re: current account deficit??? does it matter
Probing,
A much greater proportion of the USA BoT (etc) is linked to US corporations based offshore and sending their finished goods back into the USA. That's why its less of an issue in regard to the USA than it is in relation to Australia.
True enough, there are a number of Australian manufacturers who have re-located offshore, but these are minimal from a trade weighting perspective.
In contrast, look at the major USA operations based in Australia (including as manufacturers) - FORD, GMH, IBM, MICROSOFT,etc.
What counts for Australia as a GMH export from Australia to the USA counts for the USA as a finished good import. Given the disparity in operational size, it is no wonder that the USA BoT figures are of their large size given the global reach of their corporations, all of whom are sending both profits and finished goods back home. Australia can only match this in a very minor way, hence its CAD situation is relatively worse, structurally, financially, and cyclically.
For Australia, further structural /economic reform is required, including from a business taxation, and high end, personal taxation perspective. Critically, national infrastructure and R&D spending continues to glide along at near historic lows, and State required infrastructure /business reform continues to be choked off by the sea of State Labor 'red'. There was a time when reform was trumpeted and pursued by all concerned. Now, however, it is more a case of ill-form, or dis-form, meaning conform, or stagnate.
Until this all occurs, however, and genuine reform is properly embraced, Australia will continue to represent itself as a bypass on the economic highway of tomorrow, with only occasionally, the carnival ever coming to town (ie: the resources boom).
Why else are global investment giants, for instance, bypassing Australia to set up their research houses /functions elsewhere in Asia? Answer, Australia either lacks in true international competitiveness, or quite simply offers too many obstacles for success to subsequently prosper.
After all, whatever happened to Intel's proposed fabrication plant that, 3 years ago, was to herald in Australia (and Melbourne) as the world's next emerging Silicon Valley?
