Not so rosy in Australia

John Key is not going to be able to use the “New Zealanders flee to Australia in record numbers” line for much longer as a criticism of the New Zealand economy, and by inference using it to attack Labour.  The economic outlook for the Aussies is as bad there as it is here.

According to The Age the collapse of the American property market is making itself felt in Australia, just as we are seeing a mild collapse here. As well The Business Age says:

  • real estate sales in Melbourne are at an 18 month low
  • job ads fell by 5.9% – the first time since January 2005
  • interest rates are on the rise
  • a Roy Morgan Consumer Confidence Rating survey showed intention to buy was at its lowest in seven years
  • less than a third of Australians expect good financial times in the next 12 months
  • the unemployment rate is up

Does this sound like a place you might want to move to? Does it sound like everything that John Key says is wrong with New Zealand?

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  • By Johnny-johnny, March 11, 2008 @ 9:59 am

    Hey Skinny, where was your post on the Muldoonishness of Cullen blocking Canadian pensioners from owning 40% of AKL airport? Surely a Govt making overnight law changes would bug you more than John Key forgetting to read The Age, right?

  • By Skinny, March 11, 2008 @ 3:47 pm

    As an AIAL shareholder I’m happy to say that I want control to stay in New Zealand hands…that’s why I haven’t written about it.

    I’d have to add that John Key didn’t know what he wanted to do with the Canadians, or with Cullens block. He knows that NZ’ers want to keep a hold of assets – so he tried to sound like he wouldn’t have let the sale go ahead, but he’s also keen on selling assets – as an ex trader he’s always looking to make money – so he was stuck between a rock and a hard place on that one. I must say he looked a little silly.

  • By Johnny-johnny, March 11, 2008 @ 3:55 pm

    Hey Skinny, aren’t we all AIAL shareholders thanks to Cullen’s Super(duper) Fund?

    I get that people want local ownership of AIAL. But I don’t think that means people also want overnight law changes which was kinda what I was asking you about.

    Also, how about adding a “[I hate John-DonKey-Brash]” at the end of all these posts so we can filter ‘em out? ;)

  • By Johnny-johnny, March 11, 2008 @ 4:08 pm

    Also your original argument in this post isn’t that strong either. If the Australian economy stopped growing at all (per capita-wise) and NZ kept growing at the 3% estimate recorded for 2007… it would still take until 2017 before our GDP (PPP) per capita caught up to that of Australia.

    If the Aussie economy shrank by 10% per year per capita and we grew by 3% per year, it would take us until 2012 to catch up…

  • By Skinny, March 14, 2008 @ 8:16 pm

    My lack of a quick response is, ironically, due to me being in Sydney for the last three days.

    My ‘weak’ argument uses as much rhetoric as John Key does in getting his point/s across.

    You are right in saying that our PPP rates are well behind Australia. New Zealand has always been ranked as being in the low-middle-income group, while Australia is in the high-middle-income group.

    But I have to say, anecdotally, that I was surprised by an apparent economic downturn in Sydney.

    Victoria Street that runs through Kings Cross and on to Paddington is normally bristling with busy restaurants. Now, virtually one whole block was for lease.

    Gowings (or is it Gowrings?), a huge department store that was opposite the QVB – gone and replaced by a Supre store.

    A keynote speaker at the conference I attended who started http://www.whatifinnovation.com/ in Australia is shutting it down after struggling for 6 years to get Australian investors to invest in innovation. If Ponoko had been in Australia and needed funding would it ever have got off the ground?

    I saw jobs in my field in the trade magazines at my conference – salaries were the same as back in New Zealand.

    Taxi fares always felt cheap in Australia – not anymore – kilometre for kilometre I felt like I was paying on par with New Zealand rates.

    A simple fish meal with a glass of wine and a salad cost me A$55.

    I could go on and on, and I’m sure you could respond with equally valid arguments and counter claims.

    My point is perhaps more around the fact that John Key isn’t going to be able to change any of this, unless of course he legislates to bring down the cost of a 1kg block of cheese, or a 2 litre bottle of milk. He’s unlikely to do that, just as he is unlikely to protect strategic assets from foreign ownership.

  • By Johnny-johnny, March 17, 2008 @ 12:17 pm

    Your anecdotes on Sydney seem about right but at the same time the opposite is happening, so I hear anecdotally, in WA. And the reference about Ponoko is neither here nor there – the counter could be that Oz with its much much larger capital market, Ponoko could’ve got off the ground much faster.

    So if John Key isn’t going to be able to change any of this (fair call) then it’s safe to assume none of the buggers can?

    Nice little write-up today/yesterday on the trans-Tasman pay gap: http://stuff.co.nz/dailynews/4441530a6405.html

  • By Skinny, March 17, 2008 @ 1:09 pm

    Yeah, I read that trans-Tasman pay gap article in the SST yesterday and thought you’d be laughing your head off as more evidence against my ‘argument’.

    I’m sure that none of the parties will be able to fix it – no matter what they tell us.

    Philosophically I prefer the devil I know (Labour) to the devil I don’t (National).

    Thanks for all the comments by the way. It makes this all worthwhile – I think :-)

  • By Mr Neighbour, March 20, 2008 @ 9:03 pm

    Here’s another reason that Australia isn’t looking too rosy:

    http://www.iht.com/articles/ap/2007/11/12/asia/AS-GEN-Australia-Loud-Music.php

    These economic changes seem to be causing some weird behaviour… even for Australians.

  • By Skinny, March 24, 2008 @ 3:15 pm

    Mr Neighbour, this comment wouldn’t be a blatant attempt to drive traffic to your own site now would it? :-)

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