August 23, 2024
(‘THE LUCKY COUNTRY’ IS UNDER PRESSURE)
August 23, 2024
Hello everyone
AUSTRALIAN CORNER
The consequence of a slowing Australian economy
According to a new report, some 100,000 people could lose their jobs in Australia over the next 12 months.
The unemployment rate, currently at 4.2% could peak at 4.5%, according to the report.
This is slightly higher than the 4.4% peak in unemployment tipped by the Reserve Bank of Australia (RBA) by June 2025.
It attributes the stagnation of jobs and economic growth to the RBA’s interest rate hikes aimed at cutting inflation back to a rate of 2-3%.
David Rumbens, Deloitte Access Economics partner explained to SBS News that the labour market has continued to generate jobs so far in 2024, but not at a high enough rate to absorb all the additional job seekers that have come onto the labour market.
He further highlighted the probability that the slowdown would mean about 100,000 more people would be unemployed.
He explained that “high interest rates are taking money out of the economy that’s affecting consumer spending.”
Even though business investment is low, and business insolvencies are going up, Rumbens argued that the economic dip was not at recessionary levels, even though a lot of sectors would see it as a recession.
Consumer-facing sectors such as construction, retail, and hospitality are usually the hardest hit by an economic slowdown.
However, the focus on homebuilding and infrastructure should keep construction workers in high demand. Deloitte is forecasting a 2% expansion in the blue-collar workforce – 74,300 workers – this financial year.
In the same period, the group forecasts a dip in white-collar jobs of 0.4% or 23,599, as businesses “look to kickstart activity without increasing headcount.”
Australians are being squeezed…
According to the Australian Bureau of Statistics, almost a million people are now working two jobs or more to keep up with the cost of living.
Money.com.au warned the average Aussie needs to earn $107,730 a year to weather the cost-of-living crisis, with the figure even worse for homeowners at $120,294 a year to absorb rising interest rates too.
Mortgage repayment costs have jumped by $12,564 a year for a loan that averaged $555,600 in mid-2021, according to money.com.au expert Sean Collery, with average owner occupier home loan rates rising from 2.84 per cent to 6.03 per cent in the past few years.
Research shows that teachers and accountants, are among other professionals working two or more jobs to keep up with expenses.
Queensland teacher, Sebastian Kath, says the “cost of housing in Queensland is astronomical.” He is considering looking overseas “for better value for my money.”
Gold Coast, Queensland, Australia.
QI CORNER
SOMETHING TO THINK ABOUT
Cheers
Jacquie
