This is why Australia is back in business
May 08, 2020
Back to business
It was a glorious sunrise down at Sunshine Beach this morning, and it’s become abundantly clear that Australia is getting back to business now.
The tradies were out in force, the jackhammers were very active as renovation and construction has resumed, coffee shops have reopened, and virtually every parking space in the suburb was full as the fear of COVID-19 has evidently dissipated.
The government will roll out its own plan for removing restrictions, but Aussies are using common sense and generally voting with their feet…and credit cards.
Lucky Country
AMP’s Shane Oliver this week highlighted three of the key reasons why Australia is so well placed to rebound from the shutdown as compared to other countries around the world.
Firstly, we have flattened the curve of the Coronavirus remarkably quickly, to the extent that there are now only 20 remaining cases in ICU (which represents less than 1 per cent of ICU beds capacity).
Secondly, we’ve always said that Australia was in a strong fiscal position thanks in part to the resources boom and some prudent Budget management.
And our fiscal response has been the biggest across the entire G20 – not in terms of loans and guarantees, which tend to saddle businesses and individuals with more debt – but in terms of direct fiscal support, actual spending and revenue measures.
The government stimulus packages were originally designed with a 6-month hibernation of the economy in mind, but we could and should be back to business much sooner than that.
Thirdly, China has long since brought COVID-19 under control, and as such is 2 or 3 months ahead of the rest of the world in ramping up its activity, with early signals suggesting infrastructure bullishness and a construction uplift.
This is terrific news for Australia, since China is now by far our most important trading partner, and we should benefit in terms of our resources economy.
Indeed the international trade figures for March showed a tremdendous uplift in the value of Aussie exports, especially to China.
Shock absorbers
Of course the second quarter of 2020 will inevitably produce some horrible numbers for growth and unemployment, and not only in Australia.
But a combination of monetary and fiscal responses should see us begin the great rebound in the third quarter.
I discussed this a little further in the short video here
Whenever you’re ready… here are 4 ways we can help you manage your own money and go next level wealth:
- Boom or Bust in 2021 – 20 minute online workshop for investors
Register for my next free online training - Boom or Bust? How to change your investment plan for 2021 - book in here
- Subscribe to our Top 100 Podcast for Investors
Listen in to our new podcast - The Low Rates High Returns Show - Apple , Spotify , SoundCloud
- Join our Implementation Program
We’re putting together a new coaching case study group this month for private investors. If you’d like to get the plan, tools and timeless principles for managing your money and creating next level wealth … just send an email to [email protected] with the word “Case Study” and we'll get you more details.
- Work with me privately
If you’d like to work directly with me and Stephen Moriarty directly to help you map out and action your next level wealth plan… just send an email to [email protected] with the word “private”… tell me a little about your situation and what you’d like help with, and we’ll get you all the details!
