We have a habit of complaining about the condition of the economy. It’s ingrained into our consciousness, so much so that we don’t even question the reality. Australia, according to most reports and studies, is one of the most stable, richest economies in the world. The average Australian was found to be one of the richest in the entire world, with less than 10% of the country’s population living under $10,000 a year (far, far below the global average of 70%).
In the past 30 years, the country has experienced a steady level of development as well. On an average, the country has experienced 3.3% of annual growth, which is no mean feat. Hardly any countries in the world have been able to experience such a peaceful economic growth. This growth has been so steady that there are a number of youth in the country that have never experienced an economic depression in their lifetime.
The country has been lucky enough to be situated in the fringe of global economic battles in this century, which has given it a unique stability one can not find in other situations. The country has a few problems, sure, but things are not as bad as they could have been, and that is worth celebrating.
Australia and a number of other countries are experiencing a fall in the price of oil. This long awaited good news comes after a period of unhappiness about the direction in which Australia’s economy is headed.
The drop in oil price comes because of the fact that we officially have more petrol than we are actually using. The prolonged period of trouble and strife in the Middle East combined with the excess supply of oil both caused a reduction in the price of petroleum, diesel and other related products in Australia. It’s expected that we will be seeing bowser prices we haven’t seen in a long time now.
This is certainly good news for all motorists, who will be spending lesser money on travel. The reduction in aviation fuel price means that flights can be expected to cut down on flight costs a bit too. Even couriers and post will cost lesser, if this phenomenon lasts a little longer. It is expected that cargo prices will also be going down soon. In fact, one can expect prices of perishables to go down as well (since the perishables are the products that are delivered on a daily basis and will be affected by price of transport).
A number of industries will be affected positively and negatively by this falling trend, but the long term impact is yet to be fathomed.
The cost of construction is on a historic high in Australia. Over the past year, the cost of building has increased by 4% which is not just higher than the historic average, but is also higher than the growth over the past five years. The housing market is incredibly buoyant right now, and it has affected the cost of construction throughout the country.
The buoyancy of the housing market might have increased the profit margins of the construction companies in Australia, and increased the cost of all equipment too. This situation has not done anything to increase the wages or the benefits of the people involved in construction work. The construction workers are not responsible for this increase in construction cost, and they are certainly not reaping the benefits of the same.
Houses and office spaces have become more expensive to buy, but the rents have not gone up in a proportionate manner. In fact, the cost of renting is at an all- time low since after the 2000s. While this might not be good news for people looking to buy houses now, or for people trying to rent their home out, it is good news for people who already have a mortgage, for the RBA has reduced mortgage to a mere 2.5%.