News / Economy

As China Boom Fades, Economy Dominates Australia Election

Opposition leader Tony Abbott (R) listens to Australian Prime Minister Kevin Rudd during the People's Forum in Sydney, Aug. 28, 2013.
Opposition leader Tony Abbott (R) listens to Australian Prime Minister Kevin Rudd during the People's Forum in Sydney, Aug. 28, 2013.
Phil Mercer
Australians vote in a federal election on Sept. 7 to determine the members of parliament.  Prime Minister Kevin Rudd will attempt to win a third term for the incumbent Labor government against the opposition coalition led by Tony Abbott of the Liberal Party of Australia.

The state of the economy has become the key issue for voters. A decade-long mining boom fueled by demand from China is diminishing, and unemployment is creeping upwards.  As campaigning approaches its final week, both major parties are trying to convince voters they can guarantee future prosperity. 

Australia was fortunate to dodge the worst of the global financial crisis thanks to rich reserves of iron ore and coal.  But as China’s once-ravenous appetite for resources weakens, Australia’s healthy economic glow is beginning to fade.

Candidates' platforms

Prime Minister Kevin Rudd argues the country is at a crossroads, and must quickly adapt to life after its minerals bonanza.

"When I was first elected leader of the opposition, I argued long and hard that Australia had to prepare for the day when the mining boom would be over. The truth is in 2013 the China resources boom is over.  Right now we find ourselves at a crossover point for our national economy,” he said. 

In this election year, the conservative opposition says the Prime Minister will lead Australia’s economy astray through debt and mismanagement.

Opposition Leader Tony Abbott says his coalition can fix the economy.

“Under a Coalition government we will build a stronger economy, we will abolish unnecessary taxes, we will get the budget back into the black.  We will be a consultative, collegial government,” he said.

The Labor government, though, is hoping for economic salvation though a resurgence in manufacturing, agriculture, the building industry and tourism.

Unemployment here is low by global standards, but is at a four-year high at almost six percent.

Warren Hogan, chief economist at ANZ bank, says the jobless rate will continue to rise.

“The transition to the non-mining recovery is nowhere to be seen at this stage," he said. "There [are] hints of it, but it’s certainly not showing up in the contemporary data and hence the unemployment rate is likely to drift higher for the second half of this year.”

Mining boom ending

In some circles, there is a distinct sense of gloom about the future health of the economy as China’s demand for Australia’s resources weakens.

Former Reserve Bank board member Bob Gregory believes the end of the mining boom in Australia will be painful.

“If you think that we have avoided all the big shocks that Europe has, and in some sense our ability to avoid that is weakening, then it could be a substantial shock. For example, the mining investment doesn’t stop tomorrow, [it] will on for three or four years, but it is clearly running down and as it runs down it will be laying off workers.  There is a good chance - or a chance - that it will be a substantial shock,” said Gregory.

In these tougher times, having a long list of qualifications is no guarantee of employment.  Sitting at a cafe in Sydney, a man who identified himself only as Stuart recounted his difficulty finding a job.  He says despite holding a college degree and an ability to speak several languages, he has been jobless for more than two years.

“No, at the moment I am not working," he said. "I have got a bachelor in fine arts and I have got a diploma in graphic arts, so I cannot get a job. It is very depressing.  I mean, you can come here and have a coffee, then what?  You cannot sit eight hours here. When you go home it is the same situation; you are not working, your wife is not working.  So, it is a bit tight, pretty tight for all of us, basically.”  

Economists warn that Australia, which has been blessed by rich natural resources, is running out of time to re-ignite sluggish industries as the mining boom slows more rapidly than expected.  The election on Sept 7 is likely to hinge on which major party can convince voters that they can manage this economic transition the best.

You May Like

UN Watchdog Urges Israel to Probe Possible Gaza War Crimes

More than 2,100 Palestinians, most of them civilians, were killed in a 51-day war in Gaza, along with 67 Israeli soldiers and six civilians in Israel More

New Kenyan 'Thin SIMs' Poised to Transform African Mobile Money

Equity's new technology is approved in African nation for one-year trial, though industry leader Safaricom says thin SIMs could lead to data theft and fraud More

Solar's Future Looks Brighter

New technology and dropping prices are contributing to a surge in solar power More

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.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.