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Australia - fantastic performance, great place to live

Australia - fantastic performance, great place to live

Old Nov 24th 2002, 3:31 pm
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Default Australia - fantastic performance, great place to live

http://news.independent.co.uk/busine...p?story=355086

Sydney – Start with a question: which of the large developed economies seems to be growing fastest through this global downturn? The answer is Australia. It is followed by Canada, the US and the UK. This leads to another question: why is it that English-speaking countries seem to be pulling clear of the pack?

The latter question is enormously important, for if the English-speaking world has a real lead on the rest, then this will have a profound impact on economic policy – and power – in the coming years. If, on the other hand, we have been deluding ourselves by living on borrowed money and time, then we are in for some nasty surprises.

A brief visit to Australia has suggested to me some admittedly tentative answers. The Aussie story is fascinating because of the parallels with other anglophone countries. As in the US and UK, demand has been supported by consumers, whose enthusiasm has in turn been supported by a strong housing market.

However, unlike the US and UK – but like Canada – Australia has also benefited economically from a relatively weak currency. Like Canada, it feels to the visitor very good value. Unsurprisingly, Sydney is full of Japanese tourists. The sheer physical oomph of the place – at a price which is roughly half that of Tokyo – is a powerful draw. But the big source of demand is domestic and supported by house prices.

As a whole, house prices are up 17 per cent year-on-year, with hotspots like Sydney and Brisbane up by 23 per cent and 26 per cent respectively. This pattern is very similar to the UK. The Australian Prudential Regulation Authority, fearful that the bubble might get out of control, recently asked building societies to review their lending practices and reminded banks that they should be conservative in their risk management.

Still, despite the potential impact of a house price crash, forecasts for growth next year remain pretty good, with business investment and exports taking over from any slackening of domestic consumption. The new OECD projections for both this year and next are shown in the left-hand graph above. Not only is Australia on top this year but it is also expected to be top next year, actually improving a bit.

The Australian government thinks these figures are too good and is projecting growth of about 3 per cent for 2002/3. It has warned that the OECD has not made sufficient allowance for damage caused by the current drought. Meanwhile Brian Redican, senior economist at Macquarie Bank, expects growth of 2.75 per cent. But even that would be extremely good by world standards. People here fret about the global downturn, and some industries, such as tourism, are suffering. In relative terms, though, the country is performing exceptionally well. So what is Australia doing right?

I think the general answer is that, like the other anglophone economies, it has the anchor of consumers who like living well, economic governance that is prepared to allow such demand to show through in a current account deficit, and policies that attract inward investment to cover that deficit. In the case of Australia, the current account deficit is 3 per cent of GDP, which compares with some 4 per cent in the US and 2 per cent in the UK.

A current account deficit is the inevitable counterpart of a capital account surplus. That inflow of capital increases the potential growth rate, which in the case of Australia is probably more than 3 per cent a year. So a virtuous circle is secured.

There is a further factor here: Australia, like the US, is a country of immigrants. The latest UN projections for population growth in a selected group of countries are shown in the second graph. Australia is expected more or less to match the US, adding nearly 40 per cent to its population over the next half century. (You can see why it is concerned about uncontrolled immigration, by the way, by noting the projection for nearby Indonesia.) Countries that increase their population will inevitably grow faster because an expanding population requires investment in housing and the infrastructure to cope with this.

Such growth does not necessarily show in rising income per head. Australia has slipped down the wealth league, from being one of the two or three richest countries in the world a century ago to being, on paper if not in reality, poorer than the UK now. But growth does allow countries to make mistakes and keep moving forward. Built too many houses? OK, wait a bit and a growing population will mop them up. Over-invested in infrastructure? Ditto.

There is a cushion here that countries that will lose population – like Germany, Italy and Japan – do not have.

This leads to a more general point. It is hard to pin down but there is an openness, an acceptance of change, an acceptance indeed of migration, that characterises the English-speaking world and seems to give it some sort of buffer against hard times. You catch this self-confidence in Australia at the moment. It has, sadly, been savaged by the blow of the Bali bombings, the effect of which continues to reverberate here. But there is a feeling that things will be all right in the end that is also evident in North America and, to a certain extent, in the UK.

It would be silly not to admit that there is a danger here. The relative economic success of the English-speaking world is sustained by current account deficits and personal borrowings. Neither form of borrowing can be sustained for ever. But it is hard not to look at those growth figures and acknowledge that we are all lucky – and Australians especially so
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Old Nov 24th 2002, 5:58 pm
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Yeah - no worries mate.
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Old Nov 24th 2002, 11:36 pm
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Default Re: Australia - fantastic performance, great place to live

Yeah and the burgers are better too (at Hungry Jacks)!! - this is several months old so they may have gone off

Big MacCurrencies

Devised 16 years ago as a light-hearted guide to whether currencies are at their “correct� level, the index is based on the theory of purchasing-power parity (PPP). In the long run, countries' exchange rates should move towards rates that would equalise the prices of an identical basket of goods and services. Our basket is a McDonald's Big Mac, produced in 120 countries. The Big Mac PPP is the exchange rate that would leave hamburgers costing the same in America as elsewhere. Comparing these with actual rates signals if a currency is under- or overvalued.
…. The Australian dollar is the most undervalued rich-world currency, 35% below McParity. No wonder the Australian economy was so strong last year..
Source: The Economist. London

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Old Nov 25th 2002, 3:47 am
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Default Re: Australia - fantastic performance, great place to live

Originally posted by pleasancefamily
http://news.independent.co.uk/busine...p?story=355086

Sydney – Start with a question: which of the large developed economies seems to be growing fastest through this global downturn? The answer is Australia. It is followed by Canada, the US and the UK. This leads to another question: why is it that English-speaking countries seem to be pulling clear of the pack?

Must agree it great here so many ways to earn a living, must get a shot gun.
By the way last time I read bull like that it was about Argentina , what ever happened to them?

TWO employees of a liquor store in Perth's northern suburbs were shot on Saturday night in a botched armed robbery.

The pair were shaken and received minor lacerations to their heads and arms after trying to tackle two robbers who entered the store
demanding cash.
POLICE scuffled in the street with bikies who were thrown out of a Belmont nightclub early yesterday.

A dozen officers went to Studio 7 after reports that members of the Club Deroes were causing trouble at the Belmont Avenue club.

Bikies and police squared up to each other during the confrontation, which forced management to close the nightspot several hours earlier than usual.


AUSTRALIA should slash its immigration intake by about one third because Sydney could not cope with the population spurt, NSW Premier Bob Carr has said.

Mr Carr said 75 per cent of Sydney's total population increase was generated by migration as the bulk of new arrivals settled in the nation's biggest city.

The federal government increased the overall immigration intake from 93,000 to 110,000 people in May this year.

Mr Carr said that meant Sydney had to find homes for 40,000 more people each year - an increase of 3,000.

Sydney was becoming less hospitable in terms of rising property prices, urban sprawl and higher density housing, Mr Carr said.


"We all want a bigger proportion of the migrant intake to settle in regional Australia - in Hobart, in Adelaide and in regional centres," Mr Carr told reporters.

"The pressure on Sydney is too great.

"Now that is fuelling the pressure on housing in Sydney.

"I would like to see a national intake of about 80,000."

NSW is working with the federal government on a taskforce to divert new arrivals to regional centres but Mr Carr said "the policy options there aren't that brilliant, aren't that effective".

He said people were attracted to Sydney's economic and cultural diversity.

"If you increase the intake, if you force-feed population growth into the Sydney basin the city goes up, or the city goes out or a combination of the two," he said.

"We don't want to end up with the density of Brooklyn, we don't want to end up with the sprawl of Los Angeles."

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Old Nov 25th 2002, 4:30 am
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Default Re: Australia - fantastic performance, great place to live

Poorer nations are always the fastest growing economies in the World (they've got more room to improve).. China is The worlds fastest, followed by a few of the other Asian countries. It does not surprise me that Australia is the fastest in the Western developed countries.

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Old Nov 25th 2002, 4:52 am
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A fact overlooked by those who not lived here a long time is this.

Most economic cycles good and bad reach Australia after the rest of the world. I have seen it happen time and time again. What happens overseas generally eventually gets here. Plus in a Country as small as Aus (small in economic terms), something like the current drought will have a more drastic effect than on say the US which has more diverse economies. Just like the fact we will eventually get the products and services available in Europe and the US we will eventually get the problems. I think one just kicking in is Terrorism. If its great here now you can bet your booty it was good in the UK or US two or three years ago.
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Old Nov 25th 2002, 10:28 am
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Uh oh - the three *greatest* experts on Australia have spoken!

Right you lot listen up...

All those trying to go to Australia - give up now and go back to your great lives in the UK

All those POMS(and welsh, scots, irish, etc) - what do you think you're playing at eh? Open you eyes, pack-up and leave now!
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Old Nov 25th 2002, 4:08 pm
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Cheers madmancunian,

I'm putting a stop to my application asap - don't want to end up in a dead-end place like Oz, what with all those liquor store hold-ups and drive-by eggings. I'm staying put in this cottonwool environment where kids can skip to school without a care in the world and little old ladies can invite the "gas man" in without asking for ID. Thank God the liquor section of Tesco is surrounded by cat food and baby products - enough to put off any would-be thieves.
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Old Nov 25th 2002, 9:15 pm
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Default Re: Australia - fantastic performance, great place to live

Originally posted by Ceri
Poorer nations are always the fastest growing economies in the World (they've got more room to improve).. China is The worlds fastest, followed by a few of the other Asian countries. It does not surprise me that Australia is the fastest in the Western developed countries.

Cheers
No it's not - Turkey currently is. However that's probably a moot point so perhaps you can explain why, in the developed world, after Australia, the US and Canada had the highest GDP growth in the past 12 months?
The Economist. London (Nov 8-15th 2002)

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Old Nov 26th 2002, 2:06 am
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Default Re: Australia - fantastic performance, great place to live

Originally posted by dpr21
No it's not - Turkey currently is. However that's probably a moot point so perhaps you can explain why, in the developed world, after Australia, the US and Canada had the highest GDP growth in the past 12 months?
The Economist. London (Nov 8-15th 2002)

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Oh Gawd... it's you again! : "Please Explain" you're not related to P Hanson are you?
Well it was China, and it has been China for years, if it's Turkey.. that's recent.

Well Canada isn't rich either, and USA and Britain will always grow to a point... so many foreign investments and companies... like we have in Australia! The Uk is no1 investor here, followed by the USA. The USA is no 1 investor in Singapore, followed by Britain... if these countries grow.. it's bound to knock up ours (these are just a couple of countries.. a drop in the ocean)

Poor nations are always "the fastest growing economies in the world" .. and will be on the top of the ladder (first) for that reason.

Next you'll be saying Australia is rich! Come on, it has not got a quarter of the money that the Uk has lol. Australia has no money to even spend on her defence force. They buy second hand weaponry off Britain... and are completely ill equipped! Have you forgotten the noisy sub they bought .. lol! .. tried to cut costs, went with a cheap firm , Switzerland I think... totally cocked it up! . Gulf war.. one supply ship in international waters... no weaponry you see.. poor!
Fires last year.. Australia had to get Elvis over from the US, why have they not got a few of these themselves? .. Australia should be very well equipped for fighting fires, they should be leading the world in that respect.. but they are not equipped properly... what about the radios, which was one of the reasons for the deaths of some firemen last year... lost communication.. cheap radios! The police had good ones , but the firemen didn't.. .

When Japan crashed... it had a huge effect on Australia, the Aussie dollar went down heaps... do you know it did not effect UK, hardly touched her.

Australia does rely on farming too much, where the UK and Germany it's engineering, and foreign investments.
The Aussie economy is not stable, it's not strong .. Australia is a very poor cousin to the UK and the US.. and basically the term " fastest growing econemy" is dim gwerth rhech dafad! (not worth a fart) sounds better in Welsh

Cheers

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Old Nov 26th 2002, 3:09 am
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Default Re: Australia - fantastic performance, great place to live

Originally posted by dpr21
No it's not - Turkey currently is. However that's probably a moot point so perhaps you can explain why, in the developed world, after Australia, the US and Canada had the highest GDP growth in the past 12 months?
The Economist. London (Nov 8-15th 2002)

DPR
In Australias case its of any move up from the bottom looks good, both US and Canada have been on a down turn .
The same worthless crap that is being said about Australia was not long ago being said about Agentina and what happened now?
This country is run along the same lines , all it needs is a dictator , sorry it has one step forward little Johnny.

From 1990 through 1997 Argentina's economy grew by almost 51 percent in constant terms.

In 1997, GDP growth ran at a very positive 8.1 percent in real terms,

Growth in industrial production was 6.5 percent for the year 1996.

Throughout the late '80s and early '90s Argentina ran a substantial, though artificial, trade surplus.




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Old Nov 26th 2002, 4:41 am
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Default Re: Australia - fantastic performance, great place to live

Originally posted by Ceri
Oh Gawd... it's you again! : "Please Explain" you're not related to P Hanson are you?
Well it was China, and it has been China for years, if it's Turkey.. that's recent.

Why don't you keep to the 'facts' or some relatively 'reliable' or at least vaguely impartial source to make your points? I'm sure you can find something 'published' to refute my point(s) rather than your own subjective, emotive and in most cases spurious personal views. It is not China, and no I'm not related to Hanson - and anyway what relevance would it have to this particular discussion?
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Old Nov 26th 2002, 5:44 am
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Default Re: Australia - fantastic performance, great place to live

Originally posted by pleasancefamily
http://news.independent.co.uk/busine...p?story=355086

Sydney – Start with a question: which of the large developed economies seems to be growing fastest through this global downturn? The answer is Australia. It is followed by Canada, the US and the UK. This leads to another question: why is it that English-speaking countries seem to be pulling clear of the pack?

The latter question is enormously important, for if the English-speaking world has a real lead on the rest, then this will have a profound impact on economic policy – and power – in the coming years. If, on the other hand, we have been deluding ourselves by living on borrowed money and time, then we are in for some nasty surprises.

A brief visit to Australia has suggested to me some admittedly tentative answers. The Aussie story is fascinating because of the parallels with other anglophone countries. As in the US and UK, demand has been supported by consumers, whose enthusiasm has in turn been supported by a strong housing market.

However, unlike the US and UK – but like Canada – Australia has also benefited economically from a relatively weak currency. Like Canada, it feels to the visitor very good value. Unsurprisingly, Sydney is full of Japanese tourists. The sheer physical oomph of the place – at a price which is roughly half that of Tokyo – is a powerful draw. But the big source of demand is domestic and supported by house prices.

As a whole, house prices are up 17 per cent year-on-year, with hotspots like Sydney and Brisbane up by 23 per cent and 26 per cent respectively. This pattern is very similar to the UK. The Australian Prudential Regulation Authority, fearful that the bubble might get out of control, recently asked building societies to review their lending practices and reminded banks that they should be conservative in their risk management.

Still, despite the potential impact of a house price crash, forecasts for growth next year remain pretty good, with business investment and exports taking over from any slackening of domestic consumption. The new OECD projections for both this year and next are shown in the left-hand graph above. Not only is Australia on top this year but it is also expected to be top next year, actually improving a bit.

The Australian government thinks these figures are too good and is projecting growth of about 3 per cent for 2002/3. It has warned that the OECD has not made sufficient allowance for damage caused by the current drought. Meanwhile Brian Redican, senior economist at Macquarie Bank, expects growth of 2.75 per cent. But even that would be extremely good by world standards. People here fret about the global downturn, and some industries, such as tourism, are suffering. In relative terms, though, the country is performing exceptionally well. So what is Australia doing right?

I think the general answer is that, like the other anglophone economies, it has the anchor of consumers who like living well, economic governance that is prepared to allow such demand to show through in a current account deficit, and policies that attract inward investment to cover that deficit. In the case of Australia, the current account deficit is 3 per cent of GDP, which compares with some 4 per cent in the US and 2 per cent in the UK.

A current account deficit is the inevitable counterpart of a capital account surplus. That inflow of capital increases the potential growth rate, which in the case of Australia is probably more than 3 per cent a year. So a virtuous circle is secured.

There is a further factor here: Australia, like the US, is a country of immigrants. The latest UN projections for population growth in a selected group of countries are shown in the second graph. Australia is expected more or less to match the US, adding nearly 40 per cent to its population over the next half century. (You can see why it is concerned about uncontrolled immigration, by the way, by noting the projection for nearby Indonesia.) Countries that increase their population will inevitably grow faster because an expanding population requires investment in housing and the infrastructure to cope with this.

Such growth does not necessarily show in rising income per head. Australia has slipped down the wealth league, from being one of the two or three richest countries in the world a century ago to being, on paper if not in reality, poorer than the UK now. But growth does allow countries to make mistakes and keep moving forward. Built too many houses? OK, wait a bit and a growing population will mop them up. Over-invested in infrastructure? Ditto.

There is a cushion here that countries that will lose population – like Germany, Italy and Japan – do not have.

This leads to a more general point. It is hard to pin down but there is an openness, an acceptance of change, an acceptance indeed of migration, that characterises the English-speaking world and seems to give it some sort of buffer against hard times. You catch this self-confidence in Australia at the moment. It has, sadly, been savaged by the blow of the Bali bombings, the effect of which continues to reverberate here. But there is a feeling that things will be all right in the end that is also evident in North America and, to a certain extent, in the UK.

It would be silly not to admit that there is a danger here. The relative economic success of the English-speaking world is sustained by current account deficits and personal borrowings. Neither form of borrowing can be sustained for ever. But it is hard not to look at those growth figures and acknowledge that we are all lucky – and Australians especially so
"A brief visit to Australia" eh? How brief? Come and live here - the economy in Queensland is, as PB puts it, Third World. Everyone outside Brisbane CBD is scratching a living doing what they can, making the odd buck here and there - trying to save a cent here and there - I for one do not believe Australia has a future as a great world economy - it lacks the right attitude...
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Old Nov 26th 2002, 7:53 am
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We-ell... if PB has pronounced the Queensland economy to be third world it *must* be true.

Scratching a living?????? Get real.

I've not seen any live-aid concerts set-up to help the poor people of Queensland who are only making the "odd buck here and there". Maybe someone out to point this out to Sir Bob (G*ldhof) so that he can setup a concert right away.

And I've not hearing anyone applying to go and live in Ethopia to have a better standard of living.

Jeez I'm learning so much from this forum. Better rush out and buy a hoe to practice scratching a living from the sun-parched Queensland soil.

I think I'm ready for anything now.
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Old Nov 26th 2002, 5:00 pm
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Default Re: Australia - fantastic performance, great place to live

Originally posted by dpr21
Why don't you keep to the 'facts' or some relatively 'reliable' or at least vaguely impartial source to make your points? I'm sure you can find something 'published' to refute my point(s) rather than your own subjective, emotive and in most cases spurious personal views. It is not China, and no I'm not related to Hanson - and anyway what relevance would it have to this particular discussion?


You are totally wrong on your so called facts, and it is obvious you know very little about it.

If you had checked your information from the right data collection source..and not a newspaper.. You'd find Turkey is classed as a Western country for the figures sake (yes it's an east and west country.. but for the world bank, it's classed as West)
Turkey is number one for DEVELOPING WESTERN nations. .China is still WORLDS number one for 2002, and has been for the last few years, among those top ten are Malaysia and Indonesia too. Turkey is not even classed in the top ten of this world list.

You are just confusing and manipulating your own so called quoted Newspaper facts."London Independent"
.Instead of trying to attack and accuse me of something which you are doing and I am actually not, go and collect the right data, otherwise you'll end up getting it totally wrong again as with Turkey.

Resources -
World Bank.
and
Singapore Gov figures

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