Friday, August 05, 2011

FSC Wrap Up

The 2011 FSC conference closed today with a Q&A session with former PM John Howard. Here is how BlueChipper Paul Cheal saw it.

Q. What's the outlook for the Australian economy?

A. Everything is relative...certainly Australia is looking good compared to many other economies. That said, our optimism, so important for all businesses, is starting to fray.

Q. Why is optimism fading?

Three reasons (not given as partisan comments but an observation):
  1. We've been living off the 'fat' of past reforms (from both sides of politics) and past successes which has now seemingly stalled
  2. The current political situation (a hung parliament) is unprecedented
  3. The state of the world economy and the feeling that the worse of the North Atlantic Financial Crisis (it wasn't a global financial crisis) may not be behind us. While Howard is optimistic we won't dip into a second crisis, that optimism is not shared by all. 

Q. So should we be pessimistic?

Howard believes the fundamentals of the Australian economy are still sound. His reasoning? We came through the downturn better than most and we did that by going into the blast furnace with a thick coating, thanks to economic reforms.

Q. And on China?

Our best customer. Two very different cultures that have been thrown together by the forces of supply and demand. However two elephants are in the room:
  • China will grow old before it grows rich. It is an ageing society and in the not too distant future the population will peak, then decline and age. 
  • And there will be a time as the Chinese people enjoy economic freedom, they will want similar political freedoms. 
Q. What of the Carbon Tax?

As a self confessed unreliable witness John Howard also says he is agnostic on climate change. While accepting that four years ago when he lost the election to Kevin07 he acknowledges that there was a sense Australians were open to a climate solution.

Q. Finally, this one from the floor: does the tea party make you look like a radical left winger?

Flattery will get you everywhere said Howard.

And that's a wrap from the FSC conference. Now back to navigating the changes ahead.

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