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3 July 2014. Back in 2007, a few issues arose which soon grew into what we call the global financial crisis. So what happened? One thing that is often mentioned is the fall of the Lehman Brothers. The 4th largest investment bank filed for bankruptcy in September 2008. This pushed an already fragile financial system over the edge and led to drops in the market. This then snowballed over the years affecting virtually every country’s economy...apart from one. That country is Australia.

But how did we manage to do this?

Firstly, precautions were taken. Australia’s then Prime Minister Kevin Rudd set out with Treasurer Wayne Swan to make a budget that would hopefully swerve them away from inflation and boost the economy. This was done in two stages or packages;

Package 1:

  • They guaranteed bank deposits (to secure people's funds)

  • $10.4 billion was set aside for seniors/carers and families (this was paid in December 2008, as Christmas was around the corner and people were eager to spend)

  • Temporary increases in first home buyer grants (urging people to buy brand new homes)

Package 2 (according to Canstar.com):

  • $14.7 billion was allocated to schools

  • $6.6 billion for 20,000 new homes

  • $3.9 billion to insulate 2.7 million homes

  • $890 million for road repairs and infrastructure

  • $2.7 billion in small business tax breaks

  • $12.7 billion for cash bonuses: $950 for every Australian taxpayer who earned less than $80,000, to be paid out in March and April 2009

That's a lot of money to spend! But by allocating it in the right places this would boost the Australian Economy and ease it through the GFC.

According to the Guardian; 'Australia hit the 2008 crisis in rude financial health: debt-free, growing strongly with significant assets and running surplus budgets. It is these robust foundations, along with very favourable terms of trade, which guaranteed that Australia would survive the crisis in very good shape.'

Australia is still doing well to this day. According to ABC news “The economy is growing comfortably above its trend or normal pace, inflation is under control, interest rates are at historic lows, productivity is solid and home construction and exports are leading the way forward."

That was a message echoed by Treasurer Joe Hockey.

Additionally a recent BBC News Business article revealed 'Growth was 1.1% in the January-to-March period, from the previous quarter. Most analysts had forecast growth of 0.9%. The annual growth rate was 3.5% - the highest in nearly two years.'

Although there has been some concern recently that Australia seems to be over reliant on exports and mining, it seems since 2007 Australia has had all the necessary precautions to swerve it away from suffering a major financial crisis. This is something that is evidentially being maintained even now.

So in Australia, the mercury levels may stay high throughout the year, and we may have barbecues at Christmas...but when it comes to our finances, we’ve proven to be as cool as cucumbers. That being said, we certainly don’t want to be too boastful about our financial crisis survival, most Australians also subscribe to the Tall Poppy Syndrome so we shall remain modest and quietly proud of our Nations economic health.

Author Bio

Rachel Maher is an experienced financial content writer from Western Australia, she shares money saving tips and writes about finance for Fairgo Finance

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