Australia has just consolidated its status as the developed country with the most dismal record of economic management over the financial year just ended. Alan Austin reports.
THANK GOODNESS the test cricket, the footy finals and the tennis are providing distractions. With most economic data for the financial year 2018-19 now delivered, Australia ranked lower than ever within the Organisation for Economic Cooperation and Development (OECD). The OECD is the club of 36 wealthy mixed capitalist economies with which comparisons can be made.
The facts and figures confirm Australia’s economy is currently managed by one of the world’s least competent administrations: the Morrison Government.
The number of people unemployed at the end of June was above 710,000 for the first time in 13 months. The jobless rate was 5.24%, which ranked 19th in the OECD. That was the worst ranking since records have been kept.
Average weeks jobless spend looking for work
In June 2013 this was 37.7. By June 2018, it had risen to 49.6. By June 2019 this was up to 50.9, more than 13 weeks longer than when the Coalition took office.
Workers over 65
The number of Australians above the retirement age having to return to work soared over the financial year, from 542,400 to 610,000, an all-time high. The percentage of the population over 65 now working increased from 13.9 to 15.1%.
At the start of the 2018-19 financial year, 231,400 workers aged 15 to 24 were out of work. That rocketed over the year to 252,000.
Only five OECD countries with youth jobless above 10% saw the rate increase — Estonia, Finland, Hungary, Ireland and Australia.
Annual GDP growth
Ten countries saw their rate of growth in gross domestic product (GDP) tumble by more than 1.5% of GDP in 2018-19. These included Australia.
The puny GDP increase for the June quarter brought annual growth to just 1.44% to the end of June. This is the worst for any financial year since 2002-03.
Australia’s OECD ranking crashed to 23rd, as shown in the chart, below. This is the lowliest since records have been kept.
Australia has nearly always been in the OECD’s top 15. Through the global financial crisis, from 2008 to 2013, ranking on GDP growth was mostly top five. Australia reached top spot ten years ago under a Labor Government, in 2009, as shown here:
During the year, the Reserve Bank slashed interest rates to a new all-time low of 1.25%, thus confirming Australia’s economy was struggling badly. (It has been cut again since to 1%.)
Only three developed countries lost more than 4% of their currency’s value relative to the U.S. dollar over the 2018-19 year. They were Turkey, Iceland and Australia. The same three were the only ones to lose more than 2% against the Euro.
The latest comparative figures show 18 of the 36 developed economies are now in balance or surplus with the other 18, including Australia, still lagging in deficit.
At 30 June, Australia’s gross debt was $542 billion. That’s up $10.06 billion over the financial year.
We can see also that net debt has blown out over the year from $342 billion to $373.5 billion. That’s a thumping $31.5 billion turnaround or 9.2%.
This consolidates Australia’s position as having the second-highest debt blow-out of all OECD countries since 2013. Only Chile has fared worse.
Interest paid on the debt
The Coalition paid $17,154 million over the financial year. That is $4,945 million more than Labor paid in its last year.
Retail trade record low
Total retail turnover for the financial year was $325.4, an increase of only $9.6 billion or 3.04% over the previous year. Given population increased 1.77% and inflation was 1.6%, that was a decline in real dollars relative to population.
The result for 2018-19 was only fractionally above the previous year’s abysmal 2.56%, the worst outcome on record. The year before that was just 3.13%. So for three consecutive years, retail sales growth has been below 3.2% and thus below the rises in population and prices. That’s the only time this has occurred in 36 years.
The average growth for the 30 years prior to this is 6.1%.
Stock market performance
The Australian Stock Exchange All Ords increased just 6.5% over the year. That was well below the U.S. Dow Jones Industrials (9.6%), Bombay’s Sensex (11.2%), the Latin America 40 (14.3%), the Swiss all-share index (17.9%), Euronext NV (22.2%) and Brazil’s Bovespa (38.8%).
Housing index declining
Trading Economics shows rises and falls in the value of housing for 35 developed countries. The latest data for 2019 shows only seven of these 35 have lost housing value. They are Chile, Italy, Finland, Iceland, the United Kingdom, Sweden — and Australia.
There is no excuse for Australia’s economy to have collapsed so badly on these indicators, all of which reflect the wellbeing of the majority of citizens.
In addition to the 13 areas of failure, above, these others have also deteriorated:
- hours worked per person;
- wage levels;
- household disposable income;
- wealth per adult;
- construction activity;
- new dwelling approvals; and
- national net worth.
All of these have steadily improved in most countries through the current post-GFC global boom.
The rich get richer
Meanwhile, indicators which show the rich dining out are rising steadily. Exports are at all-time highs. The trade balance is in record surplus. The current account has returned to surplus for the first time since 1975.
Company profits are booming. The percentage increases for the last three years, as reported by the ABS, were 22.2%, 10% and 10.9%.
Policies not working for the majority
Clearly, this Coalition Government is serving the big, foreign corporations first and foremost, careless of the welfare of most Australians.
Now, what are the scores again in the cricket?
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