Among the significant points which have been identified are: -
- Australia did not avoid the fall-out of the Global Financial Crisis (GFC). The economic stimulus initiatives of the federal government simply delayed the impact. Then positive effects of the two stimulus payments to taxpayers in 2009 and 2010 concluded around August last year. Likewise, the enhancement effects of the home insulation and "Better Education Revolution" payments have declined to being marginal influences in the current marketplace.
- The prevailing depressed retail marketplace being experienced will persist for some 18 to 36 months. Further consolidations, rationalisations, mergers, acquisitions and business failures are projected for that period.
- At least two interest rate increases can be expected. The current Reserve Bank official interest rate of 4.75% is stimulatory. Over the longer term (20 years) the marketplace consensus is that a neutral interest rate is approximately 6%.
Increased instances of mortgage stress and foreclosure sales are forecast.
- Australia is not immune to the inevitable consequences of the sovereign debt issues of the Euro currency nations and the United States of America.
The nation's major banks source approximately 50% of their funds from overseas.
The prevailing official interest rates in the United States of America (effectively 0%) and the United Kingdom (.5%) are projected to increase during the ensuing 12 months, having immediate and widespread affects on the international funds marketplace.
- The value of the Australian dollar and the national inflation rate will be adversely affected by increases in overseas official rates.
These will arrest national and sectional growth rates and the lending policies of most, if not all, financial institutions.
- The Australian economy and the Federal Government's forecast surplus budget in two years time is exposed and vulnerable, with heavy reliance on demand from China (particularly for coal and iron ore and receipts from the mining sector). A change in the senior ranks of the Chinese government next year could have profound ramifications for Australia, it's mining industry and the Australian currency.