Australia

When bad news about Australia's economy hits home

The Myer department store in Melbourne Image copyright Getty Images

As an Australian who has been a business reporter for many years, I can quite confidently say that the timing of bad news on the economy in Australia can be a strange thing.

When Asia had its financial crisis, Australia was fine. When the rest of the world struggled through the the most recent financial meltdown, we were alright.

Australia's unemployment rate and economic growth was the envy of other developed countries. Its Treasurer was named the best in the world, but even then we didn't feel particularly pleased with our lot.

Australians may have a laid back reputation, but we love to complain when it comes to our wallets. And so now the question is, when a run of bad headlines have been dominating the news, do Australians really have something to worry about?


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After riding the mining boom for years, growth is anaemic at just 0.2% for the quarter. The jobless rate is up to more than 6%. China's economic woes mean demand for the commodities being sold are not what they used to be - nor are the prices.

And we've watched other economies heavily dependent on resources - like Brazil and Canada - slip into recession.

The current Treasurer Joe Hockey says there's "no risk" of that happening to us, and he's probably right - at least for now. There's still room to cut interest rates, and the value of the Australian dollar is down. It's hovering around 70 US cents, whereas not too long ago it was playing with parity. The decline is good for exports and should help get the growth rate moving. But there are no guarantees.

Image copyright AFP
Image caption Joe Hockey believes there is no real risk of recession now

And there's also the politics. Political leaders seem more focused on what is being ruled out, like a higher consumption tax, than what is being ruled in. There is no really clear picture of where Australia's future lies after the extraordinary mining boom.

Newspaper headlines tell us we're stuck in the slow lane and going to hell in a hand basket. And yet regular surveys show we are remarkably confident. We are after all, the lucky country.

Image copyright Daniel Munoz

So while Australians love to whinge about the price of everything from property to petrol, if you ask most people how things are over a cold beer at the end of the day, they'd probably still say "she'll be right mate".

But that voice is likely to carry a hint of uncertainty. Whether it's the correct answer is anyone's guess.

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