The sun is shining.
The sky is clear.
The clouds are clearing.
The Australian flag is flying high.
But the world is still a long way from a new, brighter Australia.
So why is Australia rising again?
Is it simply a case of a rising economy?
Or, more broadly, is it a case that the country has finally made the transition to a greener economy?
“It’s really a combination of a few things,” says Chris Jones, professor of economics at Melbourne University.
“Firstly, we’ve moved away from the gold-rush era of the mining boom, and now we’re moving towards a more balanced economy, and that means a lot of jobs are coming back to Australia, and a lot more of the world will be looking to Australia for investment opportunities.”
The rise in the Australian economy is not entirely due to rising wages.
Instead, it’s been partly a result of a combination that includes lower prices for the country’s imported foodstuffs, and the fall in world prices for oil and other commodities that fuel the economy.
Inflation has fallen by about 2 per cent in the past year, but that still means the price of petrol has more than doubled, and food and beverage has risen.
That means the value of imported goods has more recently been falling as well.
In other words, the country is starting to lose some of its industrial competitiveness.
And the decline of the gold rush has also meant that some of Australia’s key industries have been hit harder.
In the past, Australia has enjoyed an economic boom.
But it’s now facing an ageing population and rising health and education costs.
“The rise in population, and particularly the ageing of the population, has been a major driver for the Australian dollar, and for the price level of Australian imports,” Jones says.
Rising wages and falling prices mean that more people are able to save. “
So the Australian price level has dropped, and you have to make up that deficit by selling your Australian goods and services in the markets overseas.”
Rising wages and falling prices mean that more people are able to save.
That has resulted in lower rates of inflation and falling unemployment.
And it means that the Australian Government has been able to boost spending by about $2 billion per year, by increasing the minimum wage, raising the GST and introducing a range of other tax and spending measures.
The increase in disposable incomes is also helping to lift the economy, particularly in rural areas.
“That’s been a huge driver of the economy,” Jones explains.
“There’s been less congestion in the rural areas, there’s been more investment, and we’re seeing some of that being redirected towards infrastructure in rural Australia.”
The economy is also doing better in the cities.
And while the growth in the manufacturing sector is still slowing, the housing market has boomed, and new construction is beginning to be built.
And, in some cases, the rising tide has been lifting all boats.
“We have the most diverse economy in the world, but we have one of the strongest economies in the developed world,” Jones notes.
“It is an economy that has grown, but its growth is a little bit slow.” “
The Australian economy’s resilience is also due to the fact that many of the countries that have become more competitive have experienced economic shocks before. “
It is an economy that has grown, but its growth is a little bit slow.”
The Australian economy’s resilience is also due to the fact that many of the countries that have become more competitive have experienced economic shocks before.
In recent decades, Australia’s exports have largely been from the developed countries, and its import revenues from those countries have largely come from the developing countries.
But, unlike in other parts of the developed worlds, Australians are still a big buyer of the products made in other countries.
“As you move away from a gold-mine economy, you’ve got to find a way to diversify your trade and to diversifying your imports, because that’s where the economy can grow the most,” Jones concludes.
“Australia is still one of our most competitive countries, but there are other countries that are catching up, and Australia has the opportunity to become a great trading partner.”