I suggest that much of Australia's good performance will turn out to have been a bit illusory. We were extremely lucky to experience a significant terms of trade increase from ~2003 onwards, as world iron ore and coal prices increased.
Unfortunately for us, we pissed all that windfall up against a wall. I don't think we posted a current account surplus at all throughout the resources boom years. Instead, Australian banks borrowed money from overseas to lend to Australians so they could sell houses to each other for ever increasing amounts every year. The Australian economy grew because we borrowed from overseas. Existing property owners got to feel richer. As soon as we start to pay back all the debt in a significant way, our economy will shrink. Just as the dependent to worker ratio has peaked. We will have nothing to show for it. Certainly not fast internets.
>Australian banks borrowed money from overseas to lend to Australians so they could sell houses to each other for ever increasing amounts every year. The Australian economy grew because we borrowed from overseas. Existing property owners got to feel richer. As soon as we start to pay back all the debt in a significant way, our economy will shrink.
Sounds like the exact same finance became dominant in every other Western economy.
Unfortunately for us, we pissed all that windfall up against a wall. I don't think we posted a current account surplus at all throughout the resources boom years. Instead, Australian banks borrowed money from overseas to lend to Australians so they could sell houses to each other for ever increasing amounts every year. The Australian economy grew because we borrowed from overseas. Existing property owners got to feel richer. As soon as we start to pay back all the debt in a significant way, our economy will shrink. Just as the dependent to worker ratio has peaked. We will have nothing to show for it. Certainly not fast internets.