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Is Australia the new Switzerland for expat financial stability
| Published: | 18 Apr at 6 PM |
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Switzerland’s most famous product wasn’t the cuckoo clock or the sound of unmusical yodelling, it was its traditional reputation for secrecy and financial stability.
A well-managed currency, sound banking system and its long tradition of secrecy and exquisite service to its wealthy international clients put the country at the top of the financial tree for those wishing to keep their finances private and remunerative. Nowadays, however, the advantages of a Swiss bank account have diminished to the point of no return.
Switzerland’s voluntary surrendering of its privacy laws has caused many formerly prosperous Swiss banks to hemorrhage funds, and its 2011 pegging of the Swiss franc to the now shaky euro hasn’t helped retain investors. Experts suggest the pegging was nothing more than a form of capital control, with the market desperately searching for new financial refuges ever since.
The recent Cyprus scandal has hit hard on many expat savers and investors who saw the island as a safe haven, and its repercussions in the form of fears of repetitions in weaker EU member states has seen a scurry for the few countries still regarded as serving marketplace confidence. Australia is the most popular investor destination at present as it’s obviously not teetering on the edge of bankruptcy.
Expat investors note that the country’s budget deficit, although rising, still stands at less than 30 per cent of GDP, a fraction of the deficits in Italy, France, the UK, the USA and more. In addition, its resource exports denote the AU$ as a commodity currency, and the economy is tied to the growing dominance of Asia in world markets.
Other strengths are Australia’s refusal to embrace printing money with gay abandon and its relatively high interest rates for cash in Aussie banks, running at above 4 per cent. If gold prices continue to slide, the AU$ may decline, giving investors a good entry point out of the US$.
A well-managed currency, sound banking system and its long tradition of secrecy and exquisite service to its wealthy international clients put the country at the top of the financial tree for those wishing to keep their finances private and remunerative. Nowadays, however, the advantages of a Swiss bank account have diminished to the point of no return.
Switzerland’s voluntary surrendering of its privacy laws has caused many formerly prosperous Swiss banks to hemorrhage funds, and its 2011 pegging of the Swiss franc to the now shaky euro hasn’t helped retain investors. Experts suggest the pegging was nothing more than a form of capital control, with the market desperately searching for new financial refuges ever since.
The recent Cyprus scandal has hit hard on many expat savers and investors who saw the island as a safe haven, and its repercussions in the form of fears of repetitions in weaker EU member states has seen a scurry for the few countries still regarded as serving marketplace confidence. Australia is the most popular investor destination at present as it’s obviously not teetering on the edge of bankruptcy.
Expat investors note that the country’s budget deficit, although rising, still stands at less than 30 per cent of GDP, a fraction of the deficits in Italy, France, the UK, the USA and more. In addition, its resource exports denote the AU$ as a commodity currency, and the economy is tied to the growing dominance of Asia in world markets.
Other strengths are Australia’s refusal to embrace printing money with gay abandon and its relatively high interest rates for cash in Aussie banks, running at above 4 per cent. If gold prices continue to slide, the AU$ may decline, giving investors a good entry point out of the US$.
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