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40 AustraliaAustralia:a multi speedeconomyWhile the economic downturn which began inthe USA and spread to Europe has also had a significant impact on the Australianfinancial sector, Australia is in good shape, says Bill Henman National PresidentAustralian Warehousing AssociationThe “lucky country” has now reached a populationof 23 million with a rich mix ofmany cultures and beliefs. It has come along way from a convict settlement just over200 years ago. The “lucky country” however isnot so lucky for some. The economic downturnwhich began in the USA and spread to Europehas also had a significant impact on theAustralian financial sector which borrows itsfunds for investment overseas. The Australiangovernment guaranteed the four major tradingbanks to ensure monetary stability and spentmoney on a range of projects to stimulate consumerdemand. This strategy has worked sofar. The result being that Australia is in goodshape.We have a multi speed economy. The mining boomhas seen many companies working in, or providingservices to this industry sector realising good growthand financial strength. The price for iron ore and coalis at record levels with China being the major customer.It is predicted that if Europe slows further, China manufacturingwill also slow resulting in reduced demand forAustralia mineral resources. This boom has seen shortagesin labour in mainly trade skilled areas. A persondriving a dump truck on a mine site earns as a baseA$75000 plus benefits and allowances to round out atapprox $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 ofskilled workers arrive from Ireland.Australia has a minority Labour government which isgoverning with the support of three independents in theHouse of Representatives (lower house) and with thesupport of the Greens in the Senate (upper house). It iscurrently half way through a three year term. The governmentrecently introduced a Carbon tax at $23.50 atonne due to commence 1July 2012 for three years followedby a carbon emissions trading scheme. This wasvery unpopular legislation especially in tight times. It ispredicted that energy costs will escalate significantly inthe next few years as coal powered power stations willneed to change to gas or green energy systems. Thegovernment is also introducing a mining resources tax.This proposed tax was a contributing factor in removingKevin Rudd as Prime Minister, the first time in Australia’shistory that such a thing has happened.Those in tourism are ‘doing it tough’ with anAustralian dollar on parity with the greenback, the flowfrom tourists has significantly reduced. This has seen areduction in tourists of approximately 40%. It is oftencheaper to travel overseas than holiday at home. Thereare many resorts working at half capacity due the highdollar and a severe cyclone followed by flooding inDecember 2010 that did billions of dollars of damageto infrastructure and property. The agricultural sectoralso suffered as banana plantations, tomato producers,cane farms and dairy farmers were suddenly unable tooperate. Banana prices went from $1.99 kilo to $14.50a kilo creating a banana index. Prices today are nowaround $4.50 as production returns to normal. At thesame time as half of Australia was flooded, the west ofAustralia was in drought and experiencing wide spreadbush fires – country of contrasts.Retail operators have been less fortunate with cheapgoods from both China and India decimating our manufacturingindustry. Australia has four major grocerychains, Woolworths, Coles, Aldi and Metcash (supplyingIssue No. 3www.warehousinglogisticsinternational.com