Over the past decade Australia has lived through the Great Complacency where governments have spent, rather than save and reform, thinking that we can ride the...
Over the past decade Australia has lived through the Great Complacency where governments have spent, rather than save and reform, thinking that we can ride the China wave indefinitely. However, the height and speed of this wave is diminishing, and diminishing at a faster rate than the market and RBA thinks. Australia's lack of diversification in our export markets is set to seriously test our growth dynamics in the next 18 months, like we have rarely been tested over the past two decades. Fortunately, we have more policy ammunition that any other country that we can use, but a softening China is likely to challenge Australia's earnings per share expectations of +8% in FY15 and investors need to be mindful of the downside risks to the outlook as the malaise in the Chinese property market shows no sign of ending soon: (VIEW LINK)