In the last couple of weeks, I have had the good fortune (or not) to be involved in a banking lunch and a budget dinner. Lucky wine has been served at both functions so trying to stay awake has been the biggest challenge, but here’s what I heard during both functions..
The Australian economy is in great shape - actually the whole world is in great shape, it is the first time in a long time the whole world is succinct.
For Australia, Melbourne is outdoing Sydney, Tasmania is going great guns, Perth is finally on the return but poor South Australia….seeing the graphs of where the infrastructure spending has been announced, SA has no marginal seats, so no infrastructure money is being spent on them! NSW doesn’t get any new infrastructure spending but then again with so much going on, that’s not a bad thing!
The budget delivers low to middle income earners about $500 a year, (I was thinking a new car payment or 2 more beers - bought in Sydney at the pub!) and more money for the baby boomers - it is always about the retirees.
Anyway, back to Economists, China and USA will come to fisticuffs soon. The Chinese products have been growing in USA, but the Chinese regime have kept all things USA out of there. Donald is pulling back on this, so a trade war is looming. What that means, is anybody’s guess at this point. Intellectual Property (IP) is becoming a real issue too, there are more Chinese hackers then there are USA Federal Agents! Need to be careful with what you are creating online.
Investors are leaving the housing market which is in decline, but really, a 20% increase in property prices in the last couple of years to a drop of 3% - at the moment, who is complaining? At least there are properties on the market to buy now!
Overall Australia is in a good shape, Agricultural spending is up and regional centres are doing much better. Equipment Financing is a growing market with medium to larger companies now buying equipment again.
With all this good news is it time for interest rates to start rising again? Well nobody can say, and as the waiter fills up my glass again, I think we will worry about that in 2019…