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Ignore the polls — Turnbull should resign over his economic incompetence

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(Meme via @theamwu)

Malcolm Turnbull has rejected calls for his resignation on reaching his 30th negative Newspoll. He should depart, however, for failing where it really matters. Alan Austin reports.

ON MONDAY (9 April), Malcolm Turnbull declared that “the substantive reasons” for challenging Tony Abbott for the PM’s job in 2015 “were related to economic leadership and governance”.

By any fair analysis, Australia’s economic leadership over the last two and a half years has been appalling. On these grounds, therefore, Turnbull should go. And he should take the whole tawdry Coalition with him.

Shifting wealth and income from the bottom to the top

Most Australians in the lower 80% of the population by wealth are now poorer than when the Coalition took office in September 2013. The majority lost out badly under previous PM Tony Abbott, with the hapless Joe Hockey as his Treasurer. But things have gotten worse, not better, under Turnbull, with Treasurer Scott Morrison trying desperately to manage the books.

The top 10% have done quite well. The wealth owned by this sector increased from 50.3% of all wealth in 2013, to 51.3% in 2015. It jumped again in 2017, to 52.3%. That’s according to Credit Suisse’s annual global wealth reports.

The top 1% fared even better. From holding 20.4% of all Australia’s wealth in 2013, this rose to 21.4% in 2015 and up again to 22.9% in 2017.

Meanwhile, the share held by the bottom 60% of Australians fell from 17.2% in 2013, to 16% in 2015 and down to 15.3% last year. With corporate profits and executive salaries soaring and wages stagnating, this will likely be even lower later this year.

Value of the currency

All who earn income in Aussie dollars or hold wealth in Australia have been impoverished by the extraordinary devaluation of the Australian dollar since the 2013 Federal Election. The currency has plummeted relative to all major currencies as GDP growth, trade, productivity and incomes have steadily deteriorated, and as deficits have become entrenched and the debt – both government and private – deepened.

The Aussie dollar fell significantly during the Abbott period against the euro, the Japanese yen, the Thai baht and the NZ dollar. It fell disastrously – by more than 14% – against the South Korean won and the Taiwan new dollar.

It has fallen even further against all these during Turnbull’s regime.

The dollar fell badly during the Abbott period against these but has recovered marginally since against the U.S. dollar, China’s yuan, the British pound, India’s rupee, the Singapore dollar, Indonesia’s rupiah, the Vietnamese dong and the Hong Kong dollar. But the Aussie still remains well below its 2013 levels against all 14 of these trading partner currencies.

This means overseas travel costs much more, imported goods are more expensive and local manufacturers must pay more for imported components or raw materials.

Foreign property buyers are now finding Australian properties – city real estate, farms and outback cattle stations – much more attractive to snap up at auction.

Australians on fixed incomes living abroad have had their incomes decline in value by up to 20% since the Coalition came to office.

The disadvantages of a collapsing currency far outweigh the minimal advantages.

Jobs deception

Bragging about his economic “wins”, Turnbull has told anyone with a microphone this week that 2017 saw “the strongest jobs growth in our nation’s history”. That is false.

Yes, the raw number of new jobs in any calendar year has not been higher than the 403,000 recorded by the Bureau of Statistics in December. But with childbirth and migration, Australia’s population has never been higher either.

All “growth” numbers must be measured against this. The strongest growth in jobs relative to the adult population in history was actually in calendar 1989 when Bob Hawke was PM. Hawke beat Turnbull’s achievement – relative to population – also in 1985 and 1988.

People unemployed

When Abbott took office in September 2013, 692,700 Australians had no job. That was 5.7% of the workforce.

By September 2015, the number of people unemployed had ballooned to 776,300 and the rate had risen to 6.1%. Now, after 29 months of Turnbull, the jobless number is 734,100 and the rate 5.6%.

Although that is superficially an improvement on Abbott’s numbers, Australia’s ranking in the world has tumbled through the current global jobs surge. In 2013, Australia’s jobless rate ranked seventh in the OECD. By 2015, Australia had slipped to 14th. It has tumbled further since, to 17th now.

Long-term unemployment

At the 2013 election, 133,200 people had been unemployed for a year or more, 19% of the total jobless. Too many. This expanded dramatically after the election and reached 184,100 when Abbott was deposed. It has risen since then to 194,200 in February, which is 26.5% of the jobless.

Deeper and deeper in debt

This could have been Turnbull’s most humiliating area of economic failure. Fortunately for him, the mainstream media agreed after the 2013 election to boycott the subject – the hottest political topic through the Labor years by far.

For the record, these are the progressions from September 2013 to September 2015 to now on debt:

  • Net debt, according to the Finance Department: $161.3 billion, $256.3 billion and $344.9 billion. Hence this rose 59% under Abbott and another 35% under Turnbull.
  • Gross debt, according to the Office of Financial Management: $270.0 billion, $383.9 billion and $522.3 billion. Up 42% under Abbott and 36% under Turnbull.

Not capable of leadership

Other areas of Turnbull’s failure include wage levels, underemployment, jobless youth, retail sales, trade, GDP growth, national income, national net worth, housing and construction, infrastructure and government waste. It has been an appalling period of deterioration while all well-managed economies have advanced impressively.

It was true of Tony Abbott in 2015 when Turnbull declared:

“Ultimately, the prime minister has not been capable of providing the economic leadership our nation needs.”

It is true of Turnbull now.

You can follow Alan Austin on Twitter @AlanAustin001.

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