No, he isn’t, but there are some similarities.
(For my international readers this is purely a local blog, but the next one is written for you).
One of Australia’s most eminent economists writing under the nom de plume, Henry Thornton, is a sceptic when it comes to official unemployment statistics. He thinks that the official unemployment statistics greatly understate the true position here in Australia. Since Queensland has the highest mainland official unemployment rate, that implies Queensland has a bigger real problem. Add the officially unemployed (you only have to work one hour a week) to the underemployed, those in family businesses that are employed but not taking home any cash, and those that have given up looking for work (statistically eliminated from the data), and you get a Spanish type real unemployment number, especially in people under 25 and over 50. You can see the effect of that in the streets if you care to walk, the For Lease signs, and the closed and emptying cafes and coffee shops.
Official unemployment data is always a lagging statistic. The end of the construction cycle in mining, tunnels and apartments is upon us, and, with the AUD at USD 1.05+, expect to see more business closures in all sectors and higher official and real unemployment numbers.
That doesn’t make Queensland Spain. Sorry Campbell.
The big difference is that, whilst Queensland is having a property bust in coastal and lifestyle regions, the effects on the banks is spread across the nation and internationally. If these property risks were purely restricted to Queensland banks, then, yes, we would have Spain. Some of those banks would need a bail out. Fortunately, the Bank of Queensland was able to raise nearly AUD 500 billion in new equity.
www.davidmillhouse.com.au
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