Home' Scoop : Scoop 52 Winter 2010 Contents scoop WINTER 2010 75
Remember 2007, back in the days when "sub-prime"
might have referred to the steak you got at an
ordinary restaurant and "credit crunch" referred
to the way you paid for it? In spite of the searing
effect of the Global Financial Crisis, the joys
and frustrations of an economy supercharged on
mining money are still fresh in the memory.
While the streets were jammed with flash
new cars and Perth s waters were choked with
shiny new jet skis, house prices and interest rates
climbed, labour shortages stymied many enterprises
and inflation started to bite.
Those on big wages in the mining industry
were smiling but so were their kids, when they
turned up at school to find they had no teacher.
Hospitals had to close beds and police shortages
meant fewer criminals were charged. The rest of
us clambered to find someone to fix a light switch,
build us a house or make us a decent cup of coffee.
The bust hit WA s resources-based economy
pretty hard with many WA businesses laying off
staff and reducing hours. Some went to the wall.
But now, while Europe and the US are still
basket cases, China is forging ahead and demanding
WA s raw materials. There are $200 billion worth of
capital projects in the pipeline in WA, including the
$43 billion Gorgon LNG project at Barrow Island.
Happy days are here again. Or are they? How
will we make sure we don t just have all the same
problems as last time? How do we shore ourselves
up against another bust? And if, as some predict,
this boom goes on for 20 years or more, what sorts
of changes will it bring? Will we just have to get
used to life in a big city with expensive goods,
long queues, traffic jams and crappy service?
In some respects this is the "economic upswing"
that dare not speak its name. Many businesses,
shocked by the sudden impact of the GFC are
still bruised and not ready to utter the "b" word.
Premier Colin Barnett is definitely avoiding it,
perhaps concerned at the way it s so swiftly
partnered with that other "b" word, ahem, bust.
Mark Pownall, editor-at-large at WA Business
News says many small-to-medium-sized businesses
are still finding it hard to get credit and are not
rushing to bid for big contracts or employ staff
they might have to abandon in a still-unstable
But The Treasury and the WA Chamber of
Commerce and Industry have both ramped up
their forecasts for the WA economy and now
expect it to grow between three and four percent
this financial year. The CCI expects growth to rise
to 6.25 percent in 2012-13.
And here come the problems.
Access Economics predicts that by the end of
the year the economy will be back in the same
position as in mid-2008, with a fully fledged
resources boom putting huge pressure on interest
rates and creating a two-tiered economy.
While some of us benefit from increased demand
and high wages, those of us whose skills and services
are not in such high demand, do not.
"It s really hard,"says Professor Peter Kenyon
from the Curtin Graduate School of Business.
"The obvious thing is that it s a good thing
generally, and it brings an increased standard of
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text danielle benda « illustration emma thomson
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