Australia's economy on the skids?

I learnt yesterday that my old work (where I was made redundant) has been sold. I was rung by another former employee, the bloke I used to work with who told me, after he'd been talking to someone still there. Looks like we got our redundancy just in time. I can't imagine the new owners wanting to pay us all out like that. Ten or so people, would've cost the place over half a million easily. They suddenly decided to pay us before the end of the financial year too, instead of working through the notice until the end of July. I smell a rat.....  I'd say they were getting ready to sell the place back then. They'd have wanted the wage costs to be far less to make the company look more efficient, have it all sorted by the end of the financial year so the new financial years figures would look fabulous. Then sell the place before the full impact of getting rid of core staff took hold. Lovely isn't it. An Australian owned company treating it's workers like pawns in a big game of Chess.

This is the sort of Capitalist crap that's rife now in Australia. In the news are constant stories about companies hugely cutting back on staffing levels to maximise profits and company value, all for the benefit of shareholders who don't actually give a fuck about the company or the workers jobs, just their money. Companies are in my opinion being stripped back to the bone, so far so as to be incapable of performing to their former standards. But does the shareholder care about this? Of course not. All they want is their money, and after the company has had the guts ripped out of it for short term gain, they'll leave the carcase and move onto some other investment. 

This "re-structuring" has I'd say reached fever pitch in the last few months. Big companies too, like Telstra and Qantas, announcing staff cutbacks of thousands. Thing is, with redundancy payouts in Australia, you can't get unemployment benefits off Centrelink until a date of it's choosing (according to the size of your payout). The former employee who rang yesterday can't get anything until Jan for example. He's still unemployed, but not registered as so at Centrelink. Hence I'd guess there's developing here a large number of people who are actually unemployed, but not in the official unemployment figures. The 5% or so official figure I'd be surprised if they didn't show an increase over the next few months as peoples redundancy payouts run out and they're forced to register for unemployment benefits from the gov. Yes, many of them will find new jobs, but the amount of people being given the boot I can't see all of them doing so.

So all of this is going on, and now today I read Australia's mining boom is over. This boom has largely camouflaged the true nature of the economy here in recent times, with China and India going gang-busters we couldn't keep up with demand. Now those economies are slowing (for whatever reason) and we're starting to look a bit vulnerable here now. 

The free falling iron ore price has left the investment community with one major question - how low can it go? The glass half-full team at Fortescue take the view that the drop is a short term aberration and that in a couple of months it will recover to some extent - certainly above the crucial $US100 a tonne level and more likely to $US120.

Until a few weeks ago the market believed there was a floor under the iron ore price because the high-cost Chinese producers would exit the market and take with them the excess production.

But that theory is now looking shaky. Only a week ago Fortescue chief executive Nev Power gave a speech in which he said the iron ore market was really hard to pick and that the large downward price movements were due to thin trading in the spot market. He said these were quite deceptive and didn't reflect underlying demand.

Forrest blames Chinese producers dumping excess inventory into the market which, once cleared, will pave the way for the price to move up again.

But the slowing economic growth out of China doesn't augur well for any price recovery, and neither does the fact that Chinese steel makers are hurting.
Link

It's been 5 years or so since the start of the GFC. I'd estimate we've got a few more years to go yet. 

*Just an afterthought. My take on it is that one of the reasons why the economy may well be on the skids now, is because of the system itself. A system that allows companies to behave in the above manner isn't going to do anything to build a sustainable economic future for the country. Instead all it will do is line the pockets of rich shareholders at the expense of local jobs.