On 6 October the IMF issued a Staff Report for the 2011 Article IV Consultation on Australia (Country Report No. 11/300: Australia) – attached.
It is an informative and timely examination of:
- Why Australia’s household saving has increased so sharply. Australia’s savings and housing and personal credit trends are compared with the US, Canada, UK and NZ savings ratios and housing prices.
What is not surprising is the link between savings and consumption and GST.
The IMF analysis shows, not surprisingly, that, as savings increase, consumption decreases and takes GST revenues with it.
Other topics of the IMF staff report are:
- Policy challenges for Australia from rebalancing in China and downside risks in the global economy
- The impact of the mining boom on the Australian labour market.
In this latter part of the Report we find that participation rates are low in Australia, by international standards, for three groups
- prime-aged males (25–54 years old),
- females of child-bearing age (25–44 years old), and
- people near retirement (55–64 years old).
Oh well, as Yoda would say
“past my prime, it is, I am”