The Australian economy has done well despite the poor political environment over the last decade, points out Greg Gibbs, Analyst at Amplifying Global FX Capital Pty Ltd.
“The political parties have at least been focused enough on maintaining reasonable fiscal balance, even though governments have consistently pushed back their projections for returning the budget balance to surplus.”
“The country appears to have benefitted by the rise in wealth of the Asian region driving foreign investment into Australian property and generating growth in education and tourism services. And of course, the nation has reaped the benefit of demand for its iron ore coal and gas resources.”
“A decade of rapid immigration has helped generate economic growth, but now it is also straining infrastructure in major cities.”
“However, there have been a number of policy failures that may have left the economy less prepared to deal with the challenges ahead. These include energy infrastructure, and it appears to have plundered a lot of capital on national broadband that still leaves its telecommunications clunky and expensive. As countries abroad move to make their corporate tax systems more competitive, Australia is being left behind.”
“Australian households are highly indebted, and housing prices are expensive relative to incomes. Somewhat belatedly, the major cities are dealing with updating transport infrastructure, but development in cities still appears to lack long-term planning, and confidence in public policy is low.”
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