Election 2022: Can a Short-term Economic Indicators Save Mainstream Politics from More Adversarial Rhetoric?

The AIM Network

3 years ago

By Denis Bright

Josh Frydenberg’s address to the Australian Chamber of Commerce and Industry (ACCI) in Canberra brings the LNP’s campaign agendas back into full focus. The Morrison Government is depending on a budget bounce in polling to save some of the LNP’s furniture against a swing of up to 10 per cent in WA where the government holds two thirds of federal house seats from the 2019 elections.

With the announcement of the election date less than a month away, Josh Frydenberg must play the role of the loyal lieutenant as his magic short-term economic numbers ameliorate the forthcoming rendezvous with the electorate after a disastrous couple of years in Australian politics. At this stage, only a premature resignation of Scott Morrison could change the short-term agendas.

The Australian put a lot of weight on the ACCI address. It was published in advance of the address on 21 March 2022. The full text of the address is readily available on the Treasurer’s web site.

The LNP identifies itself as the appropriate administration to rebuild that old normalcy in the traditions of Menzies, Howard and possibly Josh Frydenberg in the future as Prime Minister or at least Opposition Leader after the 2022 election. Josh Frydenberg is splendidly qualified for either of these roles and is surely one of the most academically qualified Treasurers in the history of the Commonwealth of Australia.

The PM’s nostalgia for a return to normalcy was evident at a recent doorstop interview at the WA Chamber of Commerce breakfast on 16 March 2022:

We knew we had to spend during the pandemic to get the economy through, but we also know when it’s the responsible time to stop that and start returning the fiscal management, the money management of our economy and of the government back to more normal settings. And the Treasurer will have a bit more to say on that.

Right on cue, the ACCI address showed a grasp of detail with some assurances that the treasury portfolio was in caring and competent hands with its saturation of good short-term economic indicators.

YouGov polling was still highly unfavourable to the LNP. The Treasurer was enthusiastic about ameliorating these polling trendlines (Poll Bludger, 13 March 2022):

As reported in The Australian, the latest fortnightly Newspoll records no change for either major party on voting intention, with Labor retaining a lead of 55-45 on two-party preferred and 41% to 35% on the primary vote. For the minor parties, the Greens are down a point to 8%, One Nation is steady on 3% and the United Australia Party is down one to 3%, with all others up two to 10%. Anthony Albanese has drawn level with Scott Morrison on preferred prime minister for the first time since Morrison’s post-bushfires nadir in February 2020 at 42-42, after Morrison led 42-40 last time. Morrison’s approval rating is down two to 41% with disapproval steady at 55%, while Anthony Albanese is respectively steady at 44% and down one to 42%. The poll was conducted Wednesday to Saturday from a sample of 1520.

As mentioned in many previous articles, the future trendlines of our market economy are embedded in actual levels of capital expenditure rather than short-term economic projections.

Both federal and state deficit spending offered with bipartisan support have contributed to the current round of good short-term economic indicators although actual rates of investment growth are generally lower than a year ago in the latest ABS data.

Industry chain volume buildings and structures
	Sep Qtr 21 to Dec Qtr 21	Dec Qtr 20 to Dec Qtr 21
	% change	% change
Mining	4.5	14.1
Manufacturing	7.1	9.6
Electricity, Gas, Water and Waste	-6.7	4.3
Construction	395.5	94.6
Wholesale Trade	-21.9	36.8
Retail Trade	5.7	16.9
Accommodation and Food Services	-0.4	-5.9
Transport, Postal and Warehousing	-5.0	17.1
Information Media and Telecommunications	10.0	23.8
Financial and Insurance Services	-11.3	53.4
Rental, Hiring and Real Estate	-5.7	0.5
Professional, Scientific and Technical Services	117.2	35.2
Administrative and Support Services	40.0	-11.3
Education and Training	11.5	17.5
Health Care and Social Assistance	-5.6	-16.2
Arts and Recreation Services	40.2	90.7
Other Services	14.3	-16.1

Source: Australian Bureau of Statistics

In the longer-term, the trendlines in Net Capital inflow should be of concern. Any incoming government should want to reverse these downturns as supply problems emerge from current international tensions. As always, the RBA charts for March 2022 are worth considering. These structural problems won’t disappear by resetting the post-1996 button when the minerals boom was still on the ascendency after the election of John Howard. Any incoming government must be interventionist enough to talk up the value of the investment multiplier on behalf of the most disadvantaged sections of the community. Multiplier investment on behalf of disadvantaged Australians must surely give a higher priority to the employment and living standards of indigenous Australians and still reach out to other areas of chronic need. As a reward for saving at least some of the LNP’s furniture, Josh Frydenberg could easily come to terms with a more progressive economic agenda either in government or in opposition. In the 2020-21 budget, The National Indigenous Australians Agency (NIAA), the federal Indigenous body, will have almost $3.9 billion at its disposal for the financial year 2021-22, including $348.7 million in departmental resourcing. This was down from last year, where the NIAA ended up with over $4.1 billion. There is little enthusiasm for indigenous welfare in the Liberal Party’s national platform which offers just one commitment in the entire document amidst the numerous references to so-called free enterprise values.

The Europeans who began to settle Australia more than two hundred years ago did not come to an empty land. For tens of thousands of years, Aboriginal and Torres Strait Islander peoples had lived on this continent. Their contribution to Australia’s identity has been, and will continue to be, a vital and enriching one. The history of modern Australia and our democratic institutions reflects the traditions and institutions of Britain from which most of the original European settlers had come.

Over time, those traditions and institutions were adapted to Australia’s unique circumstances and came to reflect the evolution of a distinct Australian identity.

The outrageous deficiencies in indigenous health programmes were covered on a recent Four Corners programme which is available on iView from 7 March 2022.Much of the Four Corners programme was filmed on location in Doomadgee. Nearby, Boodjamulla (Lawn Hill National Park) is a mecca for tourists during the cooler drier months. Adjacent Adel’s Grove was developed as a private botanical garden a century ago by Albert de Lestang. In 2020, the site and business were taken over by Waanyi Advancement Limited Group, a commercial entity that fosters the economic development of the Waanyi people. Royalties from the Century Zinc Mine near Doomadgee have contributed to the advancement of the Waanyi People. The camping ground now known as Adel’s Grove was opened in 1984 by a private tourist operating group from Mount Isa. These gains came through a successful native title claim in 2010 over 1.7 million hectares of contested land. Community development programmes for Indigenous employment and development are largely bipartisan initiatives which can challenge the innate conservatism of Australian politics and its loyalties to short-term economic indicators which have minimal traction in remote communities. All sides of politics will support the Hon Ken Wyatt in his current initiatives:

The 2021-22 Budget ensures Indigenous Australians are fully part of the Government’s plan to secure Australia’s recovery, delivering the support they need to build skills, address barriers and find employment, with thriving families and communities that are safer, healthier and more resilient,” Minister Wyatt said.

Further measures will be released mid-year in line with the delivery of the Commonwealth’s first Closing the Gap Implementation Plan, which we are developing in partnership with the Coalition of Peaks and Indigenous Australians.

“Ahead of the delivery of the Government’s implementation plan for Closing the Gap, we are already moving on our priority reforms, reviewing a number of services to improve the way they work for Aboriginal and Torres Strait Islander people, according to their priorities.

“We have seen over the last year how effective we can be when working in partnership and we are committed to continuing to deliver our investments with that strong local input, so together, we can rebuild our economy and guarantee the services that all Australians rely on.”

To ensure employment services fit the changing job market in remote Australia and meet the unique needs of job seekers in remote communities, the Government will introduce a new remote jobs program in 2023, replacing the Community Development Program (CDP). This new program will be developed in partnership with communities and will complement the broader New Employment Services Model being rolled out in the latter half of 2022.

At least a stage has already been set for change by the LNP but the resources of $42.8 million being offered for the Indigenous Advancement Strategy (IAS) are still token gestures in an economy which offers too much in the way of middle-class welfare and legalized tax avoidance in that forthcoming $650 billion re-election budget. The words of the old number crunchers as policy advisers are hardly relevant to a new generation of Australians who are pretty disillusioned with mainstream politics in a week which should be devoted to the fond memory of Kimberley Kitching (1970-2022) who comes from a similar vintage to Josh Frydenberg. Reaching across the aisles to handle economic and social challenges should unite a new generation of still competitive leaders with their respective outstanding game plans.

[textblock style=”6″]

Denis Bright is a financial member of the Media, Entertainment and Arts Alliance (MEAA). Denis is committed to consensus-building in these difficult times. Your feedback from readers advances the cause of citizens’ journalism. Full names are not required when making comments. However, a valid email must be submitted if you decide to hit the Replies Button.