Morning Briefing: No-recession generation brings complacency, Australia says

Australia’s 25 year-run without a recession is fostering a complacent attitude toward the economy... Perth hits record high vacancy mark...

Morning Briefing: No-recession generation brings complacency, Australia says
No-recession generation brings complacency, Australia says
Bloomberg: Australia’s 25 year-run without a recession is fostering a complacent attitude toward the economy and preventing the prudent budget management needed to avert trouble, Treasurer Scott Morrison said.

In his first major economic speech since the government was returned with a razor-thin majority, Morrison said Thursday a generation has grown up not seeing unemployment above 10 percent, mortgage rates at 18 percent or inflation as a problem. He warned the budget must be returned to the black to insulate against future shocks and private investment had to increase to boost the economy’s productive capacity.

“I recognize that in the absence of a ‘recession we have to have,’ or the threat of ‘becoming a banana republic,’ achieving necessary change will be more frustrating and more difficult,” Morrison said in a speech at a Bloomberg business breakfast in Sydney. “But it is no less necessary, and achieving it this way is far better than the alternative.”

The treasurer appeared to be channeling the central bank chief and urged Australians to ask themselves “a few hard questions.” Governor Glenn Stevens similarly suggested this month it was time for a “hard-nosed” discussion about reform. Morrison’s task is tough: he wants to fix the budget hole without raising taxes or cutting spending in an electorate that refuses to give up services. Meanwhile, the political class has largely gone cold on making the case for economic reform to underpin growth.

Perth hits record high vacancy mark  
Landlords across numerous markets in Australia should be bracing themselves for higher vacancy rates according to a respected voice in the industry.

Figures from SQM research show Australia’s national vacancy rate sat at 2.5% at the end of July, which was 0.1% higher than the national vacancy rate recorded at the end of July 2015.

Compared to June, there was no increase in the national vacancy rate over July; however the majority capital city markets did see a monthly increase in vacancies.

Over the month Perth’s vacancy rate saw the biggest increase, climbing 0.2% to 5.2%, which is a record high mark for the city.
(Your Investment Property)

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