Excluding mining, the Australian economy will grow at a tepid annual pace of 1% in the next two years
Any kiwi looking across the Tasman would wonder why the long faces. Consumer confidence fell to a two-year low in August. Woolworths, the biggest retailer over there, says there is no sign consumer sentiment will improve any time soon and expects to be doing it tough through 2012.
Aussies have taken to describing their state of affairs as a two-speed economy. Mining and resources are still on a tear, but the domestic economy - households, home builders, retailers are all a tad gloomy.
The problem is that the mining boom has overshadowed the domestic economy, three quarters of which doesn't see a direct benefit. Excluding mining, the Australian economy will grow at a tepid annual pace of 1% in the next two years, according to Treasury secretary Martin Parkinson.
It's a sad fact for commodity producing nations that a boom in prices is nearly always accompanied by a stronger currency, which negates some of the benefits. The Australian dollar rose above US$1 for the first time in November last year and has been consistently above the greenback since March.
New Zealand's dollar climbed above 80 U.S. cents in April and reached 88.40 cents at the start of August, while traditional commodity export prices broke records through the early months of this year. The kiwi dollar also rose above 81 Australian cents for the first time in a year this month.
No country buys more of New Zealand's products than our nearest neighbour, which took 22% of exports in the 12 months through July at $10.4 billion. That's almost twice what China bought and more than double sales to the U.S.
Australia and China together bought more than one third of New Zealand's goods sold overseas in the latest year. So, does Australia's fretting about an economic slowdown constitute a big risk for New Zealand?
Actually, the economic turbulence is relative. Australia's unemployment rate reached an eight-month high but at 5.1% it is relatively mild to New Zealand's 6.5%.
The same goes for China. UBS trimmed its growth forecasts for China over the next two years. But the GDP figure was revised down to 9% - still a stonking pace - in 2011, and to 8.3% in 2012.
So China isn't expected to fall in a hole, ensuring ongoing demand for Australia's coal and iron ore and giving Australians the confidence to keep buying kiwi goods. They just may not buy quite as much.
Australia is showing "clear signs of having slowed in the second half," Fletcher Building CEO Jonathan Ling said last week, when he reported a 19% gain in full-year earnings. The gains were thanks to the acquisition of Australian building supplies company Crane Group.
Michael Hill International, the jewellery chain, cited a recovery in sales in Australia, its biggest market, when reporting a 33% jump in annual profit.
Kathmandu Holdings, the outdoor equipment chain with almost twice as many outlets in Australia as New Zealand, said full-year earnings rose as much as 36%.
So optimism on the streets of Sydney may not be so noticeable but the nation is hardly in despair yet, even if anxiety has grown about the value of property and rancorous politics is souring government-business relationships.
And Australia has levers it could pull. At 4.75% the central bank's benchmark interest rate has enough fat to be cut if that's what it took to keep Australia's economy on track. Government debt is relatively low, the jobless rate is relatively benign and there is no shortage of people wanting to move to Australia if it wished to open its gates a tad wider.