004

RECENT AUSTRALIAN ECONOMIC TRENDS

By David Keane, 26/December/2003

PO Box 582 , Gosnells 6110, WA

Electronic copy available at Internet address: http://www.nw.com.au/~keane/civilrep/Part4/47B2003Update.htm

If the level of Australian credit blowout of the past four years is to be duplicated or exceeded in the next four years, will this lead to national bankruptcy over the next four years, as has previously happened to Argentina and Mexico?

I, as writer of this article, claim no educational or professional credentials to be able to provide an authoritative answer. And yet I need none. The authority for this article comes from the data used, for that data comes fresh from the Reserve Bank of Australia 's own most recently published statistical tables. Let that data speak for itself, for it paints a grievous and alarming picture. Clearly, the question heading this article must be asked. But I leave it to the reader to ponder the data and find his or her own answer.

Any assessment of Australian financial management and bank regulatory policy, must begin with an assessment of the current state of Australia ’s financial affairs. In particular, it is vital that we analyse such significant national financial indicators as Gross Domestic Product, Foreign Equity, Foreign Debt, Foreign Liabilities, Domestic Credit, and Total Credit. Figures for these data are available on Internet at the website for the Reserve Bank of Australia (http://www.rba.gov.au/statistics/ ). In this chapter, I have taken June data for the past 15 years, from June 1988 to June 2003. You can confirm these data by looking up Foreign Debt, Foreign Equity and Foreign Liabilities on Reserve Bank table H4, seasonally adjusted Domestic Credit on table D2, and Gross National Product on table G10.

These figures are provided by the Australian Reserve Bank every quarter, about 6 months late. On 18/December/03 , the Australian Reserve Bank published the June 2003 figures for table H4, and so now we have available all the information for all these statistical categories up until the end of June 2003.

I provide these figures annually from June 1988 until June 1999, and for the last four years, June 1999 to June 3003, the data are provided quarterly so to provide closer inspection of recent economic trends.

I simply rearrange the Reserve Bank figures which helps with comparison and trend analysis, and so it can be easily understood by the lay person.

Table A

In Table A, the "Date" refers to quarterly figures provided by the Reserve Bank.

"Equity" refers to total Foreign Equity (foreign ownership of Australian assets).

"Debt" refers to total Foreign Debt.

"Liabilities" refers to Foreign Liabilities = Foreign Equity + Foreign Debt.

"saDomCr" refers to seasonally adjusted Domestic Credit.

"TotalCr" refers to Total Australian Credit = Foreign Equity + Foreign Debt + Domestic Credit.

Date	Equity	Debt	Liabilities	saDomCr	TotalCr
	A$millions	A$millions	A$millions	A$millions	A$millions
Jun-88	74,047	138,130	212,177	247,403	459,580
Jun-89	89,085	161,875	250,960	298,734	549,694
Jun-90	98,676	184,239	282,915	333,468	616,383
Jun-91	105,156	197,661	302,817	340,370	643,187
Jun-92	113,172	217,956	331,128	335,972	667,100
Jun-93	127,597	238,541	366,138	342,824	708,962
Jun-94	158,290	246,483	404,773	366,992	771,765
Jun-95	172,046	268,245	440,291	401,256	841,547
Jun-96	193,165	275,531	468,696	450,617	919,313
Jun-97	217,078	302,846	519,924	488,946	1,008,870
Jun-98	249,495	346,971	596,466	540,207	1,136,673
Jun-99	286,979	359,840	646,819	590,169	1,236,988
Sep-99	287,692	373,303	660,995	602,940	1,263,935
Dec-99	316,191	388,474	704,665	613,139	1,317,804
Mar-00	331,296	408,981	740,277	630,065	1,370,342
Jun-00	338,121	416,824	754,945	647,815	1,402,760
Sep-00	339,757	453,263	793,020	665,385	1,458,405
Dec-00	317,115	470,251	787,366	682,238	1,469,604
Mar-01	318,487	524,591	843,078	698,253	1,541,331
Jun-01	355,360	493,971	849,331	707,994	1,557,325
Sep-01	328,950	515,493	844,443	722,231	1,566,674
Dec-01	362,575	505,139	867,714	736,604	1,604,318
Mar-02	361,402	506,596	867,998	749,831	1,617,829
Jun-02	351,800	524,433	876,233	785,201	1,661,434
Sep-02	337,990	548,052	886,042	809,587	1,695,629