Saturday, July 25, 2009

Up, down or back to front in Australia

"THE worst is not behind us. The worst of the global financial crisis has passed and sharemarkets have bounced on signs that the global economic recession is stabilising. But the worst for the Australian economy will come over the next six to nine months as a slump in export prices hits company profits, unemployment rises and consumer spending is checked by a household income squeeze."

I sort of figured that sooner or later all the cash handouts will lead to a decline in spending for future generations. Although, their debt to gdp is low compared to other countries they are very focused on commodities, tourism, financing, and construction. Without these sectors they are as empty in terms of productivity as any developed nation.

So I welcome any reform, especially with the very expensive superannuation plans in Australia. It is a good plan during boom years however with the boom and bust cycle that we have been facing, it can leave a lot of desired effects if there are more busts in the future.


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