Campbell Neal, MD of K2: How can Australia justify the third highest living costs globally
Campbell Neal, MD of K2: How can Australia justify the third highest living costs globally? Unemployment at 6% puts us at the highest rate in ten years, and where will we employ those losing their jobs today? The AUD is still too high for us to be competitive, as we've seen with the closure of major car manufacturers. I don't see much confidence on the streets yet, and the sentiment of business owners is certainly not great. With this macro backdrop, it is perhaps hard to understand the All Ords at 15 times, and the All Industrials at 17 times - well above long term averages. This is even allowing for modern PE's justifying being higher due to increased red tape. The RBA has no choice but to keep rates low, and see the dollar correct, in order to support the non-mining sectors.