News / Asia

    Australia's Economy Faces a Year of Challenges

    Tourists take pictures in this long exposure photograph as the Sydney Opera House is lit with green lights during St Patrick's Day celebrations in central Sydney, March 17, 2010.
    Tourists take pictures in this long exposure photograph as the Sydney Opera House is lit with green lights during St Patrick's Day celebrations in central Sydney, March 17, 2010.

    Australia's resources-powered economy is facing a year of challenges.  Although the mining sector continues to soar, other industries - most notably manufacturing, tourism and finance - are shedding jobs in an increasingly two-speed economy.  Although Australia has managed to avoid the worst of the global economic crisis, the government warns that 2012 is likely to be a particularly tough year for employment.

    Australia’s economy has been the envy of the developed world. But the "Wonder Down Under" is beginning to show a few cracks.

    Strong currency

    The strong Australian dollar is blamed for the loss of hundreds of jobs last month at Toyota in Melbourne, exposing the fragility of the country’s manufacturing sector.

    "Shocking news for everybody, you know. For our families, you know, 350 people is really a lot," says a Toyota worker.

    The Australian government says it is confident the economy will grow at a solid rate this year, although the Manufacturing Minister Kim Carr concedes that there will be some pain along the way.

    The fact of the matter is that the high Australian dollar is causing great, great damage to our international markets, to our export program, because it is pushing the price up for Australian goods. And, as a consequence, the demand for Australian products is falling," said Kim Carr.

    Mining boom

    Australia avoided the worst of the global slowdown thanks to a mining boom fueled by sales of iron ore to China.  However, there are concerns that any easing of Chinese demand will cause problems.

    "Australia is going to basically find that the global financial crisis that they thought they’d dodged is coming home to roost. Australia’s got problems on the commodity front through the Chinese slowing," said author and analyst Satyajit Das.

    Das believes the soaring Australian dollar, which has doubled in value against its U.S. cousin in the past decade, is to blame for increased economic uncertainty.

    "The high Australian dollar is obviously making things very difficult for manufacturers, for tourism, for health tourism, for educational services and we are now seeing signs of that in terms of the slackening demand for labor, particularly traditionally white collar areas, like in financial services," added Satyajit Das.

    Higher unemployment ahead

    Unemployment in Australia is at just above five percent. That figure is expected to rise this year. The non-mining sector is likely to suffer most. This week, 1,000 bank workers were told they were losing their jobs.

    Fariborz Moshirian, a professor of finance at the University of New South Wales, believes Australia should not be so reliant on exports of commodities to China.

    "There is no question that, if in China we are going to see a massive decline in economic activities," said Moshirian, "Australia is going to basically feel it very harshly simply because we don’t have a strong manufacturing or indeed banking sector to compensate for income losses associated with the mining boom. And, for that very reason [the] Australian economy requires a massive restructuring as we are benefiting from the mining boom so that our manufacturing, our financial services and our tourism industry will become more productive, more competitive and also our economy becomes more balanced rather than simply relying on one particular sector in the medium term." 

    But the head of the New South Wales Minerals Council, Stephen Galilee, believes the resources sector will continue to underpin the economy for many years to come.

    "People have been forecasting the end of the resources boom for many years now and the end of the boom is nowhere in sight," he said. "The impact of global uncertainty has the potential to slow the rate of growth of that boom. But we are optimistic that demand for our mineral resources will continue to increase across the decades ahead."

    However, Australia’s miners are worried that a carbon tax will damage their international competitiveness and cost jobs. The levy will force many big polluters to pay for each ton of carbon dioxide they emit and is scheduled to be implemented in July.


    You May Like

    US Lawmakers Vow to Continue Immigrant Program for Afghan Interpreters

    Congressional inaction threatens funding for effort which began in 2008 and has allowed more than 20,000 interpreters, their family members to immigrate to US

    Brexit's Impact on Russia Stirs Concern

    Some analysts see Brexit aiding Putin's plans to destabilize European politics; others note that an economically unstable Europe is not in Moscow's interests

    US to Train Cambodian Government on Combating Cybercrime

    Concerns raised over drafting of law, as critics fear cybercrime regulations could be used to restrict freedom of expression and stifle political dissent

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Baghdad Bikers Defy War with a Roari
    X
    June 28, 2016 10:33 AM
    Baghdad is a city of contradictions. War is a constant. Explosions and kidnappings are part of daily life. But the Iraqi capital remains a thriving city, even if a little beat up. VOA's Sharon Behn reports on how some in Baghdad are defying the stereotype of a nation at war by pursuing a lifestyle known for its iconic symbols of rebellion: motorbikes, leather jackets and roaring engines.
    Video

    Video Baghdad Bikers Defy War with a Roar

    Baghdad is a city of contradictions. War is a constant. Explosions and kidnappings are part of daily life. But the Iraqi capital remains a thriving city, even if a little beat up. VOA's Sharon Behn reports on how some in Baghdad are defying the stereotype of a nation at war by pursuing a lifestyle known for its iconic symbols of rebellion: motorbikes, leather jackets and roaring engines.
    Video

    Video Melting Pot of Immigrants Working to Restore US Capitol Dome

    The American Iron Works company is one of the firms working to renovate the iconic U.S. Capitol Dome. The company employs immigrants of many different cultural and national backgrounds. VOA’s Arman Tarjimanyan has more.
    Video

    Video Testing Bamboo as Building Material

    For thousands of years various species of bamboo - one of the world's most versatile plants - have been used for diverse purposes ranging from food and medicine to textiles and construction. But its use on a large scale is hampered because it's not manufactured to specific standards but grown in the ground. A University of Pittsburgh professor is on track to changing that. VOA’s George Putic reports.
    Video

    Video Orphanage in Iraqi City Houses Kids Who Lost their Parents to Attacks by IS

    An orphanage in Iraqi Kurdistan has become home to scores of Yazidi children who lost their parents after Islamic State militants took over Sinjar in Iraq’s Nineveh Province in 2014. Iraqi Kurdish forces backed by the U.S. airstrikes have since recaptured Sinjar but the need for the care provided by the orphanage continues. VOA’s Kawa Omar filed this report narrated by Rob Raffaele.
    Video

    Video Re-Opening Old Wounds in a Bullet-Riddled Cultural Landmark

    A cultural landmark before Lebanon’s civil war transformed it into a nest of snipers, Beirut’s ‘Yellow House’ is once again set to play a crucial role in the city.  Built in a neo-Ottoman style in the 1920s, in September it is set to be re-opened as a ‘memory museum’ - its bullet-riddled walls and bunkered positions overlooking the city’s notorious ‘Green Line’ maintained for posterity. John Owens reports from Beirut.
    Video

    Video Brexit Resounds in US Presidential Contest

    Britain’s decision to leave the European Union is resounding in America’s presidential race. As VOA’s Michael Bowman reports, Republican presumptive nominee Donald Trump sees Britain’s move as an affirmation of his campaign’s core messages, while Democrat Hillary Clinton sees the episode as further evidence that Trump is unfit to be president.
    Video

    Video New York Pride March A Celebration of Life, Mourning of Loss

    At this year’s march in New York marking the end of pride week, a record-breaking crowd of LGBT activists and allies marched down Manhattan's Fifth Avenue, in what will be long remembered as a powerful display of solidarity and remembrance for the 49 victims killed two weeks ago in an Orlando gay nightclub.
    Video

    Video NASA Juno Spacecraft, Nearing Jupiter, to Shed Light on Gas Giant

    After a five-year journey, the spacecraft Juno is nearing its destination, the giant planet Jupiter, where it will enter orbit and start sending data back July 4th. As Mike O'Sullivan reports from Pasadena, California, the craft will pierce the veil of Jupiter's dense cloud cover to reveal its mysteries.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.
    Video

    Video Tunisian Fishing Town Searches for Jobs, Local Development Solutions

    As the European Union tries to come to grips with its migrant crisis, some newcomers are leaving voluntarily. But those returning to their home countries face an uncertain future.  Five years after Tunisia's revolution, the tiny North African country is struggling with unrest, soaring unemployment and plummeting growth. From the southern Tunisian fishing town of Zarzis, Lisa Bryant takes a look for VOA at a search for local solutions.
    Video

    Video 'American Troops' in Russia Despite Tensions

    Historic battle re-enactment is a niche hobby with a fair number of adherents in Russia where past military victories are played-up by the Kremlin as a show of national strength. But, one group of World War II re-enactors in Moscow has the rare distinction of choosing to play western ally troops. VOA's Daniel Schearf explains.
    Video

    Video Muslim American Mayor Calls for Tolerance

    Syrian-born Mohamed Khairullah describes himself as "an American mayor who happens to be Muslim." As the three-term mayor of Prospect Park, New Jersey, he believes his town of 6,000 is an example of how ethnicity and religious beliefs should not determine a community's leadership. Ramon Taylor has this report from Prospect Park.

    Special Report

    Adrift The Invisible African Diaspora