I founded The Macroeconomic Project in order to go beyond the headlines to understand what’s driving the Australian economy. I don’t aim to be the first one out with the top line ‘news’ because there is always a deeper insight which I aim to uncover and share here.
The last time Australia was officially in recession, I was just graduating from university with my business/economics degree. That was a long time ago. It hasn’t been completely smooth sailing for the economy since then and we’ve had a little bit of luck on our side. But we now find ourselves at an important juncture. After a massive boom in mining investment, Australia is now faced with anaemic growth prospects, many economic headwinds, some tailwinds and a political debate (or, more accurately, a reform agenda) that doesn’t seem to go much deeper than tax cuts as the silver bullet.
We find ourselves on the other side of the mining boom, saddled with the highest ever level of private debt, mostly in the form of mortgage debt. The economic ‘transition’ so far has been based on perpetuating the great misallocation of capital – from productive investment to residential mortgage debt. The ‘new economy’ is based on closing factories and using that land to build an ever-growing glut of apartments and on increasing our debt burden just to swap established houses for higher and higher prices. We seem to be a long way from the Australia that our 29th Prime Minister, Malcolm Turnbull, thinks we should be:-
“The Australia of the future has to be a nation that is agile, that is innovative, that is creative”
The main themes of this blog revolve around key economic performance measures, debt and the credit impulse. My work is not based on any agenda or particular economic ideology – I’m here to observe, analyse, chart and write. This is not investment advice in any way, shape or form.
I hope you find it interesting. You can email me on firstname.lastname@example.org