SYDNEY LETTER:Those taking flight from Ireland's recession will discover that Australia has problems of its own, writes Padraig Collins
DURING EVERY phone call I made home to Ireland on Christmas night, I heard about how many people had lost their jobs. People are starting to emigrate again, I was told, but not to the traditional destinations of Britain or the US as there are no jobs there either.
What I repeatedly heard is that young people are leaving for Australia in their droves, including, on one recent weekend, 20 people from a small west Limerick village. Other Irish friends in Sydney told me they heard the same on their Christmas calls home.
But is the reality in Australia living up to the promised land belief that's fuelling emigration?
So far the downturn has only hit the top end of town to any great extent, with an estimated 19,000 fewer finance sector jobs at the end of 2008 than there were at the beginning.
Financial services group Macquarie Bank, which for years was dubbed "the millionaires' factory", cut 1,000 jobs just before Christmas, leading to a cruel joke doing the rounds: "What's the definition of optimism in the finance sector? Ironing five shirts on a Sunday night."
Australia's overall unemployment rate is still very low at 4.4 per cent, but the thoughts of many people now on their Christmas/summer holidays are preoccupied not with the usual sun and sand, but with the global economy and job security.
Sales started in many shops before Christmas as stores fought to get some of the government's Aus$10.4 billion (€5.2 billion) economic stimulus package, which saw families get $1,000 for each child and payments of up to $1,400 for low income earners.
Lots of flat-screen televisions were bought in these sales. Electronics retailer Harvey Norman (which also operates in Ireland) reported its sales were up nearly 9 per cent on the same time last year. "[Australian prime minister] Kevin Rudd wanted people to go out and spend their money, so it looks like they're doing exactly what they're supposed to be doing," company chairman Gerry Harvey said.
Trying to squeeze out the last few stimulus-package dollars led to post-Christmas sales starting at 5am on St Stephen's Day. They were the biggest ever for some shops, but many are worried about what happens next.
What happens when the businesses that hired more staff for Christmas lay them, and more, off again; when the downturn moves down the food chain from stock brokerages to shelf stackers and factory workers; when unemployment rises from 4.4 per cent to 6 or 7, or even higher? Despite its increased December sales, Harvey has announced that some Harvey Norman stores will close in the next six months.
Many have been looking to China and India's vast imports of Australian natural resources to help keep the economy out of recession, but this is increasingly looking like wishful thinking.
Most of what the Asian powerhouses make with Australian resources is for export to Europe and America. With those economies already in recession imports are dropping dramatically. The knock-on effect has seen the price of iron ore and other resources fall as fast as that of oil, and mining companies laying off workers.
There is, however, more scope to boost the economy with further interest rate cuts in Australia than in almost any other developed economy. Though Australian rates have been cut by 2 per cent since September, at 4.25 per cent there is still room to manoeuvre. The 1 per cent cut on December 2nd is unlikely to be the last we'll see.
Tourism is another important aspect of the economy which has taken a battering, with the 2008 visitor numbers the lowest in 20 years and a drop of $1.8 billion in revenue. Not even the dramatic collapse of the Aussie dollar (from €0.62 mid-year to €0.50 today) has boosted tourism. It remains to be seen if the Australian Tourist Commission's co-opting of images from Baz Luhrmann's film Australia in its advertising abroad will help (not if the film's reviews are anything to go by). Camping and caravan holidays are up even as hotels and airlines cut their prices.
As well as a slowing economy, Irish people emigrating to Australia will also have to compete for jobs with returning Aussie expatriates. Recruitment agencies say they have seen an increase in the numbers of expats coming home after two or three years abroad, looking for more job security and shelter from the global economic crisis.
If you are one of the people considering going to Australia, please don't let me put you off, though.
I first came to Australia in January 1992 when unemployment here was 11 per cent. It took me a bit longer than I'd hoped to find work, but eventually (I was down to my last $300) I did and had one of the best years of my life.
It's a mark of the strength of the Australian economy that it is near impossible to imagine things getting so bad that we will see anything like 11 per cent unemployment again.