‘moften asked about the cconomy and what is hhappening. My simple newer ier Australa is foing through a 25-year restroctare thats being forced upon us by the global Unfortunately, I donot believe thatthe so-called economic experts who dominate the ‘media, with thee use of the TatestSconomie indicators, are explaining what is happening. ‘They seem tobe more focused tn using the latest economic Statist either to eoniem their eanomie forest, ora {station for changing their ows. donot intend ofall into the same trap, but rather to provide my analysis based on Imajor macro and socio-economic trends AUSTRALIA FALLING LIVING STANDARDS ‘Australia ethe 17th langest sconomy inthe world by GDP fd Tadoneia ie the 1608, However by the year 2050 we wallbe ranked around 25th and Indonesia willbe eighth, Many ‘of us have been to Indonesia, ediference Inliving standards ie obvious, deapte the major advances in Indonesia over the ast 20 years, So, ile Indonesia has a larger GDP, its tving standards, although lower, are increasing bocause of the internet, ‘utsoureing/tTshoring, cheaper ‘and aceaaible international ‘travel, and better and wider ‘cones ta eduestion, The living ‘Standards ofthe to countries fare very slowly converging. Thave ured Indonesia as neighbour; however, increasing GDP and rising ving standards are occurring in other parts of {he worl, specifically in Basi, -Merico, Nigeria and Vietnam, ‘hich wil ll be ranked in the ‘Top 20by 2050. ‘These countries are trading their way ou of poverty, as are India and China, which now havea middle-class population sf around 300 million each. ‘This ie a good thing as their rising living standards mean there will be greater demand for our natural resources, particulary food and mineral. The ip sido for Australia is that Bio E) zy ves erertaeeaey for the shifting es lower-cost-of production conomies are easing fondamental restructure in our economy. The ear ‘manufacturing industry is ‘losing down, and now the Serviessoetr is being impacted on by offshoring, outsourcing, and the mabity of Tabour For corporations to ‘eompete they st lower their praetion eoets throwgh Prudutiity improvements {her by lowering wages or by lnmproving efficiency throagh Innovation, or both, Companies ‘are implementing these ffcieney changes, and this is resulting in fll n ral wages, ‘whieh wil eventually low ‘through to lower living standards in Australis. At the fame time there isa rush to invest in property and other ‘assets that is driving up prices ‘Our lating exchange rate vill help cushion the impacts, but i wil take another 10-16 years before the wage Aiforetil ie substantially duced, at the moment it ‘ay enst $80 per hour in Australia against $30 por day {nan ashoring economy, Unfortunately over the last 4a years Australia, with a fow exceptions, has failed to commercialise ite innovations, ‘whereas US economie growth thas been driven hy is technology giants, ef Goole ‘ple, Microsof, ee, that years ago ether didnot exit o ‘were edgings: Shor-termism appears tobe the hallmark af shoceetve Australia governments riding an the back bfagriculture, mining and financial services, Governments should nt pick winners, but they should provide the environment fr companies to take appropriate levels of ik, land recognise that Australia fannot compete internationally inmate manufacturing praetion and services, "A simple examination ofthe Federal Budget papers reflects the above and that our living standards ae falling, given Structural problem with the budge, receipts are less than ‘expenditure, Tax receipts have fallen by about 30% since the art of the GFC; this tend of ‘vecepts plagued the lard eras and is doing66 we prune CAN BECOME BRIGHTER FOR THOSE WILLING TO BE FLEXIBLE TO RESKILL, AND TO EMBRACE CHANGE the same with the Abbott Government. FINANCIAL SERVICES — ‘CONTINUED REDUCTION mi JOBS ‘The financial services industry is ‘haratersed by ongoing ob shredding across many areas In particolar, there is downsizing in branch and administration areas aswell a rannetion proceesing, Inwhich a proces ean be Automated or eatsourced tffsbored or the eetivity forced Ick onto the customer todo (ceservie), Partially ffectting thos losses are naw jobs being ‘rerted in thoce areas where ills are roquired, uch Aigitl sales and marketing, ‘ompian and sales channel ‘management. However, the ‘reall ren ia reduction in personnel in financial services, ‘is important to understand that banks are mobizer of cpial ‘nd enables of investment, ot ‘wealth creators thei wn ight The financial services sector is too large a component of ‘reciouocy ‘Twenty years agoit was commonplace ta hear an ‘executive complaining about the ust of technology and st Inadequacy in solving business {sauen Today, the reverse the case: technology is looking for problem to save. The worlds Increasing reliance a technology is accelerating, and it will entinue to provide new opportunities while diving flown the costs of production and Aistibtion. PROPERTY MARKET — CHANGING Dynamic, Readeatial property i ood study in behavioural Sconomies Historically property Drees did not, n the med fem, rise faster than average weekly earnings. In the 1980s, {his equation changed to that of OPINION combined average weekly ‘earnings af eoupen ‘now need modifetion agin ‘heenase of consumer ‘behavioural changes Parents ave more actively helping their children enter the residential property market as they see property ‘a8 good and eae Inveatment, given that many Ihave done well fom roperts Parents Understand that choir children must fet pay off {heir HECS debt, and with the trend toward more casual employment this ‘means today's youth maybe looked aut af the property marke, Foreign buyers sre fsggressively entering the market, as they ae attracted to Australias democratic system of government, particulary the separation of powers, which mean Property title i guaranteed, ‘Despite all analysis showing tha property prices fro overvalued itis apparent that there en new ‘behavioural dynamie at play Inthe residential property ‘market, which probably ‘means the historical ‘measures of fie valve need ‘modifying. Property prices in ‘the immediate future may although this should not be sustainable inthe long run ‘because aver the long tera theres performance corelation between and ‘eros all asset classes Tolling real wages coupled with inereasing aset prices means the gap between the ‘wealthy and the poor is ‘widening. The dreams ofthe Tower middleclass are being washed away, while the Iiddle clase are beginning to feel they are on the slippery slope. ‘Australia is going through 25-year economie ‘withthe atalyets being the GEC, technology, and international (Gnd inter generational changes. Even though ving Standards are falling and ‘will eontinue tof ature ean become Brighter for those willing to be flexible, to reskill and to embrace change. ‘aye way | OU KNOW? 25H Bye yea 2060, stata ispreticwsto eval on tere ares ecoranynte orate 25th EQUITY-ONE ONE OF AUSTRALIA'S LONGEST STANDING NON-CODE LENDERS 1ST & 2ND MORTGAGES ATTRACTIVE TRAIS = Coe La aera Perera Cerrersceeener Ty eC Teri eee enc) Cet een Penenieay