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

At Khmer Rouge Court, Long-Awaited Verdict Approaches

First phase of trial, which is coming to an end, has focused on forced exodus of Phnom Penh in 1975 - and now many are hopeful justice will be served More

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities More

Video Information War Rages Alongside Real One in Ukraine

Downing of Malaysian airliner, allegations of cross-border shelling move information war in war-torn country to a new level 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.
Information War Rages Alongside Real One in Ukrainei
X
Al Pessin
July 31, 2014 8:13 PM
The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.