When Scott Morrison was asked how he could regain voters’ interest and trust, he replied “Just by being direct and honest about how you see things, not sugar-coat things and just be as real as you can be”.
Well, yes, that would be good, Scott.
But apparently, as “real” as Scott can be, is to cherry-pick figures, give no context, omit any that are unflattering, and to, half way through his second term in government, still blame Labor and especially that “untrustworthy” Bill Shorten.
With the Labor Party focussing on inequality and stagnant wage growth, the Coalition are being forced to start thinking about the workers.
Scott is proud of his slogan, “jobs and growth”, and says they will inevitably deliver wage rises.
“If you think about where is wage growth going to come from, it’s got to come from a growing economy. The money has to be there. My view is we need the best environment for businesses to grow. That is the best opportunity to ensure wages can lift,” says the Treasurer.
Arguably, that may have been the case in the past, but it is patently not so now.
Our economy has experienced uninterrupted growth for over 26 years.
As reported in WAtoday in November last year, statutory profits for the ASX 50 almost doubled from $61.3 billion in 2015-16 to $120 billion for the year to 30 June 2017, driven by a large surge in profits for the mining sector up $27.7 billion.
The surge was led by Rio Tinto and BHP Billiton, whose profits soared fivefold. The five miners, BHP Billiton, Rio Tinto, together with West Australian companies Fortescue, Newcrest Mining and South32, reported a combined 13 per cent increase in revenue and a 426 per cent increase in profits as commodity prices and production picked up.
Imagine if we still had the mining tax.
The energy sector had a stronger year (AGL Energy, APA, Oil Search, Origin Energy, Santos, Caltex Australia, Woodside Petroleum) reporting a 6 per cent increase in revenue and a 127 per cent increase in statutory profit before tax.
Imagine if we hadn’t gone for the short term sugar hit of privatising our electricity generation and network. It also begs the question as to why we got such a big hike in our power bills.
Overall, according to the ABS, company profits rose by 20% to the year ended 30 September 2017, but the only wages that are going up are the excessive bonuses for CEOs.
The NAB monthly business survey for December said that “Strong business conditions are broad-based across all major industry groups with the exception of retail.”
The business conditions index was unchanged at a strong +13 index points, which is well above the long-run average of +5 index points.
So with business conditions and profits at very high levels, and supposed jobs growth of over 400,000, we should see wages going up.
Except they are not.
According to Alan Oster, NAB Group Chief Economist, “the NAB Business Survey employment index has not experienced the same wild swings in recent years as the official employment survey from the ABS, and tends to suggest the official figures may be currently ‘overstating’ the degree of job creation. The employment index implies employment growth of a little less than 300K at present, and a slowdown to around 240K per annum over the next 6 months, or a monthly pace of around 20K per month.”
In the past year, real household disposable income fell 1.9%, meaning that the level of income households have at their disposal is lower than it was five years ago.
And it’s not likely to change any time soon.
As reported by the ABC, Australian workers who have endured record low pay increases over the past couple of years are unlikely to see their incomes rise soon, with miserly wage increases locked into enterprise agreements (EBAs).
So to sum up, Australian businesses have never had it better. Business conditions and confidence are high, investment and profits are up. On the other side the equation, job creation figures are dubious, wages are stagnant and disposable income is going backwards.
You may have to reconsider your reality, Scott.
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