Three important articles have been published this month that highlight the declining state of the Australian economy. Despite the rhetoric from leading government members, things are not as they say. The fact that we have heard almost nothing about these disturbing trends in the main news cycle is more than a little concerning.
One of Professor Bill Mitchell’s daily blogs this week paints a depressing picture. Crickey challenges the Treasurer Scott Morrison’s honesty and his competence and Roy Morgan Research reveals the true state of unemployment. In all probability, only a small percentage of Australians even noticed them.
The CPI figures released earlier this week tell us we recorded a quarter of deflation. Which means we are going backwards. Bill Mitchell had this to say about it….
“The smug Australian government – conservative to the core, dishonest on a daily basis, running a daily scare campaign where all that matters is the fiscal deficit and how our AAA rating from the (corrupt) rating agencies will be lost if we don’t record a fiscal surplus as soon as possible.
It fails to mention that we have around 15 per cent (at least) of our willing labour resources not being utilised at present. It fails to mention that inequality and poverty is on the rise. And now, the Australian Bureau of Statistics has told us that this is a government that has finally plunged the nation into a deflationary spiral.
We are now so obsessed with fiscal balances that do not matter, that we ignore the things that actually impact on the well-being of the citizens. And now deflation has arrived. The Australian Bureau of Statistics released the Consumer Price Index, Australia – data for the March-quarter 2016 yesterday.
The March-quarter inflation rate was negative (-0.2 per cent), which means Australia has now entered a deflationary period – a reflection of our poorly performing economy. The annual inflation rate is 1.3 per cent, which is well below the Reserve Bank of Australia’s lower target bound of 2 per cent.
The RBA’s preferred core inflation measures – the Weighted Median and Trimmed Mean – are also now below the lower target bound and are trending sharply down. Various measures of inflationary expectations are also falling, quite sharply, including the longer-term, market-based forecasts. It is time for a change in policy direction although next week’s fiscal statement (aka ‘The Budget’) will likely just reinforce the current malaise. A sorry state.”
Crickey zeroed in on the Treasurer, Scott Morrison. Politics editor, Bernard Keane wrote…
“Morrison has universally underwhelmed since he became treasurer. But he has shown a genuine capacity to repeatedly lie about the budget, so we at Crikey have decided to keep on fact-checking Morrison every time he does so.”
Keane then goes on to detail that 1) We are being taxed more under the Coalition, 2) Morrison is presiding over rising government spending, 3) Bills blocked in the senate are not the problem.
The devil in the detail exposes Morrison’s dishonesty or incompetence, or both. The evidence is his own MYEFO statement last December in Table D1 and Table D3 (shown below). They show both an increased tax burden current and future and higher spending current and future. Worse still, the numbers in the budget papers are based on the assumption that all the government’s saving measures, currently blocked in the senate, will be passed.
Which means that even if they are eventually passed, he will still be taxing more and spending more.
Yet he continues to infer greater expenditure and increased taxes under Labor!!!
And finally, Roy Morgan Research reported earlier this month that Australia’s real unemployment level is now more than double the official ABS figures. Executive Chairman, Gary Morgan says…
“In March Australia’s real unemployment increased to 11.0% (1.422 million people looking for work, 54,000 more than a year ago) and under-employment increased to 7.8% (1.011 million, up 35,000) – a total of 18.8% (2.433 million) Australians looking for work or looking for more work.”
The survey on Australia’s unemployment and ‘under-employed’* is based on 3,997 face-to-face interviews in March 2016.
So why the huge disparity?
The ABS classifies a person as employed if, when surveyed, a person worked for one hour or more during the reference week for pay, profit, commission or payment in kind, or even if a person worked for one hour or more without pay in a family business or on a farm.
The Roy Morgan Unemployment estimate is obtained by surveying an Australia-wide cross section by face-to-face interviews. A person is classified as unemployed if they are looking for work, no matter when. The results are not seasonally adjusted and provide an accurate measure of monthly unemployment estimates in Australia.
Bill Mitchell gives us a chilling assessment of our economy when he says, “Far from being a nation of free souls, we are, in reality, a collective of idiots – running headlong towards the cliff!”