Economic Conditions of the Australian Economy Over the past five years the Australian economy has gone through many changes experiencing both peaks and troughs associated with the business cycle. Five years ago, in the middle of 1997 Australia's economic growth had begun to recover after a period of recession during the year '96. This has been demonstrated unequivocally across the composite indicators of Australian retail trade, property investment and stock market valuations, all agreeing with each other and demonstrating the effects of a pickup in economic growth. This economic growth continued to increase throughout '98 and '99, partly being attributed to the weakening of the Australian dollar which allowed the opening up and increase in market shares held by Australian exports in world markets. This has been the case, as the reduction in the value of the Australian dollar has triggered a decrease in the prices of our exports for overseas buyers, thus increasing demand for our products and increasing the amount of money and investment coming into Australia. This then results in the aforementioned increases in economic growth when combined with high levels of employment and consumer confidence. This economic growth did not continue for long, however, with the economy peaking just before the start of 2000 followed by a sharp downturn that resulted in a temporary recession that occurred around the middle of the year. This erratic behavior, most pronounced in retail, can be explained both by the effects of the millennium bug and the introduction of a general consumption tax in the form of GST. The millennium bug caused a lot of panic and with it led to panic spending, especially in the IT sector, thus inflating an already close to booming economy and after the near miss where the millennium bug (or Y2K) caused a crash in spending and then a further collapse as consumer spending on big-ticket items such as cars and houses curbed until the introduction of GST. Despite the aforementioned pre-GST economic crisis, in the second half of 2000, with the implementation of the GST and the advent of the Olympics, the economy experienced a new boom before experiencing another strong recession followed by an equally strong recovery . The initial recovery was due to increased spending post-GST followed by large injections of foreign liquidity into the Australian economy following the Sydney Olympic Games. Olympic spending, however, was only temporary and consequently caused a post-Olympic downturn, which was quickly countered by the introduction of the first homeowners subsidy.