Is Australia still the lucky country?

[Johnno]

There's been a lot of talk about Australia who managed to avoid the impact of the GFC and then the talk of the Abbott government budget cut backs, rising unemployment, property and mining booms and busts. Have a read of this....

http://rt.com/op-edge/186308-lucky-country-australia-economy/

Edited September 10, 2014 by Johnno

[BrianJ]

Hi Johnno,

Yes, it seems as if there is an unwillingness to admit to the economic reality of Australia at present.

Also, the imminent collapse of the manufacturing industry in the Melbourne area over the next two years is

going to create huge problems in that region. (Toyota, Holden, Alcoa etc...)

A further concern, is that the huge number of immigrants into Australia are not being curtailed by government.

Why?

Immigration is "easy" money for the Government, and they are not concerned if the immigrant has

to leave after spending their life savings in the country.

example - 100 000 immigrants per year at AUD$ 10 000-00 avg. = AUD$ 10 Billion revenue in the Australian economy.

The catch 22 situation regarding interest rates is going to bite once other first world countries start raising interest rates.

Australia will not be in a position to follow suit, as it will create unaffordability with regards paying home loans and other debt,

which in turn will lead to investment funds leaving Australia.

The Australian Dollar will bear the brunt of this trend.

The high wages in Australia are not sustainable either.

[SurferMan]

Hi,

Dont agree with all that entirely. Aus have long term plans in terms of which types of immigrants they allow. You cant "just" immigrate here, you either need a job offer or be on a Skilled Occupation List. The high cost of getting in here means only financially able people actually get in. As a general rule of thumb, only highly skilled people make it here. On this forum almost all the folk have some specialisation. Yes I agree that does not guarantee work, Im in SAP and have had the odd spot of unemployment. I would say they do care, as they dont want dole bashers and medicare leaners. Once you have PR you are entitled to all this. It makes no sense not to care about 100 000 people per annum if they are going to end up loafers and sucking up social services. If they leave, so do their taxes and net income spend.

Aus may not be perfect, but at least they try to plan their immigration approach and demand. It is a very expensive place to live, and its a personal choice to come here. Africa can keep its violence and crime and general anarchy, I prefer Aus to it anyday. Aus will raise interest rates if it needs to. When you say high wages, Im not sure that follows either. Here in Perth the big guys are cutting rate card numbers. But for in demand skills in SAP its common to see rates of $1400-3000 per day. Those dont go down, they stay up there.

All that said, I feel there is a GFC 2.0 coming, and will make 1.0 look like a picnic.

[Donovan83]

All that said, I feel there is a GFC 2.0 coming, and will make 1.0 look like a picnic.

The problem is that GFC 2 is not in anyone's control. So do you change jobs and get a potential probationary period, or do you stay put because of uncertainty? Do you rent (where 100% of the cash you pay is definitely gone forever) or buy (where you may lose on the capital value of the property and rents around you may drop, but at least you'll get something back) a home? Do you move to Aus where it's safer but more expensive and risky from the perspective of looking for work, or do you stay in SA where you're pretty much guaranteed to end up like Zimbabwe in 8 to 15 years?

I've tried to be mindful but not overly fearful of the problems in the world today. We could end up in WW3. We could end up in GFC 2. Australia might go into recession. But I can't control any of those things, I have to try make the most of what exists today... is it worse to just do nothing and go nowhere because something might happen, or to just do your best with your circumstances?

If things go to pot, you know what? Chances are most of us will be in the same boat and we'd be able to deal with a changed situation. Deal with it or worry about it when it is imminent, for now, enjoy the good days because one day you might look back and wish things could be this easy again.

And that concludes this episode of Dr Phil

[SurferMan]

I loved that post D. Have you ever tried to use the flags and scenarios from www.mindofafox.com ? Brilliant. Me, I would rather be a work rich environment like the east coast, not Perth. Would also like to own not rent, but that is not an option right now. Agree on Africa, would rather pay through my nose in Aus. Also dont watch the issues too much, but do keep a beady eye out for key developments around the world. Things get harder every year in my opinion.

And that concludes the wisdoms of Surferman.

[Johnno]

I know of two senior mining guys (mine engineers) who have been out of work in WA for over a year. One is now looking outside the industry (he's been in mining all his life in SA, UAE and Oz) and the other is working FIFO (Africa) whilst his family lives in Perth. Pretty tough out there....

https://au.news.yahoo.com/thewest/business/wa/a/24934385/geologists-out-of-work/

[Sunnyskies]

I know of two senior mining guys (mine engineers) who have been out of work in WA for over a year. One is now looking outside the industry (he's been in mining all his life in SA, UAE and Oz) and the other is working FIFO (Africa) whilst his family lives in Perth. Pretty tough out there....

https://au.news.yahoo.com/thewest/business/wa/a/24934385/geologists-out-of-work/

More an industry issue than an Australian issue. I know engineers and geologists in South Africa that are struggling with work. But yes, happy days of having jobs thrown at you are gone.

[Johnno]

More an industry issue than an Australian issue. I know engineers and geologists in South Africa that are struggling with work. But yes, happy days of having jobs thrown at you are gone.

Not really. Those working in the manufacturing industry in Aus, like the car manufacturing industry have nothing to do with the mining industry yet the car industry in Australia is toast!

These are other non mining related job cuts that comes to mind.

Australia Postal Service is not directly involved in mining yet they will shed 900 jobs. http://www.abc.net.au/news/2014-06-08/australia-post-to-cut-hundreds-of-jobs-report/5508236

Australian Tax Office: 8000 jobs http://www.canberratimes.com.au/act-news/more-jobs-pain-for-tax-office-20140810-102iua.html

BP cuts 1,000 jobs: http://www.dailymail.co.uk/news/article-83981/BP-cuts-1-000-jobs-refinery.html

ANZ cuts 1,000 jobs in Australia http://www.smh.com.au/business/anz-to-cut-1000-jobs-20120213-1t0uc.html

[Bronwyn&Co]

I think a lot of these job woes are in fact worldwide. It is part of a huge cycle. We just have to take it on the chin...

[HansaPlease]

The media loves stories of large job cuts. Think about it, if all the job cuts that we've heard about over the past few years have not been replaced with other jobs, we would have nobody left working! Companies constantly restructure and shed jobs... Then a while later they quietly replace them in other areas.

My wife worked for a household name here in Aus. She was asked if she wanted to go for voluntary redundancy, she took it, was ready for a change. They wiped out her entire division. The media went ballistic.

Offered many of them equivalent roles in other departments. Media didn't mention that part, all they mentioned was the massive job losses. Fast forward two years, the chequebook is out and their advertising the same roles again. No mention of that on the news!

I'm not saying it's all sunshine and roses, but job losses don't always mean mass panic.

[Sunnyskies]

Johnno I was responding to your mining comment. I'm sure I can list a whole lot more jobs that I am aware of that have been shed - often without news reporting. But I probably can find similar positions in South Africa. If it was only Australia the locals would all be running for the hills.

I agree with Bronwyn and Hansa the point is that it is not an Australian phenomena but a global one and the factors that created the Lucky Country are no longer the same as they were. Does it mean there is no opportunity in Australia? No, it means you need to think smarter and it may not be as easy to walk into a job (contrary to what the Pom said in his thread was the position in 2007) but look at the forumites who have secured employment recently and in industries which may have their SOL status removed or numbers of visas granted reduced. You need to make yourself as employment fit as possible, whether it means doing another course or sprucing up the cv.

[chzaau]

I'm sorry Hansa how do you suggest replacing the car industry and all the supporting businesses? South Australia basically stuffed. People are showing up on this forum saying they can't find work.

Australia going through its own deindustrlization experience the same as what happened in Britain.

Labour cost to much in Australia, operating cost in Australia are to expensive. It not just labour costs, price of power, land cost everything.

But hey let's just keep selling houses to one another, that sort it mate... Yeah no worries... Let me go buy another investment property,..

[Bronwyn&Co]

I do agree with your points Chzaau, the economy in Aus is undergoing a restructure. We cannot afford minimum wage & the investment ppty industry is a giant pyramid scheme.

And yes! Bad news sells newspapers.

Some industries will die forever & new ones will be born. We're just in the middle of it all.

If you think of the jobs lost in England for eg. in the past century...basket weaver, horseshoe maker, candlestick maker, lamp-post lighter, washer woman, palace jester etc...lol.

It all makes sense! Now there are App designers. Times change...

Edited September 12, 2014 by Bronwyn&Co

[HansaPlease]

I didn't say I had the answers, I said these things swing in roundabouts.

Are there any countries where the car industry is healthy?

[chzaau]

Yes there a couple that come to mind... the two biggest winners at the moment are Mexico and Morroco.

Funny South Africa is on the fence, if the rand drops a bit that will make it desirable.

[Fish]

It was reported to be the high aussie dollar that broke the camels back in manufacturing exports. The crash in other world economies (and currencies) and the relative strength of australians economy and AUD through the GFC was not all a positive.

[HansaPlease]

Yes there a couple that come to mind... the two biggest winners at the moment are Mexico and Morroco.

Funny South Africa is on the fence, if the rand drops a bit that will make it desirable.

So all countries with low crime, high wages, low inflation and good living conditions then...

[chzaau]

Yup... just make sure to play your part ... keep buying made in Oz products and paying that extra premium on other goods... shop local ... spend local... your fellow country men need your support....

[Johnno]

The unions in Australia have broken the camels back and they need to be cleaned out, just like Thatcher did in UK.

Yup... just make sure to play your part ... keep buying made in Oz products and paying that extra premium on other goods... shop local ... spend local... your fellow country men need your support....

lol, as much as I agree with you I have to laugh because buying cheap and getting a red hot deal is a national sport in Australia. We lead the world in online imports and will bargain an honest businessman down until he loses the shirt off his back. Our own government is spending billions of dollars each year buying their ships and defence force products overseas. Even the Australian company who used to supply the army with their boots has been lost to a Chinese manufacturer. They were joking about it on the radio saying that they may have to check for GPS micro trackers installed in soles!

This week has been all talk about a 20 Billion dollar deal to purchase submarines from Japan. Australia has a submarine base in Adelaide capable of building subs (they built the Collins Class) but it's cheaper to build overseas. The Federal Police built a number of police boats in Singapore whilst ship builders in Western Australia are shutting shop and sending apprentices to centrelink! Thousands of Victorian and South Australian car workers that will lose their jobs could be trained and employed in the defence service industry but those job opportunities will go overseas now. Just think, if the government invested in those jobs all those people would pay income tax, GST, stamp duty etc right here in Aus. They would be spending their money at the local Coles, Bob Jane and footy sausage sizzle on a Sat morning but not anymore. I once heard a talk-back radio caller say, "if you want to spend your money to support the local economy you should get a tattoo or go to the local knock-shop but chances are that even those folks are imports".

My point being......Many people who have arrived in Oz and who participate in these forums have ONLY experienced Australia in the boom times. We sailed through the GFC untouched by the drama's that USA and Europe are still grappling with. This was thanks to the billions of dollars (something like $70B) of stimulus tipped in by the Rudd Government. We dodged the recession which we should have taken head on like the rest of the world. Rudd blew the nations savings and now the Abbott government is having to make some hectic yet very necessary fiscal adjustments.

This is why we are struggling to compete on the international stage.

[Bronwyn&Co]

Yup... just make sure to play your part ... keep buying made in Oz products and paying that extra premium on other goods... shop local ... spend local... your fellow country men need your support....

Ja I feel so guilty when I pay 90c for a tin of pineapples and the Aussie grown ones are $3...and I have a Suzuki instead of a Ford...what to do, what to do? ?

[Fish]

A lot of the disparity in wages between the uk is because the economy of the uk crashed so their wages were suppressed and their currency bombed. This almost immediately gave the impression that Australian wages had zoomed up...eg see 2008 on johnno's chart...when the Aussie dollar drops and pound strengthens the difference won't look so drastic. The price comparison of many goods when you take % of median salary into account, rather than using exchange rates to compare, often shows similar prices.

Australia has always lived under the lucky country moniker and I've lived through a few recessions and continuous up and downs....it's no different to the past imo; just situation normal with some positives and some negatives...no one knows what's next.

Edited September 12, 2014 by Fish

[Johnno]

A lot of the disparity in wages between the uk is because the economy of the uk crashed so their wages were suppressed and their currency bombed. This almost immediately gave the impression that Australian wages had zoomed up...eg see 2008 on johnno's chart...when the Aussie dollar drops and pound strengthens the difference won't look so drastic. The price comparison of many goods when you take % of median salary into account, rather than using exchange rates to compare, often shows similar prices.

Australia has always lived under the lucky country moniker and I've lived through a few recessions and continuous up and downs....it's no different to the past imo; just situation normal with some positives and some negatives...no one knows what's next.

The real issue is not the end of the mining boom but rather Australia's love affair with property and the belief that property investment is "as safe as houses". This one paragraph from the original report (linked in opening) explains a lot....

“To understand Australia's attitude to housing you need to understand the complacency that 23 years of uninterrupted economic growth creates. Australia is a country where 30-year-olds cannot remember the last recession and anyone under 35 probably wasn't old enough to care even if they can remember it. It has created a belief that recessions and downturns only happen in other, less-fortunate countries. Australians don't fear asset bubbles because they are just a problem that other countries deal with."

Nothing peeves me off more than the media fussing over a twenty something year old who "owns" 10 houses and is worth millions in real estate. Fact is that the bank owns the debt and the so-called "millionaire" has nothing to lose other than some face with his friends when the bubble bursts. It's a false economy built on debt, layer upon layer of debt! Someone mentioned in another thread that the Aussies are too occupied with selling each other overpriced real estate and I agree. The Australian economy is 100% reliant on mining, banks and real estate. Much of the real estate market is made of of favourable tax incentives in the form of negative gearing. This costs the government BILLIONS in tax and the government that changes it will lose power overnight, there is simply too much at risk. We have built this huge pyramid of property and someone is going to be caught when property prices are forced to into correction. It's all about affordability and so far all indicators are that affordability is getting more challenging. State governments open more land, developers look to build cheaper houses.....something must give!

[Craig01]

hopefully not too far off-topic ....

There's an unemployment problem? ... really? ... that's funny because I cannot find good people in my business ... they are like hens teeth - I am clearly missing something here

I think it is a people problem actually ...... many people only want to work in the industry they know and will not open themselves to other options while they search for that perfect job.

For example, I have Door-Knocking Team Leaders out in the field earning around $1200 per week - not bad for a backpacker eh? .... do you think I can find a local to do this type of work? ... nope ..... I have even gone through the channels of interviewing and taking on current Centrelinks recipients! ..... often after a couple of days they leave .... 'nah mate, this work is not for me' ... I ask them if they have anything else lined-up and the answer is always no.

I am simplifying things I know but for gawds sake, 1) apply for anything and everything 2) ensure you have a smart kick @rse CV 3) send it via email AND post 4) phone the company / agency 3 days after you have sent it (use the excuse that you would just like to make sure the intended recipient actually received your CV) and 5) no matter the position/industry, conduct yourself in the most professional manner during the interview. If you accept that nothing is below you I am convinced it won't take long to find work. Hubby and wife earning absolute minimum wage should easily come away with $1200 per week - you can live on that if you choose to.

I am happy to have taken a HUGE knock financially for the sake of my family. Not sure we will ever recover but it is a choice I have made and is not easy at times but when I think of the alternative of going back to Cesspool Land my heartburn seems to go away immediately.

Note to people still in South Africa: come over here with a positive mindset, don't ever forget the reason why you chose to leave, accept that this place is different from South Africa - better is some respects and not in others, get employed (easy in my opinion if you are prepared to accept anything)

The above is my opinion only but I am known to be bull-headed and not just roll-over

Will climb off my soapbox now

[Donnyvcpt]

Wow guys this is an encouraging thread!!!! Accept the good with the bad I guess. Onwards and upwards

[Mara]

This was perhaps before your time in Australia, but around 15 years ago, the exchange rate to the US$ was dreadful in Australia. For AU$1 you only got US$0-50. so we have definitely had some ups and downs here as well, perhaps just not at the same time.