It's worth looking at the history - the last time Australia suffered from a collapse in demand for resources on the back of a debt bubble was in the 1880's....property prices didn't recover until the 1950's
The scale of personal debt that we have in place now is entirely without precedent and the ability to service it has only been made possible by very low levels of unemployment....and the layoffs have just started to appear in sizeable numbers - prime debts can become sub-prime very quickly.
Even the much vaunted pillars of the Australian banking system are dependent on the international credit market for much of their funding, and they need to refinance nearly A$250bn of international debt in the next 12 months....the international interbank lending market is looking pretty ugly at the moment, and they will be competing with newly re-nationalised banks with sovereign credit ratings.
The A$/USD rate is being hit with a double whammy - on one hand the rate of debt contraction in the US economy is driving the USD up (less debt = less money in circulation....supply vs demand dictates that the USD will rise....when the Japanese property market collapsed in the 90's the value of the yen doubled) and on the other hand the demand for the AUD that was being driven by the resource boom and high interest rates is going away....not a pretty picture, I would not be surprised to see the AUD below USD0.40 over the next couple of years.