The latest official statistics confirm Australia’s economy is being grossly mismanaged. Alan Austin unpacks the recent data dump.
WE NOW HAVE nearly all the information on the economy’s performance in 2019 we are going to get. So we can complete the picture we began to assemble here in January when we examined 14 important outcomes – almost all of which deteriorated over the year.
Living or just surviving?
One neat measure economists and others use to assess progress for average families is household consumption expenditure. This is the money families or individuals get to spend on necessities and luxuries after paying all direct taxes. Obviously, the higher the better.
Families in 2019 suffered the lowest increase in household spending in 28 years, at a miserable 1.43%. With inflation at 1.8% and population growth at 1.6%, this means most Australians spent less last year than the year before.
Government construction activity fell disastrously in 2019. Public sector engineering construction as measured by the Bureau of Statistics totalled $34 billion for the year.
That is down 11.2% on the 2018 spend, well below investment in 2017 and even down 5.1% from the $35.8 billion the Labor Government allocated back in 2011.
That is the second-lowest percentage collapse in government infrastructure spending since records began in the mid-1980s. The lowest was in 2014 when Tony Abbott was trying to be Prime Minister.
The chart, below, shows investment on infrastructure per adult per year by each administration since accounts have been kept. The Abbott years were the worst, Morrison second worst. So far.
Total construction tumbling
All construction activity, government and private, including houses and commercial properties plus large infrastructure projects, came to $204.9 billion for the year 2019. That was down 7% on the year before and down a staggering 15.2% from the $241.8 billion invested in Labor’s final year: 2012.
Dismal economic growth
Growth in gross domestic product (GDP) for the last three months of 2019 was reported last Wednesday at 0.53% for the quarter and 2.19% for the year. This was a slight rise from 1.82% in the September quarter. It was marginally better than the December result a year earlier of 2.17%. It remains, however, well below the average of 2.89% over the last 20 years — a period which includes the global financial crisis (GFC).
Australia’s current global ranking on annual GDP growth is a lowly 108th, with an outcome well below the world average of 2.95%.
Interest rates slashed
Through 2019, interest rates were cut three times in efforts to boost the Coalition’s tanking economy. To no avail. The Reserve Bank cut them again last week to an all-time desperation low of 0.50%.
Governments, corporations and others follow keenly Transparency International’s annual corruption report. So they should. Corruption is highly destructive of economic and social progress.
Transparency’s 2019 edition highlights on its home page “improvers”, “decliners” and “countries to watch”. It lists three decliners — Canada, Nicaragua and Australia.
Australia score is just 77 and the ranking a lowly equal 12th. That’s down from eighth position through most of the Labor years and seventh in Julia Gillard’s last.
Transparency identified in Australia,
‘... unfair and opaque political financing and undue influence in decision making and lobbying by powerful corporate interest groups.’
Australia’s worst year ever?
A few other gloomy outcomes complete the picture for 2019:
- Australia reached a record number of underemployed workers;
- Australians aged 15-24 looking for work increased through 2019 by 10,100 with the jobless rate up to 11.6%;
- the long term unemployed – people jobless for more than a year – blew out over the year from 145,700 Australians by 24,400 up to 170,100;
- the average number of weeks the jobless spend looking for a job increased over the year from 49.8 weeks to 51.4 – almost a year; and
- productivity increased marginally but remains below the 2018 peak.
Overall, the outcomes confirm Australia’s economy is now more poorly managed than in any period since records have been kept, and possibly – yes, this is a big call – since Federation.
Robust global economy
There is no excuse for this. External conditions are as benign as they have ever been. Demand for Australia’s resources continues to be strong. Trump’s trade wars continue to benefit Australia, Brazil, Chile, Russia and some others at the expense of the USA. Corporate profits are at all-time highs.
Readers with good memories may have noticed an intriguing pattern. It seems the greater the vehemence and outrage with which the Coalition and its spruikers in the media denounced Labor’s economic outcomes, the worse has been the deterioration under the Coalition.
The debt and deficits were “a disaster”. Debt has now more than doubled. Tony Abbott wanted above all “to be an infrastructure prime minister”. He took construction to an all-time low. Interest rates clipped to 2.50% in 2013 were depicted as proving “the economy is struggling”. Now they are at 0.50%.
The Coalition promised “jobs and growth”. Both have tumbled disastrously down the global rankings from near the top to among the losers.
Role of the dominant media
This wretched regime could not continue without its enablers. According to the mainstream media, all is well.
Wednesday’s bleak growth figures were greeted with these headlines:
- ‘GDP surprises with 0.5% December growth’ (Herald Sun)
- ‘ASX higher after best day in two months’ (Australian Fin Review)
- ‘Economy gets unexpected lift as fourth-quarter GDP rises 0.5pc’ (The Australian)
- ‘Australia's economy beats expectations ahead of bushfire, coronavirus impacts’ (ABC News)
- ‘Economic growth defies critics: Treasurer’ (The West Australian)
- ‘December growth has Josh Frydenberg talking resilience, not recession’ (The Australian)
The media have no interest in reporting what is really happening. They serve their rich, often foreign, masters who love the current plan — to shift as much income and wealth as possible straight offshore.
Why increase family incomes or spend money on roads, rail and facilities in Australia when it could be spent on yachts, private jets and Richebourg Grand Cru in the Cayman Islands?
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