25 years without a recession: Why is the Australian economy so resilient?

[helpme]

Australia's economy has been humming along for 25 years with no recession.
http://www.bbc.com/news/business-39124272

Kudos to Down Under! It will never go down and never go under. "Down Under" is obviously a misnomer.

On a more serious note, why is the Australian economy so resilient?

- Is it because Australia is blessed with lots of natural resources and a relatively small population (24m) for its land and resource size? Australia is also known as The Lucky Country.

- Is it because Australians work smart? Not sure if it is true. Some foreigners think Australia has a laid-back culture. If a country is laid back and rich, that is a great achievement. It means the people work smart and are highly productive. Like the Germans. Is this true for Australians?

What do fellow aussiestock forummers have to say about the resilience of the Australian economy?

 

[The Brain]

Australia's economy has been humming along for 25 years with no recession.
http://www.bbc.com/news/business-39124272

Kudos to Down Under! It will never go down and never go under. "Down Under" is obviously a misnomer.

On a more serious note, why is the Australian economy so resilient?

- Is it because Australia is blessed with lots of natural resources and a relatively small population (24m) for its land and resource size? Australia is also known as The Lucky Country.

- Is it because Australians work smart? Not sure if it is true. Some foreigners think Australia has a laid-back culture. If a country is laid back and rich, that is a great achievement. It means the people work smart and are highly productive. Like the Germans. Is this true for Australians?

What do fellow aussiestock forummers have to say about the resilience of the Australian economy?

Not everything is as great as it appears.
The average person cares not a whit for the recession stat, they care how well they are doing. And that streak masks a lot of problems, mostly for individuals who still struggle to get ahead. The cost of living is ridiculous.

Why are we doing well ? I know structural reforms in the 80's are credited. We did have a prolonged mining boom. But a lot of economic growth is due to immigration. The price of which is crowded cities and infrastructure bursting at the seams.
http://www.abc.net.au/news/2017-01-19/high-immigration-masks-australian-economic-decline/8193628

 

[Knobby22]

It's for a few reasons:
The dollar drops when times are bad helping us compete, then rises when times are good.
We have a voting system that stops extreme idiots getting in or staying in.
We are experts at milking foreigners who want to live here.
Our farmers are very competitive and we have natural resources.

That said we have been going off the rails since the last term of the Howard government.
It has been hard to get good decisions made and bad decision corrected. the next recession when it comes is going to be very nasty. Still some distance away though unless something happens out of the blue.

 

[tech/a]

China

 

[OmegaTrader]

A combination and luck and being moderate.

1) Geographical isolation: We have in the past especially been immune from conflicts except for major world wars and even then practically untouched. We don't have to fight with neighbours. This also allows for control of borders in terms of immigration etc.

2) Newer country, being part of a newer modern civilisation with the exception of aboriginal people, who were pretty much pushed aside or killed etc, Most of the higher standard of living countries around the world seem to be the newer ones, new zealand, canada, australia, US is of course debatable . I believe that starting again, meas that old institutions and mistakes from the past were mostly avoided.

3) In recent times china and the rources boom have helped Australia alot, but I don't think that is the whole story. Alot of countries around the world have massive amounts of resources and mining. The difference has been the business climate and proximity to asia. What sounds better a mine in Australia or the congo. I know which one I would be happier investing in.

4) Being moderate, has allowed for better outcomes. When an extreme group gets into power in destroys the whole system. This really began with the irish convicts who fought against the english establishment. The idea of independence countered the strong power of established institutions. The tall poppy syndrome is part of this as well.

We haven't had communist or fascist government, a religious dictatorship or our own monarchy only the uk one. Part of the reason people flocked to the world was to get away from these older systems of rule. There has mostly been a balance. This reflection has moved through to wages and even in Australia voting system.

Two people earning $20 an hour at the bottom level + super+ sick pay at 40 hrs per week is $80,000, p.a that is not champagne and caviar but is very good compared to alot of countries around the world. The union balanced corporate power and capitalism countered an all powerful government. Balance is the key.

We have a very generous welfare system, safety, good wages, a mostly healthy environment etc


I too recognise that alot of aspects are out of balance but it will never be perfect. Welfare is 35% of the budget and we are overspending across state and federal with both left and right governments. Most of the burden of taxation is also on personal income because of the structure of the taxation system and avoidance of tax by big companies paying silly buggers with us. Alot of people don't need welfare with expensive houses being exempt and alot of companies should not being in the caman islands etc. Bureaucracy is eating too much of the cake as well.


If spending is not cut or taxation reformed, debt will increase until an inflection point occurs. You can't keep relying on borrowing and printing money. Print too much, inflation and riots, borrow too much interest overwhelms the budget and default or partial default flows through the economy.

The other saviour could be real growth of some kind, either from developing economies or technology. I don't know if that will be enough.

Without improvement on the economic front alot of other social aspects will fall by the wayside.

Balance between owners and workers, balance between government and self interest, balance between the environment and development.

Balance in life is the key.

 

[tech/a]

Unfortunately success,opportunity,necessity,ambition,growth,financial security.

All come from INBALANCE.

Balance is a nice place to visit.

 

[Klogg]

A combination and luck and being moderate.

1) Geographical isolation: We have in the past especially been immune from conflicts except for major world wars and even then practically untouched. We don't have to fight with neighbours. This also allows for control of borders in terms of immigration etc.

2) Newer country, being part of a newer modern civilisation with the exception of aboriginal people, who were pretty much pushed aside or killed etc, Most of the higher standard of living countries around the world seem to be the newer ones, new zealand, canada, australia, US is of course debatable . I believe that starting again, meas that old institutions and mistakes from the past were mostly avoided.

3) In recent times china and the rources boom have helped Australia alot, but I don't think that is the whole story. Alot of countries around the world have massive amounts of resources and mining. The difference has been the business climate and proximity to asia. What sounds better a mine in Australia or the congo. I know which one I would be happier investing in.

4) Being moderate, has allowed for better outcomes. When an extreme group gets into power in destroys the whole system. This really began with the irish convicts who fought against the english establishment. The idea of independence countered the strong power of established institutions. The tall poppy syndrome is part of this as well.

We haven't had communist or fascist government, a religious dictatorship or our own monarchy only the uk one. Part of the reason people flocked to the world was to get away from these older systems of rule. There has mostly been a balance. This reflection has moved through to wages and even in Australia voting system.

Two people earning $20 an hour at the bottom level + super+ sick pay at 40 hrs per week is $80,000, p.a that is not champagne and caviar but is very good compared to alot of countries around the world. The union balanced corporate power and capitalism countered an all powerful government. Balance is the key.

We have a very generous welfare system, safety, good wages, a mostly healthy environment etc


I too recognise that alot of aspects are out of balance but it will never be perfect. Welfare is 35% of the budget and we are overspending across state and federal with both left and right governments. Most of the burden of taxation is also on personal income because of the structure of the taxation system and avoidance of tax by big companies paying silly buggers with us. Alot of people don't need welfare with expensive houses being exempt and alot of companies should not being in the caman islands etc. Bureaucracy is eating too much of the cake as well.


If spending is not cut or taxation reformed, debt will increase until an inflection point occurs. You can't keep relying on borrowing and printing money. Print too much, inflation and riots, borrow too much interest overwhelms the budget and default or partial default flows through the economy.

The other saviour could be real growth of some kind, either from developing economies or technology. I don't know if that will be enough.

Without improvement on the economic front alot of other social aspects will fall by the wayside.

Balance between owners and workers, balance between government and self interest, balance between the environment and development.

Balance in life is the key.

This totally misses the point that on a per capita basis, we've well and truly had a recession. Just because I bring in additional people, it doesn't mean that each person is better off.

The idea that we haven't had a recession is only because we're massaging that GDP figure with high migration. What gets measured gets managed...

 

[OmegaTrader]

This totally misses the point that on a per capita basis, we've well and truly had a recession. Just because I bring in additional people, it doesn't mean that each person is better off.

The idea that we haven't had a recession is only because we're massaging that GDP figure with high migration. What gets measured gets managed...

Recession unemployment etc. It is about quality of life.

Numbers are only indicators. The reason there was no technical recession continue was because the government went on a spending spree and ate the surplus and then borrowed some to continue. The RBA then printed money aka lowering interest rates. Recession is really an indicator that the economy is slowing down. We only just missed a technical recession after GFC, just.

China has slowed down and so has resources. But the levels of 2007 were hyper inflated. We can't expect those levels and wages and growth given the current state of affairs.

Increasing population does not impact the unemployment figures....
But the effectiveness of these indicators is a debate in itself. Does GDP growth actually translate into a better life or is it a measure distorted by printing money and increasing population. Some countries have economic growth but it is held in a handful of powerful institutions and people. Wages for the every man are depressed in these countries as well.

I definitely agree that things are getting worse. In WA properties are not moving and have fallen in value. The job market has taken a major hit due to the mining slowing down.


Continued growth is really an indication of the society. Just arguing whether it is technically a recession doesn't show the whole picture. The point of the OP was hat life has been good for 25 years.


Life is still good but not perfect.

 

[So_Cynical]

Australia's economy has been humming along for 25 years with no recession...Australia is also known as The Lucky Country.

This is the Asian century and Aust is in the right place at the right time with the right stuff, globalization helped as did the recession we had to have and the reforms that flowed from it, Hawke Keating came along at the right time and Howard didn't make a mess of it after the fact.

The Lucky (Wool, Gold, Coal, Iron, Wheat and now Gas & Cattle) country got lucky again.

 

[flynnmactier]

Unfortunately success,opportunity,necessity,ambition,growth,financial security.

All come from INBALANCE.

Balance is a nice place to visit.

Hi, I agree with you.