From blue sky mine to luck run dry?

The Australian economy has had a great run, avoiding recession for almost three decades. Most macro indicators are in reasonable shape. But there are three risks looming. First, high levels of household debt and heavy exposure to residential housing put domestic demand under the spotlight. Second, should the upcoming election deliver a Labor victory, there is the danger of leftward shift in economic policy. Third, in the longer run, the likelihood of slower growth in China may lead to softer demand for Australian commodities.

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