At last, someone has produced a substantial read which takes a long term view in explaining what is wrong with the Australian economy. Well done to The Age’s Tim Colebatch for producing this understandable and well researched piece in Saturday’s paper.
Crikey certainly learnt plenty and these are the points we thought were most interesting:
- Our net foreign debt has multiplied 50 times over since 1980, from $8 billion to $422 billion, as borrowing became the means to a richer lifestyle.
- Household debt to the banks has multiplied 27 times over, from $26.5 billion to $735 billion; in the last six years, it has more than doubled.
- In the year to September, for every $1 growth in household income, household debt grew by $3.
- Imports have being growing faster than exports virtually since the Whitlam government began slashing tariffs in 1973: the last year Australia ran a cur-rent account surplus. In 30 years, imports have surged from 12 per cent of GDP to 21 per cent, while exports have grown only from 15 per cent to 18 per cent.
- Since mid-2001 we have seen an astonishing collapse: import volumes have grown 46 per cent, while export volumes have risen 0.2 per cent.
- Australia has more than a million people working in skilled trades, yet in recent years, only 20,000 people a year have completed apprenticeships. The trades workforce is now disproportionately old, yet at this rate it would take more than 50 years to replace them.
- Apprenticeships are now rising rapidly: in three years new apprentice numbers have shot up by more than half to 56,600. But on present trends, most will drop out along the way. In the year to September, only 10 people completed apprenticeships for every 13 who dropped out. The Government’s default option has been to lift skilled migration to fill the gap. Since 1976-77 it has almost trebled skilled migration from 27,550 in 1996-97 to a target of 77,100 this year. Immigration Minister Amanda Vanstone has not denied a report that she is planning to lift the target to 100,000 for 2005-06.