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Deflation, a remarkable achievement?

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Today's CPI figures for Australia (0.5% for the quarter, 1.9% p.a. annualised) is being seized upon by Wayne Swan as being a 'remarkable achievement'! Its all over the press @ the moment.

If you adjust CPI for the still rampant inflation present in the 'mining boom' states, it suggests that NSW and Victoria are suffering under real deflationary conditions. Hence the jobs being lost ...

A pet hate of mine is politicians trying to take credit for global macroeconomic conditions impacting local markets. However, for Swan to take credit for rampant price deflation is remarkable in itself.

Swanny, living in Victoria and seeing jobs slashed and wages beign cut, I for one am certainly hoping for an easement in deflationary conditions.
 
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Today's CPI figures for Australia (0.5% for the quarter, 1.9% p.a. annualised) is being seized upon by Wayne Swan as being a 'remarkable achievement'! Its all over the press @ the moment.

If you adjust CPI for the still rampant inflation present in the 'mining boom' states, it suggests that NSW and Victoria are suffering under real deflationary conditions. Hence the jobs being lost ...

A pet hate of mine is politicians trying to take credit for global macroeconomic conditions impacting local markets. However, for Swan to take credit for rampant price deflation is remarkable in itself.

Swanny, living in Victoria and seeing jobs slashed and wages beign cut, I for one am certainly hoping for an easement in deflationary conditions.
Herr Schwann is a remarkably obnoxious toad. All I wish for is that he is gawn at the next election. Now THAT will be something to celebrate! :D

After that, THEN we can worry about deflation.... ;)
 
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I would prefer deflation.

Just let the employers cut wages at a reasonable pace.
 
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Are we truely deflationary or is it just the high dollar and post-recovery from disasters such as flooding etc ?
 
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Are we truely deflationary or is it just the high dollar and post-recovery from disasters such as flooding etc ?
I would say deflationary conditions outside of essential services and some raw food produce in NSW, Victoria and Tasmania. Remaining wage-driven inflation in the mining states. Two-tier economy and two-tiers of belt tightening ...

Without a doubt, wages have spiralled out of control, without a resultant increase in productivity, in the mining states. This is most definitely not the case in the service-based economies of Vic/NSW.

Victorian economy, which was admitedly fuelled by an unsustainable housing boom, is well and truely in the doldrums now. So I would not call that a 'remarkable achievement'; more a tragedy for the scores who will lose their jobs in the next 6-12 months. Then again, all they have to do is re-train as truck drivers and 'fly in, fly out' to the Pilbarra ...
 
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Victorian economy, which was admitedly fuelled by an unsustainable housing boom, is well and truely in the doldrums now. So I would not call that a 'remarkable achievement'; more a tragedy for the scores who will lose their jobs in the next 6-12 months.
Much the same in Tasmania too.

There's the occasional "good news" story in an economic sense, but even that tends to relate to successful cost cutting etc rather than actual business growth. The rest of the economic news is just bad, bad and bad - essential costs going up, businesses closing down, unemployment rising, empty hospital beds because they can't afford enough doctors and so on. Doom and gloom.
 

IFocus

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Then again, all they have to do is re-train as truck drivers and 'fly in, fly out' to the Pilbarra ...

There are plenty of truck drivers already what they need is trade and engineering skills.

WA trains less apprentices today than 4 years ago go work that one out.

Also prices in WA are out of control
 
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WA trains less apprentices today than 4 years ago go work that one out.
That is incredible. You would have thought the demand for apprenticeships were at record highs.

Your comments about the need to re-skill (apprenticeships, engineering) is interesting. It is a tough ask for say a 35-year old male (or female) working in manufacturing or retail to take 3 years off to train as an engineer/apprentice if they have a mortgage and kids to feed. This is the most cash intensive part of your life. This is particularly so because of the increasing levels of home owners in the eastern states that have negative equity in their homes. Then there is the tyranny of distance in Australia with the need to uproot the family and move them 5,000km away to Port Hedland.

This was always the part of the RBAs creed of 'making room for the mining boom' by keeping interest rates high that had me shaking my head.
 
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Your comments about the need to re-skill (apprenticeships, engineering) is interesting. It is a tough ask for say a 35-year old male (or female) working in manufacturing or retail to take 3 years off to train as an engineer/apprentice if they have a mortgage and kids to feed. This is the most cash intensive part of your life.
There is actually a lot of demand for adult apprenticeships. Guys(and girls) see how much money trades are making, and are willing to sacrifice those few years in most cases (if they are able to as you mention above). Mature age apprenticeship wages are higher than standard apprentices. Catch is, VERY FEW employers are interested in employing them for this reason. It is very difficult to land yourself one.
 

Glen48

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There is work going as long as you are under 45.
When does it go from deflation to a recession/depression?
 
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There is actually a lot of demand for adult apprenticeships. Guys(and girls) see how much money trades are making, and are willing to sacrifice those few years in most cases (if they are able to as you mention above). Mature age apprenticeship wages are higher than standard apprentices. Catch is, VERY FEW employers are interested in employing them for this reason. It is very difficult to land yourself one.
This must vary between states. Here in Tas you can employ a mature age apprentice on a bit over $7 per hour in their first year. There's a $150 per week government subsidy on top (paid to the apprentice).

The employer can, of course, pay higher rates if they choose to and it's not uncommon in practice.
 

IFocus

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That is incredible. You would have thought the demand for apprenticeships were at record highs.
Nope its costs money to run apprentices all the big organisations used to have 10x what they do now and thats where our youth (male and some female)who didn't go to uni used to end up, or the building industry.

As the focus of organisations is on the core business apprentices were given the heave ho.

With out being political state Liberal governments wont invest in training Labor were only marginally better..
 

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