Uncertainty and volatility are likely to feature in global financial markets for years to come, Treasury secretary Martin Parkinson has warned.
But it’s the long-term trends, such as the rise of China, our ageing population and climate change, that Australia must manage carefully if it is going to be sustainable, he says in an artcitle reported on news.com.au.
Dr Parkinson addressed the University of Western Australia recently, outlining Treasury’s vision for Australia’s economic future.
“Unfortunately, recurrent episodes of volatility are likely to be a feature of our global financial marks over the next few years,” he told the crowd.
“Such is the sense of concern over the lack of credible policy responses, repeat episodes may be triggered by apparently innocuous events or pieces of information.
“This risks adding a dimension of macroeconomic instability into the Australian economy of a sort that we have not experienced for many years.”
But Dr Parkinson noted that Australia had much to gain from the emergence of economies like China and India, both which are expected to supersede the US in the next 30 years.
Their growth was one of four long-term trends he predicted will significantly shape Australia and will need to be managed carefully.
Other trends include:
– the rapid advances in technology;
– the ageing of the population; and
– environmental pressures, such as climate change and water management.
On climate change, Dr Parkinson urged swift action, arguing that the longer Australia waits, the bigger the risk.
“To an economist, climate change is fundamentally a risk management issue,” he said.
“Even if you do not accept all elements of the science, prudence suggests taking out some form of insurance.”
The only certain thing about the future is uncertainty and change.
Just look what happened to in the first decade of this millennium…
In many cities property prices have increased over 140%, despite a recession in 2001, the introduction of the GST, the dot.com stock market crash, going to war in Iraq, a change in government, periods of high interest rates and the world’s worst economic downturn since the Great Depression.
I’m sure more Australians would have bought properties ten years ago if they knew what would happen to values over the next decade.
Of course I don’t know what’s ahead in the next 10 years, but I do know that there will be just as many hurdles to jump over.
Remember… obstacles are the scary things you see when you take your eyes off your goals.
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