Getting tough for mainstream media liars to ignore economic facts

More data has emerged confirming the Liberal-led Coalition's cost-of-living crisis is now behind us, but mainstream journalists don't share it. Alan Austin reports.

SPARE A THOUGHT for the sorry losers paid to report Australia’s economy.

Instructions from on high – whether from Rupert Murdoch, Gina Rinehart, Institute of Public Affairs (IPA) or Liberal Party HQ – seemingly require them to insist Australia is still in a cost-of-living crisis and living standards are falling.

Yet every week reports oncoming – from Treasury, the Reserve Bank (RBA), the Bureau of Statistics (ABS) and elsewhere – show the opposite.

Inflation is now 2.36%, while wages are rising at 3.22%. Wages have outpaced prices for 15 months now, with no sign of reversal. (See chart below.)

Quiz question on the better economic manager

Consumer price index (CPI) increases have been between 2% and 3% for three consecutive quarters, or, as per the above graph, the last seven months.

How often during its nine years in office did the Coalition string together two or more consecutive quarters of CPI growth within this optimum band?

(a) seven times
(b) four times
(c) only once
(d) never

We shall come back to this.

Inflation crisis ended long ago

There actually was a cost-of-living crunch in Australia. It began in late 2021 when the workers’ share of gross national income (GNI) fell below 51%, inflation increased alarmingly and real wages tumbled. Net disposable incomes, which had reached artificial peaks due to wasteful COVID stimulus, steadily declined.

That crisis ended in late 2023, as reported, in Independent Australia here and here, and elsewhere, when wage rises exceeded inflation, spending on luxuries soared, and multiple indicators of prosperity reached all-time highs.

Of course, some citizens remain in poverty as a result of the Coalition’s gross mismanagement. The whole population is now stuck with higher prices. But the crisis of an ever-widening gap between incomes and payments is over.

The paradox of declining net incomes

The above-mentioned real net household disposable incomes per capita are an intriguing dataset. While a useful indicator of affluence, it is also exemplifies the Disraeli-attributed phrase "lies, damned lies and statistics".

Last month’s national accounts showed this was $18,418 for the December quarter, which was 3.3% below the 2022 March quarter just before Labor took office.

Does this prove Australians are now 3.3% worse off, after nearly three years of Labor? Not so fast.

Imagine a company run by two managers and ten laborers. If the managers were paid, after tax, a million dollars a year and the workers $100,000 each, then their total net disposable income would be three million dollars.

Most of the workers’ million dollars would be spent in the local economy on housing, food, utilities, other living costs and the occasional holiday splurge. Some of the two million spent by the two bosses would contribute to the retail economy and the rest, likely invested, or spent on expensive luxuries or sent offshore.

Imagine now a restructure whereby the managers receive $700,000 each and the workers $150,000. The total net income would have fallen — down from 3.0 to 2.9 million dollars.

How would that affect the overall living standards of this community of twelve? Clearly, with ten out of the 12 suddenly having 50% more to spend, most are vastly better off. The bosses will still struggle by on their $700,000.

This mirrors Australia since June 2022. The total income pie has declined very slightly from earlier aberrant highs, but most citizens now get larger slices. Their living standards have, in fact, increased substantially. (See chart below, based on quarterly ABS national accounts data.)

For the record, here are our top 30 datasets, with links to sources, proving most Australians are enjoying a remarkable upsurge in living standards (* asterisk indicates all-time high):

Monthly inflation — down to 2.36% (See top chart)
Interest rates — below 4.9% since 2008 and now cut to 4.1%
Workers gainfully employed — up to 14,513,200
Job participation rate — up from 64.4% in 2021 to 66.8%
Workers jobless for more than one year — down to 122,600
Employment to population ratio — above 64.0%*
Underemployment ratio — down to 6.1%
Average weekly earnings — up to $1,510.90*
Minimum wage — up to $915.90*
Wage rises — above inflation for the last 15 months (See top chart)
Employees’ share of GNI — up to 53.8% (See chart, above)
Social benefits paid — down to 7.16% of GNI, close to the lowest this century
Household wealth — up 16.3% in two years to $16.95 trillion
Median wealth of adults — second highest in the world at A$434,505
Unemployment benefit — up to $781.10* fortnightly
Youth allowance living away — up to $663.30*
Age pension — up to $1,051.30*
Number of families in social housing — up to 426,470*
Public housing renters paying below 25% of income — now 98.4%*
Retail spending relative to GDP — up to 17.7%*
Consumption expenditure on discretionary items — above 65%*
Imported perfumes and cosmetics in 2024 — $3.72 billion*
Imported jewellery in 2024 — $2.53 billion*
Record overseas trips in 2024 — 11.6 million*
Percentage of all retail sales on dining out — up to 15.8%*
New car sales in 2024 up to 1,221,200*
Record 13,597* single or twin-engine light aircraft registered
Proportion of students attending fee-paying private schools, up to 36.6%*
House auction clearances and prices
Superannuation reserves up 19.8% in two years to $4.14 trillion.

The answer to our quiz question, of course, is (d) never. That’s despite the Coalition having enjoyed the extraordinary six-year boom between the global financial crisis and the COVID downturn.

So, when mainstream newsrooms claim the Liberal-led Coalition manages the economy better than Labor, which they will repeatedly do until the Federal Election, they are not reporting truthfully.