Search

Two-speed economy's division widens

Australia might have a two-speed economy today, but when interest rates rise again next month only one half will be moving. The other half will be dead.

Login

(existing subscribers)

The password field is case sensitive.
Request new password

Comments

Perth
Mr Treadgold, whilst elements of your op-ed are sound other opinions are not. Kerry Stokes might have a "foot in both camps" but he is also a very rich man who is intent on staying that way. Of course he wants consumer spending to flourish - his livelihood depends on retailers making money and "investing" in advertising, hopefully with his paper or tv channel and the web. His personal fortune is also dependent on a thriving resources sector - and I'm assuming he didn't think much of Labor's intentions to divert some of the profits with the new resources tax to the masses. The Education sector has certainly been hit by a high dollar. It has also been rocked by a perception, real or otherwise, that Australia is unkind (and even violent) to its foreign students. More importantly though, we've tightened immigration policy to ensure that uni fees for "green cards" no longer applies - and rightly so. There's much more to all of these stories than you give credit.

Perth
The PM hasn't a clue, a bit rough. If you lined up all the the things a PM has to know about & compared them to the average business leader I think you'd find the business leaders knowledge would be narrow by comparison. The two speed economy now exists in WA. We seemed to have avoided it last time round. I think the case for the mining tax is being made day by day.

BULLSBROOK
IT IS NOT ONLY THE RESERVE BANK AND THE FEDERAL GOVT THAT IS SADLY WELL OUT OF TOUCH WITH THE REAL WORLD .IT IS ALSO THE BIG FOUR BANKS WHO HAVE REGULARLY INCREASED THEIR RATES ABOVE THE RESERVE BANK INCREASES WHICH INTURN HAS SPELT AN AIR OF MISTRUST ESPECIALLY AS THEY CONTINUE TO PRODUCE RECORD PROFITS WHICH IN TURN HAS DEFEATED THERE OWN ARGUMENTS FOR GOING OVERBOARD AT THE SAME TIME. THEY SIMPLY CANNOT BE BELIEVED OR TRUSTED

tom price
"For WA this is not such a bad situation for its big mining sector. " ? The writer obviously has no idea that over 80% of the people employed in WA's mining sector are FIFOs from NSW and Victoria.

Perth
While the resource sector is important to exports, its direct contribution to Australian employment and GDP (around 5% in total) is less than sometimes assumed by those in Western Australia engaged in the resource industry. Services - a sector more exposed to the negative effect of rising interest rates - are far more important overall. Stokes is therefore correct to emphasise the danger of interest rates as a singular tool of macroeconomic management. One alternative would be to manage the exchange rate (like China does in relation to the yuan) to reflect the broad balance of the Australian economy instead of the distorting effect of resource demand. The laissez-faire approach favoured by both the Gillard government and the liberals should therefore be reviewed. A mining tax should also be imposed in order to provide for a sovereign wealth fund which could be used as an additional interventionist tool and fiscal stabilise . The tax does raise global issues and agreement should be sought for global resource taxes to protect developing economies throughout the world as well as the wealth of Australian citizens. Otherwise, the bulk of the wealth generated by mining will flow abroad. The problem is that a succession of Australian governments have proved inept when it comes to projecting power abroad or seeking global agreement, be it for the economy or environmental regulation.

Add your comment

BNIQ sponsored byECU School of Business and Law

Students

6th-Australian Institute of Management WA20,000
7th-Murdoch University16,584
8th-South Regional TAFE10,549
9th-Central Regional TAFE10,000
10th-The University of Notre Dame Australia6,708
47 tertiary education & training providers ranked by total number of students in WA

Number of Employees

BNiQ Disclaimer