The two-speed Australian economy: the decline of Sydney's labour market

Australia is experiencing a two-speed economy in which New South Wales and Sydney are doing poorly in comparison to the mining regions of Western Australia, Queensland and the Northern Territory. Several factors contributing to the two-speed phenomenon: the terms of trade for base metal commodities; the decline in manufacturing; the property boom and associated household debt; record fuel prices, rising inflation and rising interest rates; and fiscal drag. These factors may lead to an economic slowdown in areas such as Sydney that will bankrupt many households.