Politics

November data confirms Australians will be poorer for years to come

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Morrison and Turnbull (30/11/17): asleep at the wheel (Image screenshot of video via @TurnbullMalcolm)

October and November 2017 have arguably been among the most disastrous months for the mismanagement of Australia’s once great economy in a generation.

New “worst-ever” records were set for full-time jobs, government debt, retail trade, wealth of the bottom 50% and Australia’s ranking in the world on overall economic management.

Government debt deeper

Friday’s Office of Financial Management figures showed gross debt at a record $515.9 billion. The Coalition has now added $246.0 billion in just over four years.

That is much more than the $212.0 billion Labor added in its five years and nine months – during the global financial crisis (GFC).

Rate of debt increase

Gross borrowings in November were $9.8 billion, bringing the new debt so far this calendar year to $51.2 billion — an extra $5.12 billion each month, on average.

That compares with the monthly increase through Labor’s last eleven months of $1.89 billion.

Wealth of the top 10%

Credit Suisse released in November its 2017 Global Wealth Report and Databook. These include damning data on shifts in Australia’s wealth over the last four years.

The percentage of Australia’s entire wealth held by the richest 10% [Databook, Table 6.5, p156] has increased significantly since 2013. The average for Labor’s last three years – 2011 to 2013 – was 50.0% exactly. It rose to 51.1% in 2014, then 51.3% in 2015.

It is 52.3% this year.

Wealth of the 1%

The top 1% have been even bigger winners. From an average wealth holding of 20.1% during Labor’s last three years, this rose to 21.1% in 2014, then 21.4% in 2015.

It has continued upwards, to 22.0% last year and 22.9% this year.

Wealth of the bottom 50%

In Labor’s last two years, 2012 and 2013, this was steady at 10.4% [Table 6.5, p156]. Pretty low, but a great improvement on 7.7% in 2010 when the Credit Suisse series began. This fell – yes fell – in 2014 and 2015 to 10.2%, then plummeted in 2016 to 6.2%.

It appears to have recovered to 9.5% this year. Next year’s number will indicate whether either of the last two numbers might be aberrant.

Median wealth

This reveals the population’s overall affluence. As distinct from the mean average, it also reflects wealth distribution.

This peaked [Table 2.4, p33] at a world-high US$209,907 in 2012 when Australia had the world’s stand-out economy. Australia maintained the top median wealth until 2014 when the economy began its steep decline. It slipped to second-ranked in 2015, third in 2016 and remains third this year, behind Iceland and Switzerland.

Employment

The Turnbull Government has bragged about recent job numbers, most of which simply reflect the rising population via natural family growth and migration. Thousands of these “new jobs” are just clawing back severe losses in the Abbott years, when employment collapsed dramatically.

In October, 701,478 people were still unemployed. This is the 49th consecutive month the total has been above 700,000. The last time that happened was in the dark Howard days back in 1998.

Percentage of all workers with full-time jobs

This was just 68.52% in October, bringing the total number of consecutive months below 68.70% to 20. This ratio has never been this low for this long in Australia’s history.

The lowest this reached during the Howard, Rudd and Gillard years was 69.70% — even through the devastating GFC.

Long term jobless

At the 2013 election, 135,100 people had been unemployed for a year or more, below 20% of the total jobless. This expanded dramatically after that election to peak at 185,200 in February 2015, or 24.2% of those out of work.

It is now 163,800, at 23.3%.

Global comparisons

The extent of the damage the Coalition has done to the workforce can be seen in comparisons with other developed countries.

In September 2013, at the end of the GFC, Australia’s unemployment rate was 5.7%. This ranked seventh among the 35 developed members of the Organisation for Economic Cooperation and Development (OECD).

In October this year, after four years of robust global economic recovery, Australia’s jobless rate was 5.4%. This ranks 17th in the OECD — the lowest since records have been kept.

Retail sales slump

The increase in retail turnover in September this year over September 2016 was just 2.02%. That is the smallest rise in this critical indicator since the ABS series began in 1982. It represents a substantial decline in real terms after adjusting for population – up 1.61% – and inflation – now 2.0%.

Figures released in November show Australia’s latest 12-month tally has risen by less than half the long-term average. Some sectors have gone backwards, including department stores, household goods, and clothing and footwear.

New house approvals

So far this year, January to October, approvals by councils for new homes have numbered just 181,910. That is 8.4% below the same period last year and 8.8% below 2015.This is despite a housing shortage, plentiful cheap labour and record low interest rates.

All-time low on the IAREM

The 2017 Independent Australia ranking on economic management (IAREM) published this week reveals the world’s top 30 economies in order of performance.

From 2010 to 2013, Australia had the best-performed economy in the world — the top economy by a fair margin. It fell to 3rd place in 2014. It tumbled further to 9th in 2015. Then down to 13th in 2016. This year it has fallen to 18th.

The tragedy for most Australians – except the top 10% – is that their quality of life has been reduced significantly and is unlikely fully to recover for decades to come.

Treasurer Scott Morrison must be ecstatic that attention is now focussed on other disasters of his Government’s making.

You can follow Alan Austin on Twitter @AlanAustin001.

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