Australia's glass is at least half full.
That was the essence of RBA Governor Glenn Stevens' speech today as he addressed the American Chamber of Commerce in Adelaide.
And he's absolutely right. It's quite inexplicable how Australia can be in such a strong economic position compared to much of the developed world, yet still harbour such a nation-wide pessimism when it comes to our economic situation.
For some of the real fatcs, watch this video of Kochie explaining why we should feel pretty happy.
But here are a few extracts from the beginning and the end that should make you make you relax as we hit the weekend.
- The Opening - some extracts:
According to data published this week by the Australian Statistician, real GDP rose by over 4 per cent over the past year. This outcome includes the recovery from the effects of flooding a year ago, so the underlying pace of growth is probably not quite that fast, but it is quite respectable – something close to trend. Unemployment is about 5 per cent. Core inflation is a bit above 2 per cent. The financial system is sound. Our government is one among only a small number rated AAA, with manageable debt. We have received a truly enormous boost in national income courtesy of the high terms of trade. This, in turn, has engendered one of the biggest resource investment upswings in our history, which will see business capital spending rise by another 2 percentage points of GDP over 2012/13, to reach a 50-year high.
...We live in a global environment of major uncertainty, largely because of the problems of the euro zone. Nonetheless, an objective observer coming from outside would, I think it must be said, feel that Australia's glass is at least half full.
...Yet the nature of public discussion is unrelentingly gloomy, and this has intensified over the past six months. Even before the recent turn of events in Europe and their effects on global markets, we were grimly determined to see our glass as half empty. Numerous foreign visitors to the Reserve Bank have remarked on the surprising extent of this pessimism. Each time I travel abroad I am struck by the difference between the perceptions held by foreigners about Australia and what I read in the newspapers at home.
- The conclusion:
The Australian community has understood that we can’t base growth persistently on falling saving and rising debt and that is forcing changes to business models. But it has to be said that the return of a certain degree of thrift actually strengthens our medium-term position. If we can marry that to a focus on incrementally improving the way we do things – lifting productivity – there is actually a lot to look forward to. For Australians, the glass is well and truly half full.