining = good industry, Government = federal ok, states and municipals heading for big trouble.
We are fortunate that Australian governments have had the good sense to legislate and build solid super/pension funds (contrast with UK), to run solid surpluses during good times without magic accountancy in the form of public-private shams (contrast with UK) and not to allow the entire country to become as dependent on an industry as risky as financials (contrast with UK).