I live and work in Australia, and the lending practices I’ve seen here are ridiculous. I can’t comment on business loans, but I can tell you that for personal / car loans, the rates are very high (12%-20%), and everyone here implements “early payoff fees” of $300-$750.
That just discourages fiscal responsibility.
Factor in the high taxes and high cost of living, and you can see how your average Joe can get up to their neck in debt very easily.
Currently, the employment situation is good here...but most of Australia’s economy is fueled by tourism and energy/commodity export. If we have another global crash, Oz will be hurting BAD...
(That’s the general sentiment from the Aussies I’ve spoken with. They’re well aware of the tightrope they’re walking...but as the saying goes, “make hay while the sun shines.”)
Actually, I think high interest rates are a GOOD sign. It means you are taking your stiff medicine now rather than later. Doesn’t mean it isn’t painful. But the Aussie debt to GDP ratio is one of the best in the 1st world. Only better is Chile.