Economic commentator Peter Switzer wrote 2 interesting commentaries in the Australian recently. One on why Australians are so glum and then he gave a series of reasons why we should be positive about the economy.
Initially he gave 20 reasons why Australians are so glum.
Switzer jotted down 20 reasons why some Australians might be gloomy:
1. When the GFC struck, first-home buyers were encouraged to borrow on low interest rates and with the boosted grant and, as soon they shouldered the debt, up went interest rates.
2. Investors who lost 50 per cent of their portfolio’s value in 2007-09 need to see a 100 per cent rise in the market to get even, but the increase has only been about 30 per cent.
3. Super trustees have endured lower balances since 2007 and improvements have been hardly great.
4. Retirees are so scared of stocks they are chasing term deposits, which do not generate enough return to ensure their nest eggs will grow sufficiently.
5. Business confidence is way below trend.
6. Business loan interest rates are at high levels and loan availability is extremely low.
7. Banks are not passing on rate cuts in full.
8. Europe spooks us via the stockmarket daily.
9. Talk of a China hard landing comes through regularly.
10. The carbon tax is looming and rising power bills will surge further.
11.The high dollar hurts exporters, tourism operators and local import competitors.
12. Retailers are battling the internet; and they have to charge the GST, unlike foreign rivals.
13. The RBA’s rates were too high until recently.
14. House prices have been falling for many homeowners.
15. Petrol prices are historically high.
16. National growth numbers were unbelievably good, but NSW grew at 0.7 per cent and Victoria at 2.6 per cent.
17. Manufacturing is at a three-year low and shrinking.
18. Consumer confidence remains negative.
19. Leadership in Canberra could be better.
20. And the media is preoccupied with stories like this.
He concluded that gloominess is quite understandable to anyone who lives in the real world.
Now 11 reasons why we can be positive about our economy
In a subsequent article in the Australian Switzer found 11 reasons to be positive. Here they are:
- Inflation was 0.1 per cent in the March quarter to give an annual rate of 1.6 per cent.
- Over the three months to May, employment rose by 60,400 and the unemployment rate was 5.1 per cent.
- The participation rate is rising, which is a good economic sign.
- The economy grew at a historically strong 4.3 per cent.
- Car sales are up 22.4 per cent on a year ago.
- The weekly Roy Morgan consumer confidence rose by 1.8 points to 110.8 points. Consumer confidence rose for four out of the previous five weeks.
- Total lending finance rose by 6.3 per cent in April after rising by 6.1 per cent in March.
- New homes sales lifted by 6.9 per cent in April but this was a partial rebound from March when sales slumped 9.4 per cent.
- The RBA has come to its senses and is cutting interest rates.
- New business investment rose 6.1 per cent in the March quarter, ahead of forecasts of 3 per cent.
- The number of tourists arriving in March rose by 1.9 per cent to record highs. This fell by 0.5 per cent in April.
So now that you’ve read these lists let me ask you- is the glass half full or half empty?
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