by Alan Thornhill
A fuel sipping city car might well boost your weekly budget, by helping you spend less each week on the petrol your present gas guzzler is consuming, right now.
Those weekly savings would be enhanced, too, if you could buy that little marvel more cheaply than you expected.
Interested? If so, the Statistician has some good news for you.
Where? In the producer price index figures that the bureau has just released, of course.
These show that the price of imported goods, like those cars, fell by 4.4 per cent in the September quarter, to a level 2.4 per cent below those we saw just 12 months earlier.
Small city cars are not made in Australia, not yet, anyway.
Australians would have once scorned them, because they were not suitable for the long journeys they like to take, with their families, in their annual holidays.
So why did the price of fully finished imports, like city cars, fall some dramatically, over recent months, especially when the price of everything else seemed to be rising?
Especially as the price of fully finished, domestically produced goods, like Australian made cars, rose by 0.7 per cent in the September quarter, to a level 3.5 per cent above those seen 12 months earlier.
We can thank Bill, largely, for that. Our Aussie dollar Bill.
It’s been quite strong, over the past year, because our exports of iron ore, coal and agricultural produce have been booming.
That, in turn, has helped to restrain Australia’s inflation rate, over that time, because it made the goods we import cheaper, when we pay for them in Aussie dollars.
The price of both the raw materials we import – as well as the semi finished goods we order overseas, also tumbled, also, in the three months to the end of September. That, too, was largely as a result of the stronger $A.
Lower inflation, of course, also helps to keep interest rates in check – and that – too – is a major item in Australian family budgets.
We can thank Bill for that, too.
The Aussie dollar has been riding high in world currency markets, over recent months. It has even topped the value of its old rival, the US greenback, at times.
Economics, too, moves in mysterious ways, at times.
Never more so, either, than in the months and years following a catastrophe, like the global financial crisis.
Australia’s strong, but still patchy, recovery, over the past year or so, is based squarely on our sales of raw commodities to rapidly expanding nations, like China and India.
OK. This was a sneaky economics lesson.
But the example above shows just one of many ways in which national prosperity can spread, quickly and quietly, throughout the community, touching even those who believe they have no connection, at all, with our great resource industries.
Equally, if those industries should fail in future, without being replaced by others, just as powerful, we will all pay a price for that.
Just as the Irish – and Greeks – are doing right now.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
Friday December 13
The Dow Jones index falls 105 points to 15,739.
The $A drops to US 89.39US cents shortly after 8am, Sydney time
The Senate rises for the year, without passing government bills to abolish the carbon tax
Car industry workers’ plight to be high on the agenda, when the Prime Minister meets State premiers today
Australia’s unemployment rate rises slightly to 5.8 per cent in November 2013 (seasonally adjusted):ABS
|Aud To Usd||0.8919||N/A||N/A|
|Bhp Blt Fpo||35.850||+0.310||+0.87%|
|Rio Tinto Fpo||65.090||-0.050||-0.08%|
|Macq Group Fpo||52.200||+0.880||+1.71%|
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