Ausbuy

Welcome!

July 22nd, 2007

This site has been developed by Australians and is hosted by an Australian company.

We hope that you will enjoy www.ausbuy.com.au and frequently refer to it. It will provide commentary on current events from a position that is not aligned to any political party. Our aim is to promote dialogue and honest debate on issues that are important to us. For this to be successful we require your comments on our articles and these will be published. Please send them to info@ausbuy.com.au.

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Australia’s Future

July 22nd, 2007

In a fast changing world Australia is at a point where choices have to be made which will fundamentally shape the Australia which will be inherited by future generations. Some positive steps are being taken, but those developments have taken place in an atmosphere of stealth, as neither political party is prepared to admit to a long term problem. We at Ausbuy believe that the first step in solving problems is to recognise them, and we will now identify the most serious ones:

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The Economy

July 22nd, 2007

The media is full of stories about Australia’s buoyant economy. Details about our increased debt level get less attention. The boom is being financed by other people’s money. Australia is running a huge balance of trade deficit, yet the prices being paid for our minerals and the volumes being sold are the highest in our history. The deficit is being financed by borrowing overseas and by selling assets. We are proudly told that this is private debt and the government has a surplus and this increasing debt doesn’t matter. This, of course, is not a valid argument as the debt must still be serviced and the money required for servicing it continues to increase, and this, together with our insatiable demand for imported goods, means that Australia’s overseas debt increases at an accelerated rate. The shortfall in our Balance of Payments, can at this point in time, be met by borrowing and asset sales, but we should still be aware of possible clouds on the horizon. Among these are:

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How Safe Is Our Food?

July 22nd, 2007

Australian’s have grown up taking their “clean, green” food for granted. The combination of vigilant consumer groups, a well organised bureaucracy and powerful supermarkets have combined to ensure that food production in Australia conforms to “world best practice”. The farmers and producers have willingly co-operated, but it must be recognised that these practices have added to the cost of Australian produced food. When asked about this issue, the consumer has indicated that the government should ensure that these standards be enforced and should hold anyone who breached their standards fully accountable.

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Economic Reality?

July 22nd, 2007

The above heading may seem a contradiction in terms and an old joke springs to mind. If you have a meeting of two economists what do you get? Three different opinions. That is a somewhat harsh judgement, but in the area where economics meets politics you can understand why the public has this view. Widely differing policies are proposed and justified by economic models supported by differing assumption. The starting position is often arrived at by dubious measurements which oversimplify complex situations. If this is wrong it does not matter how good the mathematics is. There is also a tendency to ignore the behavioural changes as a reaction to external events. Among the areas that cause concern are:

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China - The Economic Miracle. Can It Last?

July 22nd, 2007

There is no doubt that the last 10 years was, in economic terms, the decade of China. It has recorded double digit growth, and in doing so, deservedly earned the title of the factory of the world. It almost single-handedly kept world inflation at bay. Multinationals either ordered their branded products from Chinese suppliers, or established their own factories to manufacture there. They utilitised an apparently endless stream of eager and smart workers who were prepared to work hard for very low wages, and work the antisocial hours required by a modern factory. These factories use some of the most modern machinery available. The combination of treble shifts, low paid, hard working labour and modern production technology, have resulted in prices for manufactured goods that the rest of the world cannot match.

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Australia, Mining and The Dutch Disease

July 22nd, 2007

Is the current mining boom in Australia’s best long term interest? Certainly many people, particularly politicians and investors, like the short term effects. The country’s budget is in surplus and share prices are rising. These outcomes are unarguable, but what about the long term effects? Before we look at Australia, we should consider the Dutch Disease.

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Outsourcing; Is It Solving Problems or Creating Them?

July 22nd, 2007

We have almost full employment in Australia so when we hear about a call centre moving overseas we don’t get too excited. We can be reasonably confident that the jobs lost will soon be replaced. Our companies are also pleased to be able to access skills which may be in short supply in Australia. However, we must remember that the real reason for outsourcing is to cut costs, by exploiting the low wages in developing countries. Before we take a relaxed view of outsourcing we should consider the following points:

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