Economy of Australia

The Australian Economy has been very healthy! This is what the government always stipulates, and is what the numbers show. In the last 7 years, the Australian economy and quality of life has improved year after year. Although in 2005-2006, the growth of the economy slowed down a bit, as well as the wages. However low unemployment levels are continuing to drop down, as there are many job opportunities and offers currently available.

Australian exportations are still very strong; with mining heading the sector due the enormous mineral deposits in Australia and the high demand worldwide. Agricultural production has diminished as a result of the strong droughts Australia has faced in the last two years, and sheep exportation was one of the most affected. Australian manufactured products have many contracts guaranteed with U.S.A, Japan and some European countries, and they do not suffer many fluctuations. An important change that has happened during the last years has been the invasion of Chinese’s products in the Australian market. Products marked “made in China” are everywhere competing seriously in quality and in price; as their prices are well below what is possible to produce in Australia. Despite the great Australian patriotism giving preference to the national product, to save money more people are choosing more and more imported products. The consequence is the trade balance is going down, turning red for Australian products.

Many changes also happened in the tourism industry, moving from the traditional places, to cheaper and less commercial cities. For example the Gold Coast was one of the biggest tourist destinations in Australia, now it is in competition with Cairns, for land space, and the tourist time of permanence in big cities has dropped in function of the costs. On the other hand, the market of international students coming to Australia has raised the industry to the level of the fourth most important industry. It has already far exceeded the exportation of sheep and agricultural products. With the International students, comes tourism and also the student’s relatives who came to visits them. (They will spend money on tours, lodgings and food). Today, this industry puts into motion billions of dollars in Australian economy, and is still growing.

The domestic market slowed down considerably in 2005, but despite propriety price stability, there have still been a lot of sales. After viewing what the expenses were in 2004, the biggest reason for the problems in the economy in my opinion, a not-economist expert were people having to pay off their credit cards and other private loans. I believe when these debts are payed, the economy will stabilise and return back to normal. Although the sales of new cars and new houses have dropped, inflation continues at a rate of less than 2% per year, with interest rates on loans at around 4.5 % year and credit card interest around 10% year. Foods prices have not increased significantly in 2006, but rental prices have gone up about 10%. But most importunately, the employment market and Job offers is continuing to grow and prosper.

Yes Mary Help, we can afford to visit New Zealand next year!