Economic growth slows, incomes surge and Coalition hypocrisy hits new high

The mainstream newsrooms buried the good news and magnified the bad in last week’s national accounts. Alan Austin reports.

THE CASE is strengthening that Australia has the worst economic reporters and the most hypocritical Opposition in the democratic world today. The appalling commentary on last week’s national accounts bolsters this view.

In Logan last Thursday, Treasurer Jim Chalmers opened the fifth Medicare mental health clinic, one of 19 planned for Queensland and 61 nationwide. This landmark reform will benefit millions of citizens.

The first question to the Treasurer from the gaggle of “journalists” was:

“Treasurer, do you acknowledge Australia is in a people’s recession when accounting for economic growth per capita, that many people are thousands of dollars worse off than they were when Labor first came into office?”

That was a regurgitation of one of several factually false narratives of the Liberal Party and the Institute for Public Affairs (IPA) and a smarmy attempt at a gotcha question.

Australia sets impressive trade records which newsrooms refuse to report

Recent World Bank data provides another endorsement of Prime Minister Anthony Albanese’s economy.

The IPA wailed last Wednesday that ‘Australians are deep in recession — record seventh consecutive quarter of per capita GDP decline’ and ‘This means Australians today are $4,310 per annum worse off due to this personal recession’.

That is ridiculously false. All economic datasets show some citizens remain in poverty, but fewer as a proportion of the population than in any previous period. Those not in poverty are richer than ever.

The latest data is from the National Debt Hotline (NDH) which reports at the beginning of each month the number of calls for emergency assistance for the previous month. This is the best real-time indicator of hardship increasing or decreasing.

Last Monday’s number for November was 12,230, a decline from the October tally of 12,979 calls and below the average of the first ten months of the year, which was 12,607.

The strongest evidence that poverty is easing, however, is comparing calls now with past years, before the recent inflation surge. Calls in November 2017, the first year of NDH records, numbered 14,829. This increased in November 2018 to 15,741, then declined in 2019 to 14,196. If we regard the pre-COVID period from 2017 to 2019 as fairly normal times, then the situation today appears unusually benign.

(Yes, this is only one source. But this is consistent with all the others.)

Meeting the global challenges

Last Wednesday’s national accounts show Australia recorded positive quarterly GDP growth for the 12th consecutive quarter.

The only other wealthy members of the Organisation for Economic Cooperation and Development (OECD) to achieve this are Belgium, Spain and Costa Rica.

None of these has an economy anywhere near as strong as Australia’s. They all have worse inflation, much higher jobless rates, lower wealth per person, more than double the debt to GDP, are all in budget deficits and none has triple-A credit ratings.

‘Labor big spenders’ myth can finally be laid to rest

Substantial evidence from independent agencies last week has affirmed the Albanese Government’s economic credentials.

Australia’s 0.33% growth is above the September OECD average, which is 0.25%, now ranking 13th among all 38 member countries. That’s up from 35th in September 2020 and 36th in September 2021 under the Coalition.

Australia’s economy overall, given global conditions, is the envy of the world.

Workers’ well-being advancing apace

Other good news items in last Wednesday’s accounts include real net national disposable income growing by 0.4% for the year to September 2024, the household savings ratio lifting to 3.2% and the share of national income going to employees continuing to rise.

The workers' share is now 53.5%, up from 49.3% under the Coalition. That’s the highest since September 2016. See chart below.

Commensurately, the percentage going to corporate profits has declined from 33.0% when Labor took office to 27.9% in September.

The false mantra of the per capita recession

Disappointing outcomes in the September accounts include that productivity remains stalled; commodity prices have been declining; wage growth continued to grow faster than the CPI, but not as fast as earlier in the year; and that economic growth of 0.33% was below population growth of 0.61%.

It is true that GDP per person has been declining, as in most advanced economies. But that does not mean anyone is experiencing lower living standards.

Consider a family of four – two parents and two kids – with a house, two cars and other assets valued at $1,000,000. That means each family member is worth $250,000. If they have another child, bringing the family to five, wealth per person drops to $200,000. Simple arithmetic.

Does this mean that Mum, Dad and the first two kids have lost $50,000 each and now must live in far deeper poverty? Of course not. Families don’t work like that. Neither do nations.

No one will be deprived of essentials because of population expansion. It is a trade-off in which the social benefits outweigh the financial adjustments.

Australia’s aggregate wealth increased through the September quarter. That it increased slightly below the rate of population growth is an interesting observation, but does not affect anyone’s standard of living.

Business is booming — defying newsroom doom and gloom

Australian businesses have had a highly profitable year. Thanks, Jim, thanks, Albo.

Coalition cant and hypocrisy

Responding to last week’s national accounts, Shadow Treasurer Angus Taylor asserted that ‘Australians’ living standards have fallen off a cliff — the largest fall on record’. This is manifestly false, as shown above.

He added:

‘The Treasurer’s addiction to spending is keeping inflation in Australia higher for longer.’

The biggest spend was on defence, required to meet foolish and unnecessarily costly commitments made by the corrupt and incompetent Coalition.

Inflation when Labor took over was 6.12%. It is now 2.15%.

The Coalition parties, the IPA and their spruikers in the mainstream newsrooms are craven liars seeking political gain by fomenting needless anxiety, depression and anger — the very evils the current Government’s mental health initiatives are striving to eliminate.