Over the past five years, the prices of Australia’s commodity exports have fallen by more than 50 per cent and Australia’s terms of trade have fallen by 35 per cent as a result, which is the main reason that growth in national income has been weak over recent years. The third factor is the feeling of reduced pricing power, partly from greater competition.
One good example of this is in the retail sector, where the entry of foreign retailers has made a real difference in groceries and clothing.