Patchwork economics

THE patchwork nature of the Australian economy in 2012 has never been more apparent.

While the federal government has trumpeted unexpected good news of strong national growth, that news must be tempered by recognition that most of the growth was in the resource states of Queensland and Western Australia. The most populous states, NSW and Victoria, are still seriously lagging, making political celebration seem inappropriate.

Jobs growth too, is a mixed story.

Robust employment growth might appear to offer the government some grounds for self-congratulation and complacency. But the picture is not as clear as it might seem on the surface.

The official unemployment rate has risen marginally from 5 per cent to 5.1 per cent – despite growth in the number of jobs – because more people are looking for work.

And again, while jobs may be plentiful in the mines, pockets of serious disadvantage persist. In South Australia, for example, youth unemployment has jumped from 29 per cent in April to 32.6 per cent in May.

The positive economic news has prompted a rise in the dollar’s value, highlighting the difficulties facing the government in trying to manage opposing forces.

It is now considered politically impossible to even attempt to dampen the boom in mining investment. That means the government has very little ability to assist industries like tourism and manufacturing that are being hurt by the strong currency.

Australia’s economic news is a great deal better than that in most other advanced countries, but there are some very real problems the government must continue to deal with.

IN 1942 many Australians believed that a Japanese invasion was a real possibility.

With the nation’s major allies largely preoccupied with their fight against Nazi Germany, Australia feared isolation and geared itself for total war.

Newcastle was a cornerstone of national defence, with its heavy industries turned over to munitions manufacture. That made it a key target, and the threat of bombing or shelling was taken very seriously.

Seventy years ago today the city got a taste of war when the Japanese submarine I-21 – part of a force involved in disrupting Australian shipping – fired salvoes of shells from its deck gun in the general direction of the steelworks and the Hunter River.

While the attack did not result in any serious casualties, it underscored the message from the government that this war was a serious business and it provided an opportunity for the gunners at Fort Scratchley to demonstrate their ample preparedness.

The men of the fort drove the sub away, but I-21 wasn’t finished with Newcastle. In February 1943 it sank the ore ship Iron Knight off Montague Island, killing 36 men, many of whom were from the Hunter.

Those dark days of the war are now long past, but memories persist of the night Newcastle came under enemy fire.

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