One year since meltdown

One year on

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 It's one year since the worst part of the global financial crisis. On 15 September 2008 Wall Street investment bank Lehman Brothers went bankrupt prompting governments around the world to announce massive spending packages in the hope of avoiding a recession at home. China and the European Union were the biggest spenders and and in the UK, the government spent $100 billion and went as far as nationalising a number of banks.

In Australia, the Rudd government set up plans to guarantee all bank deposits up to $1 million and in October it announced $10.4 billion of stimulus spending. Huge interest rate cuts from the Reserve Bank each month for several months got the official rate to the current level of 3 percent.

The Rudd government then followed with a second stimulus package, spending a further $42 billion in February. Among the two packages there was a boost to the first home owners grant and cash handouts to many.

So, while Australia seems to have dodged the bullet and not officially entered a recession, according to analysis of Australian Bureau of Statistics and Federal Treasury data carried out by CommSec, average wealth fell by 12 percent last year – the largest annual fall since records began in 1960.

House prices have remained relatively stable and this has helped the situation not become worse.

Unemployment may have risen over the past 12 months, but there have not been as many job losses as had been previously expected. Australian businesses have been thoughtful and chosen to hold on to employees instead and reduce their hours, forcing many into part time work.

Meanwhile, banking has suffered some major job losses. Around 10,000 jobs have been lost in the financial sector in the past year, according to the Finance Sector Union.

Banks have merged, with CBA teamed up with Aussie Home Loans to buy Wizard Home Loans in late 2008 and St George Bank and Westpac completed their merger.