Alan Austin analyses the Turnbull Government's economic performance since Scott Morrison took over the reins as Treasurer and concludes that rather than improving, things really are "spiralling out of control".
HOPES BY BUSINESS, workers, the welfare sector and others that Scott Morrison might rescue Australia’s tanking economy appear to have been dashed.
As reported here and elsewhere in the alternative media – but not by the mainstream press – Hockey and former PM Tony Abbott in Opposition, identified 23 areas of the economy which needed repair. They promised to strengthen all of them. With the global economy steadily advancing, this was a credible ambition.
Instead, all 23 indicators have deteriorated, many of them disastrously. There has been not one single success under PM Tony Abbott and Treasurer Hockey. That is despite overall progress in external circumstances — China’s gradual slow-down notwithstanding.
So it was with keen anticipation last September that the abacus passed from Hockey to Morrison, who had been portrayed by the mainstream media as having performed well in the first Abbott ministry as minister for border protection. That portrayal is now looking tattier by the day.
Indicators of no confidence in the new treasurer now include:
1. Government debt
Australia’s net debt has continued to expand. At the time of Morrison’s ascension, the Finance Department recorded net debt at $256.3 billion. Finance Minister Mathias Cormann revealed on Friday debt in December had ballooned to $274.1 billion. That’s up 7% in four months, an annual rate of increase of more than 22%.
That compares with the annual growth of debt during Labor’s last full year of 5.2%. Remember Labor left a net debt in 2013 of $178.1 billion, an amount Morrison’s colleagues described as “a disaster” and “spiralling out of control”. They promised to reduce that level by $30 billion.
With these MYEFO figures Morrison is talking tax cuts? Incompetence in suits = LIberals. pic.twitter.com/T92Js6jzIA— Human writes (@ianw84) January 23, 2016
2. Company values
Australian Stock Exchange (ASX) prices reflect not just current profits of listed companies but also expectations of future earnings and capital growth. The ASX 100 Index has collapsed from 4313 index points, shortly before Scott Morrison was sworn in as treasurer, to 4077 on Friday. That’s a drop of 5.48%, or nearly 16% annualised. On Wednesday, it was 4016 — the lowest level in more than two and a half years. Thanks, Scott.
3. Aussie dollar
The value of the dollar also reflects present realities and future expectations. The higher the dollar the better for the vast majority of Australians. At midnight on Friday the Aussie dollar was worth 70.3 U.S. cents. This is a slight recovery from a disastrous 68.3 cents earlier in the week.
But that is down significantly from 71.94 the day before Morrison became treasurer and down disastrously from US$1.04 the day former PM Julia Gillard called the 2013 election.
4. Business confidence
Measured by the ANZ-Roy Morgan agency, this has shown a steady decline since Morrison took charge. In October, the index was 119.3. This dropped slightly in November, further in December and then down to a miserable 113.2 last weekend.
5. Consumer confidence
Measured by the Westpac-Melbourne Institute, this has also collapsed. The index rose after Morrison’s appointment to 101.7 in November. It has tumbled each month since to just 97.3 points in January. Depressed confidence means restrained spending, lower business turnover, declining profits, lower tax receipts and fewer jobs.
6. Building approvals
This is probably the most concrete indicator of current and future optimism – or pessimism. According to the Australian Bureau of Statistics (ABS), the number of dwellings approved fell 1.9 per cent in November and has now fallen for eight consecutive months.
Those are just six developments Scott Morrison dearly wishes he could have concealed as "on-water operational matters". Just one of these would have been an embarrassment. But all six at once?
The first sign of Morrison’s ineptitude as treasurer actually came early. It was a reasonable expectation that he may have declared swiftly the nature of the problems and articulated the required solutions. These were not hard to discern. Australia’s most glaring fundamental problems since the change of government in September 2013 are these three:
1. Taxes collected from large corporations and high income individuals have slowed to a trickle;
2. Budget and other decisions have shifted wealth and income from the poor and lower middle sectors to the rich and especially the very rich overseas; and
There are no other fundamental problems. The declines in all 23 economic indicators are attributable to one or more of these three realities. Yes, some commodity prices have fallen. But others have risen. And the price of petrol has dropped to a level Wayne Swan would have gladly swapped his world’s best treasurer gong for.
The appalling evasion of tax by the top end is clearly revealed by Australian Tax Office (ATO) annual reports, testimony to the current Senate tax evasion inquiry, statements by ATO commissioners, the ATO transparency report, court cases, individual company annual reports and analysis of the national accounts.
Was it too much to hope that Morrison might have addressed one or more of these at the outset? Apparently so.
Two questions now must be asked by observers of Australian affairs — including voters who will decide later this year whether Morrison and his colleagues will continue their inept maladministration. Is the extraordinary decline in Australia’s economy from the moment the current administration took over the result of mere incompetence? Or, is the central Coalition philosophy of supporting the top five per cent the root cause?
And Scott Morrison? Yes, he sounds smooth, calm, confident and reassuring. But does he really have a clue?
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
Morrison Futures: Going, going ... says Bob Ellis. Is Bob on the money again? http://t.co/Pfqd7lu2S7— IndependentAustralia (@independentaus) September 18, 2015
Keep up. Subscribe to IA for just $5.