There's little doubt that it's been a few strange years for Australia's economy. A two-speed economy has yielded some very positive developments for some, but not for all.
Right now there appears to be an uptick in consumer sentiment: retailers are expecting $15.1 billion to have passed through the tills over Christmas, the housing market has continued to be strong in many cities and household wealth was at a record high rising 6% over 2013. On those drivers alone, it's easy to say Australia is doing well.
On the flip side, not everyone is benefiting from better conditions. The divide between rich and poor has grown and those people not riding the wave are struggling to make ends meet as the cost of living also increases. More than 8,000 people lost their jobs in December and more are dropping out of the job search as older workers and the disenfranchised are finding it harder to find new work.
For employers, almost all economic and business surveys are showing that confidence is up but this has not translated into jobs growth.
According to Westpac, were it not for the fall in the participation rate, the actual unemployment figure would be 6.8%, not the current 5.8%. Deputy Prime Minister Warren Truss also made it clear that the Government isn't likely to be too popular this year because "… you can not reduce expenditure without having an impact on people."
As to how this will translate to the economy and business, many businesses appear to be waiting to see what the May budget holds.
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Last updated February 2014. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.