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Reliving The Countdown Years

Molly Meldrum is about to front a show reliving the 'Countdown' years - the top rating pop TV show he hosted from 1975. Australia sits at the brink of reliving the roller coaster of commodity prices, stockmarkets and wage inflation that was go-going just as the Go-Go girls were dancing in their cages. Here's a brief recap:

* In the late 1960's a mining and minerals boom was in full swing (just like now). The stockmarket rose 75% over the two years to March 1969 (three years to April 2006 the stockmarket is up 63%).

* In March 1975 average weekly earnings rose 27% over 1 year because of oil price rises and galloping consumption of the baby boomers. At present there are large shortages of skilled workers so existing workers have considerable bargaining power, but not the organised industrial muscle of the 1970's era. An emerging and politically charged safety valve is 'guest workers'- 13,000 in 2004/05 but already 40,000 in the first 6 months of 2005/06.

What will we see for wage inflation when we look back in 5 years time? How will the retirement nest eggs look in 5 years time if the stock market falls 35% like it did in the three years to March 1975 and price inflation is 41% like it was over the same three years - that was a devaluation in real savings of 64% if you had it all sitting in the share market. But this may be all scaremongering because according the Average Weekly Earnings figures out today for March quarter, wage inflation is pretty steady at 4.3%pa

Posted Thursday, 18 May 2006


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