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40 Australia
Australia:
a multi speed
economy
While the economic downturn which began in
the USA and spread to Europe has also had a significant impact on the Australian
financial sector, Australia is in good shape, says Bill Henman National President
Australian Warehousing Association
The “lucky country” has now reached a population
of 23 million with a rich mix of
many cultures and beliefs. It has come a
long way from a convict settlement just over
200 years ago. The “lucky country” however is
not so lucky for some. The economic downturn
which began in the USA and spread to Europe
has also had a significant impact on the
Australian financial sector which borrows its
funds for investment overseas. The Australian
government guaranteed the four major trading
banks to ensure monetary stability and spent
money on a range of projects to stimulate consumer
demand. This strategy has worked so
far. The result being that Australia is in good
shape.
We have a multi speed economy. The mining boom
has seen many companies working in, or providing
services to this industry sector realising good growth
and financial strength. The price for iron ore and coal
is at record levels with China being the major customer.
It is predicted that if Europe slows further, China manufacturing
will also slow resulting in reduced demand for
Australia mineral resources. This boom has seen shortages
in labour in mainly trade skilled areas. A person
driving a dump truck on a mine site earns as a base
A$75000 plus benefits and allowances to round out at
approx $130000 per annum, for a sixty hour week.
This compares to a heavy vehicle driver earning
$55000 plus benefits. This boom has seen a lot of
skilled workers arrive from Ireland.
Australia has a minority Labour government which is
governing with the support of three independents in the
House of Representatives (lower house) and with the
Issue No. 3
support of the Greens in the Senate (upper house). It is
currently half way through a three year term. The government
recently introduced a Carbon tax at $23.50 a
tonne due to commence 1July 2012 for three years followed
by a carbon emissions trading scheme. This was
very unpopular legislation especially in tight times. It is
predicted that energy costs will escalate significantly in
the next few years as coal powered power stations will
need to change to gas or green energy systems. The
government is also introducing a mining resources tax.
This proposed tax was a contributing factor in removing
Kevin Rudd as Prime Minister, the first time in Australia’s
history that such a thing has happened.
Those in tourism are ‘doing it tough’ with an
Australian dollar on parity with the greenback, the flow
from tourists has significantly reduced. This has seen a
reduction in tourists of approximately 40%. It is often
cheaper to travel overseas than holiday at home. There
are many resorts working at half capacity due the high
dollar and a severe cyclone followed by flooding in
December 2010 that did billions of dollars of damage
to infrastructure and property. The agricultural sector
also suffered as banana plantations, tomato producers,
cane farms and dairy farmers were suddenly unable to
operate. Banana prices went from $1.99 kilo to $14.50
a kilo creating a banana index. Prices today are now
around $4.50 as production returns to normal. At the
same time as half of Australia was flooded, the west of
Australia was in drought and experiencing wide spread
bush fires – country of contrasts.
Retail operators have been less fortunate with cheap
goods from both China and India decimating our manufacturing
industry. Australia has four major grocery
chains, Woolworths, Coles, Aldi and Metcash (supplying
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