Wake up Australia!

We recently saw the US stock market index roar through 20,000 points. “The Donald” factor is being touted as the driver but it is so much more than that.

The US market has been heading in a direction of growth for ten years, since the onset of the Global Financial Crisis (GFC). Prior to the GFC, the US share market peaked at 14,093 points in October 2007 before falling to a low of 6,627 points in March 2009. Eight years later things have changed. Since the GFC, growth has been phenomenal – rocketing off the back of US corporate growth and recovery of the US domestic market.

Currently, the Australian All Ordinaries (XAO) share market index sits at 5,713 points. Prior to the GFC the All Ords peaked at 6,779 points on 31 October 2007, and fell to a low of 3,296 in March 2009.

Australia’s comparison with the US is startling to say the least.

The US market fell 47% from its pre GFC high but since recovered 201%. That’s 70% higher than its previous high. The Australian market fell 51% from its pre GFC high but has only recovered by 57%. The Australian market has failed to regain even its previous high over a 10 year period.

Obviously, this has been an extremely frustrating period for Australian investors, particularly when matched by historically low interest rate markets. The market reflects investor sentiment and that is the stark difference between Australia and the US.

I can’t help but feel that we, as a nation, have lost the fire in our belly to roll up our sleeves in times of diversity and get back on top. Certainly, the US has dragged itself back from a far worse economic position than us, and as a result has flourished. This was led by government initiative and spending, corporate America developing markets globally and the US worker taking a pay cut to make themselves competitive again.

Australia’s economic indicators are extremely attractive in terms of low inflation, low interest rates (for borrowers) and a low ABS unemployment rate.

So why aren’t we all feeling and thinking positively and driving the economy forward?

My opinion is that we are shackled by a lack of creative and affirmative leadership at all levels, with an attitude of complacency and greed. Our leaders appear more interested in providing negative commentary and bickering amongst themselves rather than taking any definitive action that will benefit the country. Corporate Australia has become lazy, showing little initiative and being more concerned about profit margins than investing for future growth.

Successive governments have been completely lacking in leadership as well as in creating industrial development initiatives and infrastructure projects. And unions continue to make impossible demands, increasing the cost of living and slowing the wheels of progress. Meanwhile, the Australian public is left to scratch our collective heads and wonder why this is all happening.

No matter what you think of “The Donald,” his affirmative leadership and decision making will drive the American economy and public attitudes forward. I didn’t think I would ever say anything particularly complimentary about Mr Trump but I almost wish we had an Aussie version in the office of PM to shake things up to give us some firm direction.

Wake up Australia. We don’t want Trump but do we need a revival of leadership to take affirmative action and make this country great again.

We thank John Hewison for this article.