Yesterday the ABS made major revisions to the trade data.
The trade deficit in 2012/13 is now estimated at $17.5 billion, not $10.5 billion, and it seems that the major culprit is Aussie purchases of goods from abroad.
In the year to July, the latest figures suggest that Aussies bought goods from abroad to the tune of $7.6 billion or around $330 per person. That is $7.6 billion that Aussie retailers missed out on over the past year. It is also around $760 million that the Australian Government didn’t get in GST revenue since the purchases fell below the $1,000 low value threshold.
In annual terms, overseas purchases of goods are rising at a 20 per cent annual pace, well above the 3 per cent pace of domestic retail spending.
Clothing, shoes, toys, sporting and leisure equipment and electrical goods dominate the purchases of goods from abroad via the internet.
To me this is damn fine news. It shows that there is more low hanging fruit with regard to boosting economic activity when the dollar falls materially. The problem is we don’t have an elite with the nous to engineer it, meaning it will likely only happen on economic weakness, when we’re less prepared to spend.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
