David Llewellyn-Smith writes in
Australian entitlement is in for a great shock that the Australian economy is bloated and uncompetitive and we have a reckoning on the way.
We have, in short, done absolutely nothing to prepare for what is
coming. We have pretended it's not happening in the hope that something
will come along.
None of this is new but I wish to make two points
today. First, this week has shown that despite our denial, the
adjustment is accelerating. Throughout the last three years,
MacroBusiness has argued that we face a long and arduous period of below
trend growth because of our multiple adjustments. And so it has proven
to be.
Despite a brief spike in growth in 2011/12, the post-GFC
period has been the lowest average growth period anyone can remember. We
are now growing more slowly than the supposedly broken United
States. This week's national accounts illustrated why very clearly. The
terms of trade correction which is central to the adjustment is pulling
down national income.
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