Strong Australian dollar poses economic danger

It's a country that appears to have defied the global financial crisis, enjoying years of consecutive growth and a soaring currency.

But it's not all "wonder down under" for Australia's economy, and as the government prepares to deliver its budget, there could be tougher times ahead.

Despite a commodities-fuelled boom, high government spending, the cost of widespread flooding and a drop in corporation taxes ,mean cuts are likely.

But out of direct control of the government is Australia's soaring currency. For the first time since it floated, recent weeks have seen the Australian dollar worth considerably more than its American equivalent: and that's hurting exporters.

Andrew Thomas reports from Sydney.

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[HelmetBlissta]

Ah-diddums to the tourist industry, What about real people, the cost of living is high in Australia. Fuck the economy, fuck the mining industry.  Nationalise the mining industry, why should a few greedy bastards be able to dig up the ground and sell it. It's everyones land.

[doc7474]

@juanmora19910209 It's based on nothing, the U.S. dollar used to be backed by gold at least. Now they can just literally create money with a couple keystrokes. This is what happens when we allow politicians to control the money supply. Central banking(i.e. Federal Reserve) cause these huge problems with the economy. They print money until our economy is where it is today. We are like a huge house of cards being held up by bubble gum and scotch tape.

[Navium]

Another sad fact is, that greedy gamblers from everywhere blow up the housing price bubble. How naive (and stupid) can you be to believe that it will always go up?

Australia is the most expensive housing market in the world (and the houses are rubbish on top of it). In the US the houses are as bad, but cost only a third. Even in Germany people can build houses with top notch technology and quality for a lot less. Australia is simply digging its own grave...sadly...

[Navium]

Well...I have noticed that the Australian government is not amongst the most competent in the world.

When the tsunami hit Japan and speculators pushed the Yen up, the Japanese government printed money like mad to push the gambler out of the yen..and it worked.

Australia should also print money like mad to make it unattractive for gamblers (it is a risk asset) and before the inflation starts to rise (which takes 1.5-2 years), they should take the extra money off the market. That helps Exporters

[sdogg2009]

@Herimia the min wage in Australia is $15.50 and the min wage in USA is around $7 in most states! So in actual fact our lower workers have in cheaper!

[Dimitri0809]

@1dschamp

Well your not exactly being generous about your offer, it is a really high price why does Australia have to bargain the deal for the highest price why can't australia and china bargain for the lowest price it isn't exactly making a lot of world progress by charging the highest price it just means it's going to take longer for the Chinese to pay it all back.

Everything is just a money making thing these days not really out to benefit people.

[1dschamp]

@Dimitri0809 You think we should give is away to the Chinese for free??

[Dimitri0809]

Australia is fucking greedy how can they charge such high prices for commodities..

[ajgolfer1]

@HelmetBlissta yeah lets all move to north korea a true workers paradise

[TheTopBloke]

@HelmetBlissta Nationalizing the mining industry would not be the answer. Reducing the BS small businesses deal with would help.

[Herimia]

@AusPolitico transformed*