The Federal Government is sick of negative talk. Yesterday, Prime Minister Julia Gillard said she wants to see more CEOs start talking up the good parts of the economy, rather than harping on the doom and gloom.
Gillard made the comments yesterday at the start of the government’s economic forum for business leaders, telling them to “speak up” about the state of the nation’s finances.
SmartCompany decided we had better get in on the act as well. Admittedly, we’re a nation facing plenty of problems, so talking up every aspect of the economy is going to be a tough job.
We’ve tried our best, but it’s been a tough task. See what you think of our attempt to find five bright spots in the nation’s economy.
It’s true; we have one of the lowest unemployment rates in the developed world right now at 5.1%. It’s an impressive number, and demonstrates how everyone has been able to hang on to their cash, their homes, and keep retail sales edging along, even at a low rate.
Just don’t mention: The fact we have a huge skills shortage. Everyone is heading out west to the mines, which is contributing to the low unemployment rate. But, on the east coast, services industries are light on employment, and plenty of SMEs complain they don’t have enough staff.
Oh, and by the way, there are plenty of analysts who say the method for counting unemployment is dated, and the real figure could be as many as a few percentage points higher.
Gross domestic product growth has been strong, at least in the first quarter of the year. GDP growth was at 1.3% in the March quarter, up by 4.3% compared to the March quarter in 2011. Despite renewed fears of a recession, Australia keeps moving along.
Just don’t mention: The huge European debt crisis looming over our shoulder. If Greece and Spain do tank, we all go down, and a stronger-than-average GDP won’t be enough to stop it. On top of that, business confidence isn’t crash hot right now, and two of the biggest non-mining states, Victoria and New South Wales, are still experiencing slower growth and higher unemployment.
GDP is relatively strong, but if you break the picture down into smaller bites, the picture’s not quite as rosy.
3. Low interest rates
Home owners have been welcoming every interest rate decline with open arms. Right now, the official cash rate is at 3.5%, enough to make both mortgage holders and savings account members happy.
Just don’t mention: Falling interest rates is not such a good sign. It means the economy is slowing down and the RBA needs to kick it back into gear. And if you look at the RBA’s statements over the past six months, you’ll see it’s clearly worried about what’s happening in Europe.
“More recent indicators suggest further weakening in Europe,” it said in its latest statement – more interest rate cuts are on their way, and that’s not necessarily a good thing.
4. The budget surplus
It’s an impressive feat we’ve been able to wrangle a budget surplus out of an economy that continues to falter. For many people who equate the idea of a surplus with a well-running economy, the Federal Government’s achievement could even have some benefits for confidence.
Just don’t mention: This surplus is incredibly small – only $1.5 billion – and it was obtained by scrapping measures such as the 1% company tax cut. Because we’re spending less than we make as a country, doesn’t mean we’re doing it the right way.
5. Mining boom
But, after all that, surely the mining boom provides some relief? The rush for minerals in the west and north has largely defined government spending and policy creation over the past half-decade. And with more minerals still to come out of the ground, we’re going to be enjoying the benefits of this boom for years.
Just don’t mention: The whopping great tax on everything in the ground. The government loves its minerals but not so much the people digging them up – see Clive Palmer’s exclusion from this week’s economic forum – and the government’s continued dialogue against “billionaires” in control of these resources.
The mining boom is one of the greatest financial boosts the country has ever received, but as long as tension remains between the government and the miners, the benefits can never fully be realised.