Australia

OK, I am a little jealous. This is a country rich in natural resources and the size of Europe but owned by just 25 million people. It has great climate and biodiversity and the vast majority of people live right on the coast, enjoying outdoor living. It is an old land mass and indigenous people have been here for 50,000 years, but as ‘Australia’ since mass European immigration, it is a young nation and economy, unimpeded by history and tradition (as an example. in terms of protecting and sustaining its nature it is trying to get things right from the start, compared to older countries with vastly depleted natural stock). The indigenous Aboriginals represent just 2.5% of the population now, and what is of particular interest to a Brit like me, is that around 80% of Australians can trace their descent back to the UK and Ireland, a migration that continues. More so than USA, which is more multicultural, that makes Australia ‘New England’, and visiting the country has left me with a respect for those who have had the bravery to migrate to the other side of the world for a country that not only offers good living, but excellent future potential. This is currently the 13th largest economy in the world but I believe this century it can become one of the leaders. For the UK, I don’t predict anything too terrible, but a continued gradual relative decline in wealth compared to other countries with greater natural resources and less debt, such as Australia.

It is not without problems of course. Like the USA,  nature challenges the country. A decade of drought and bush fires, followed by a couple of years of floods, make up recent history. The  interior of the country is very dry and tough, which is a reason why most live on the more fertile coasts. Many of the world’s most dangerous animals live here, from tiny killer spiders to saltwater crocodiles. But such natural threats did not stop the USA from becoming the world’s leading economy, and I suspect it won’t impede Australia too much either, because the two countries have something else in common: almost everyone is an immigrant (or descendant of an immigrant) who came in search of a better life. In other words, they are both nations of ambitious, adventurous people. But Australia, as an economy, is younger than the US. It was only when the USA successfully fought for independence that the Brits turned to colonising Australia, 200 years ago, and it is only in the last half century that Australia really began to find its feet. It was the only major nation to avoid a recession around 2008 and is enjoying a particularly golden decade on the back of the secular commodities bull. The result is an expensive Aussie dollar and a cost of living which to me, as a British traveller, was higher than in London. It was impossible to avoid paying what felt like significant overpricing for food, accommodation and transport. However, if a new secular commodities bear erupts for the next 10 years, I suspect the Aussie dollar will give back some of its strength, and the economy may slow too. Nonetheless, Australia is still just scratching the surface of its potential, and the population is expected to grow to over 40 million by 2050, with continued migration from other high density countries into Australia’s wide open spaces.

My Australia visit comprised a road trip from Sydney to Melbourne including the Great Ocean Road to the west of Melbourne. Sydney is supposed to be one of the most beautiful cities in the world, and having now seen it, I concur. It is glamourous and pristine and the waterside setting is optimised. Melbourne has a more relaxed, student feel to it, but also has its treasures in its ‘lanes’. The scenery between the two cities and beyond was beautiful all the way, and the wildlife interactions with kangaroos, wallabies, seals, penguins and more a real pleasure. One negative was dated motel-style accommodation (often this was the only option), and one positive was never paying for parking anywhere. If I was to repeat the journey, a motorhome might therefore be a better option. The empty roads made for great driving, and it is easy to find your own deserted bit of coast. I found the Australians themselves polite and friendly and whilst clearly showing some shared characteristics with the Brits, also their own laidback approach, not taking life too seriously. Very clear information was a theme: wherever you walk, drive or stay, you won’t ever be short of signs and instructions, and everyone seems to conform rather than abusing the rules.

The Aboriginal population lives largely together in certain designated parts of the country, but this group is troubled, with unemployment, drugs and suicide problems. For a long time they were treated badly by the European settlers, and whilst that has now been officially rectified, it is only very recent, in the last 20 years. It is they who have paid the price for this new flourishing nation. For 50,000 years they owned this country and in just 200 years they lost their nomadic lifestyle, became second class citizens, and now under official equality they are still struggling to adjust.

This sadness aside, I found Australia a very tempting prospect. I would very much like to be a part of this lovely country and its bright future. But the bravery of those who made the migration here from Europe, is that they left behind friends and family – it really is the other side of the world. So, instead I intend to come back and travel the rest of the country and I will look for investment opportunities in Australia from my armchair. I don’t see those investment opportunities right now – I believe a secular bear in commodities is ahead and that will pull back the Aussie dollar and economy to some degree, but once at a more reasonable level I will be looking. I end with some pics:

Sydney:

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A wallaby:

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Harbour-side entertainment from a wild seal, some cormorants and a large ray under the water with his tail out:

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Koalas spend most of the day asleep in the eucalyptus trees:

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Hanging out with the kangaroos:

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8 thoughts on “Australia

  1. Australia is not only east cost. I live in Perth and I can say Western Australia is beautiful. Such as European, Australia is not about cities it is about the nature especially the outback.

  2. Hi John

    being a Brit myself who emigrated to Australia over 7 years ago i find your summation of all of your experiences and observations extremely accurate. From an economic perspective the country is slowing down due to the relative strength of the dollar which in someway a double edged sword which has affected the manufacturing industries here in Australia. Government sector unemployment is likely to continue along its upward sloping trend as the region eventually gets dragged down by the rest of the world. Mining only makes up a smaller % of Australias work force with the majority of people in retail, it will be interesting to see what happens when things really start to turn down.

    From a personal perspective the country can often feel isolated from the rest of the world and family is certainly missed. But on the same token lifestyle here is second to none but you pay for that too.

    Enjoy the rest of your trip, if you can try to make it to the barrier reef.

    Regards
    Anthony
    (Change-In-Trend)

  3. Fantastic photographs. Australia is ideally positioned to make the most of the Asian dash for growth soon. The slowdown in China has inevitably slowed down Australia’s markets and the ASX 200 is slightly overvalued by some P/E metrics. There may be a risk of a housing bubble too. Both Australia and Canada are seen to be at risk of experiencing a housing bust soon, given the outperformance of recession-hit nations they have enjoyed since 2008.

    Dr Mark Carney is leaving his job in Canada to take over from Mervyn King at a time when Canada is starting to worry about experiencing a housing bust. Both Australia and Canada are rich in physical resources but money has poured into housing and has been kept inflating despite the financial crisis. When interest rates start to rise in Canada and Australia, I would be cautious, because it may trigger a housing bust.

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