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SACK HOCKEY. WE NEED A JOB CREATION PLAN, NOW!

The Australian economy is heading down a slippery slope. Successive data released by the Australian Bureau of Statistics this week all points in the same direction. Last week the national accounts figures showed national growth below trend at 0.3% for the September quarter, and annual growth at 2.7%.

A growth rate of 3% is necessary just to maintain the existing workforce. Therefore, it was no surprise that Thursday’s employment figures for November showed a further increase in unemployment of 0.1% to 6.3%. Worse still was the finer detail. There were only 1800 new full time jobs created and 40,800 part time jobs. The creation of only1800 full time jobs in November is a damning indictment of the government’s fiscal policy.

It means the underutilisation rate, i.e. the total of unemployed and underemployed, has reached 15%. In body count terms that is a total of 1,848,100 people either not working or working reduced hours. That figure by any measure is a crisis. It is a clear indication that the government’s economic policy is a failure and shows that Joe Hockey’s austerity economics is taking precedence over the need to tackle unemployment.

depressed The government in its infinite stupidity still thinks it needs to cut spending. The lunacy of this thinking can be demonstrated quite simply. To continue trying to reduce the fiscal deficit while industry is in the doldrums will lead to depressed output and a continued reduction in the national income which in turn will cause a reduction in demand; in short, a never ending downward spiral.

This will lead to further unemployment and less tax revenue, which means the fiscal deficit will continue to rise anyway. Little wonder then that the Consumer Sentiment Index also released this week shows further decline and is now down to the same levels experienced during the GFC.

Why is this not obvious to Joe Hockey?

The index was 105 index points in December 2013 and today it is 91.1 points, a slide of 14% in one year. In fact this decline started with the end of Kevin Rudd’s fiscal stimulus. These figures may not mean much to the average man or woman in the street who still has a job, but they are a sure-fire indicator that worse is to come. That should make those who are employed, either full or part time, feel very nervous.

In the words of Bill Mitchell, Professor of Economics at the University of Newcastle, New South Wales, “The Government should abandon their ideological obsession with supply-side punishment regimes and realise that the unemployed cannot search for jobs that are not there.” The government’s policy settings are all wrong and they will continue to worsen unless a well planned and executed stimulus is put in play.

If Joe Hockey cannot see what is coming, he should not be in the job. The present policy of fiscal austerity is counter to the OECD working paper released December 9, 2014, entitled – Trends in Income Inequality and its Impact on Economic Growth – by Federico Cingano. The paper’s major findings were that the gap between rich and poor was at its highest level in 30 years, that income inequality and underinvestment in education were the major contributors to this gap and that promoting skills and learning across families and youth was paramount in arresting job decline and promoting growth.

neo lib As Bill Mitchell says, “We need a government to get involved in providing public services and infrastructure particularly to low income groups.” The current neo liberal philosophy of supply side economics is a proven failure and by pursuing it our government is taking us down a slippery slope to economic disaster.

And what is our government doing at the moment? They are trying to stifle youth education and engage in austerity economics in a vain effort to return to surplus. This is madness. We need a job creation program now, one that is backed up by skills training in areas that will increase production to meet demand.

If we continue with Hockey’s austerity program, by this time next year unemployment will likely be close to 7%, revenues will have further declined and welfare payments increased to such an extent that the deficit will break through $50 billion. It is already $34 billion compared with the May budget estimate of $29 billion.

2016 There is no joy in saying those figures will be the end of the Abbott government. The misery of those who will be unemployed and underemployed, part of a sub-class of Australians, the legacy of a failed economic policy, will be more than enough for an incoming government to deal with. To avoid a looming catastrophe we need a job creation program now or we travel down the road to perdition in more ways than one.

But don’t take my word for it. Read Bill Mitchell’s most recent blog, and make your own judgement.

23 comments

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  1. Kyran

    I was listening to Radio National yesterday and heard an interview with an economist (can’t recall the name) on the release of the figures. He was being “funny” in his commentary, suggesting he’d never seen economists agree before. His analysis of the figures was disturbing, not just due to the underemployment component. His analysis also suggested many of the jobs being “created” were in the receivables area, ie in house credit control and collection, an area that has been ignored, in his opinion, in the recent past by many corporations. This interested me, as I have been involved in process serving and debt collection for decades. Going back to the recession we had to have, I recall many involved in debt collection predicting a boom for the industry. They had forgotten their history. When times get “tight”, most creditors are reluctant to pursue debt too aggressively and will normally proceed cautiously. It is better to hold a “doubtful” debt on your books as opposed to issuing proceedings (incurring legal fees) and confirming it is a “bad” debt. In my experience, when confidence is down (consumer and business), their is a downturn in legal process being issued. From first hand experience I can say it has been “quiet” from about April this year. I agree, Mr Kelly, with the basic tenet. I am very worried for many Australians if this government (alleged) doesn’t do something very quickly. The auto industry and various manufacturing industries shutdowns are not yet factored into these figures. They likely won’t figure until mid to late next year.
    Thank you for the read

  2. Salstarat

    Sloppy Joe (in-the-hock) Hockey is DUMBED DOWN to knuckle dragging idiocy! He has ZERO training, qualifications nor experience in anything relating to finance: ie accountancy? No! economics? No! how about book keeping? No! how about the most basic elementary level of financial planning? No! … Hockey is a man without a CLUE and his arrogant, cigar chomping assistant, Mathias Cormann hasn’t got one iota of training or experience in any element of finance either. This is the MAJOR problem when there is an over-supply of slimy, self seeking LAWYERS put into positions where financial expertise is IMPERATIVE! The neoliberal, fascist LNP are OVERFLOWING with corrupt, LYING lawyers who have zero moral compass. They are sending this country BROKE with their wasteful excessive spending on weapons of war and vandalising our environment beyond recognition. GET RID OF THE LNP …. they couldn’t manage a piss up in a Hotel if drinks were on the house!

  3. Kaye Lee

    Meanwhile this government is relaxing the rules about 457 visas. 126,350 457 visas were issued in 2012-13 and that number is rising under this government. This is to give businesses “more flexibility” apparently.

    The 2014-15 Migration Programme’s 190 000 places comprise 128 550 places for skilled migrants including employer sponsored migrants, general skilled migrants and business migrants

  4. John Fraser

    <

    Reserve Banks Glenn Stephens appears to be slightly delusional.

    And is relying on Hockey to improve the Australian economy and workforce.

    Did I say Glenn Stephens "appears" to be delusional. ? ….. if I can spell his name wrong then I can certainly get that wrong.

    Australians "triple dip" recession started in October but acknowledging that will take until mid to late January.

  5. Wun Farlung

    The worst issue is the under employed figures that are very hard to place a number on although the author has had a stab I would suggest it is higher.
    When travel expenses and lack of rental assistance or a healthcare card many under employed are on par or in some cases worse of than someone on the dole.

  6. Kerri

    We will never have a job creation program under Hockey Abbott and especially Abetz. Their attitude is DIY. Abetz actually said, when asked what if there are no jobs available?, “then they will just have to look harder!”
    A fiscally competant government would prop up failing industries and encourage everyone to spend by stimulating their consumerism and thereby stimulate the economy. This lot can only spout negativity and drive down spending with doom and gloom. And Hockey actually thinks that by saying “spend, spend, spend.” Everyone will and the economy will recover. He is a grade A moron. Before the election I told my family and friends we will end up in recession. It’s all these idiots are capable of. No government in the world will be able to clean up this godawful mess. Keating said “the recession we had to have” because he could see it coming. These knuckle dragging imbeciles would run to the ocean to see where the water went in the event of a Tsunami. (Actually I rather wish they would do that) this will be the recession they are too incompetant to avoid. We need to impeach or declare no confidence or uncover Abbott’s hidden citizenship. Stop the world I want to get off!!

  7. John Fraser

    <

    @Wun Farlung

    And youth unemployment figures in some areas as high as 24% …. and those figures are moths old.

    Up on the Sunny Coast (Qld) the ar**hole Brough has been flogging the Abbott government employment schemes (keep a job for x months get money, get a job away from where you live and get paid to move) but he will not give out the numbers of people who have taken up these offers.

    http://www.sunshinecoastdaily.com.au/news/loans-on-offer-to-help-out-apprentices/2478558/#c1003923

    I am "johnx74" in Comments.

  8. Pingback: SACK HOCKEY. WE NEED A JOB CREATION PLAN, NOW! | THE VIEW FROM MY GARDEN

  9. stephentardrew

    John:

    Read the Darling Downs article and was totally shocked. What an appalling tragedy and nowhere to be seen on MSM. My heart goes out to these people.

    It is now that they need a Union. Barnaby Joyce is a complicit mealy mouthed coward. They should have strung the bastard up by his ankles and told Abbot to come and get him. I would have kidnapped the bastard and done something as a social reactive.

    These farmers have got to learn to fight. Stop the Police entering properties. Form a coalition to protect other farmers. They need someone who understands them to help counteract the guilt and get them to act politically.

    I know its not easy but years of Country Party complicity has left them abandoned. Someone needs to convince them to join the Greens.

  10. stephentardrew

    Lee:

    I really despise these bastards.

  11. Bacchus

    Wun Farlung,

    The underemployment rate is reported by the ABS along with the unemployment rate each month – that’s where the figures come from. We rarely hear of the underemployment rate or the participation rate because the MSM either doesn’t report them, or glosses over them.

    LABOUR UNDERUTILISATION (QUARTERLY CHANGE)

    * Trend estimates: The labour force underutilisation rate increased 0.5 pts to 14.8%.
    * Seasonally adjusted estimates: The labour force underutilisation rate increased 0.6 pts to 15.0%. The male labour force underutilisation rate increased 0.5 pts to 13.1%. The female labour force underutilisation rate increased 0.7 pts to 17.2%.

    http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0

  12. Bacchus

    stephentardrew,

    Dr David Pascoe was due to appear on The Project this evening. I haven’t watched it yet – I believe it’s repeated later in the night.

  13. stephentardrew

    Thanks Bacchus missed it but will watch later tonight.

  14. Kaye Lee

    “No qualifications, all the excuses that Wayne Swan talks about – falling commodity prices, a high Australian dollar, nominal growth not being up to standard. Somehow the GFC is ongoing all the time,” Mr Hockey said in 2011. “So yes, we are upset about this … they think the Australian people over summer will forget the solemn promises.”

    That was 2011….so what does Joe say now that he is in the job?

    Treasurer Joe Hockey has admitted his promise of a balanced budget in four years cannot be achieved, blaming many of the same external factors Wayne Swan used to cite, and for which he was condemned by the Coalition.

    Asked if MYEFO will show the deficit has deepened, Mr Hockey said: “Well, yes it will. We have faced some significant headwinds this year. Obviously the global economy has come off a bit, iron ore prices have dropped dramatically and we have had some opposition in the Senate that has made it harder.”

    He said the delayed surplus was a deliberate measure to avoid dampening economic activity with a sharp withdrawal of public money.

    “We want to keep the economy going, we want to keep it strong …we want to keep that momentum going,” he told Sky News.

  15. stephentardrew

    I’m little Joe and I love to have a go at being a big fat liar just like uncle Tony an, an me rich mates.

    You see you lot look at all the graphs and charts upside down cause your are lefty, socialist, commie, robbers whereas I am an honest conniving liar making you all suffer for your own best interest.

    And if you are good little surfs we will let you put your mouth under the tap and have a little drip. Mind you its gotta be one at a time because, as responsible capitalist pigs, we can’t afford to trickle down more than one drop at a time can we?

    See so everything is going to be OK because you just don’t understand whats good for you whereas I do.

    Now pass the bloody legislation or I will kill – oops I mean um, er take your house, cars and starve ya.

    What was that Peta we are already doing that.

    Well that’ll show them thankless swill wont it?

  16. JohnB

    Well said Kaye,
    Hockey/LNP would allow Swan no excuses – remember the GFC that never happened according to the LNP – up until the election that is.

    There must be some good video to be found of Joe making a blustering fool of himself belittling Wayne Swan’s effective budgets in parliament on youtube.

  17. DanDark

    The Sloth said “Well, yes it will. We have faced some significant headwinds this year.”

    All this talk about, steering the ship forward, scraping the barnacles off, significant headwinds, etc etc
    I wonder sometimes why they use these analogies, they are not in a ship crossing the Bass Strait
    They should have their feet firmly planted on the earth and not speak these gibberish analogies to do with ships and sailing,
    These dickheads couldn’t sail a canoe down a narrow straight creek,
    let alone a friggin ship they keep telling us they are running,
    they are running a Gov when will they get that through their thick bloody heads

    I wonder if they have their size life jackets on order because they will need them,
    They havnt even got through the entrance yet and Smokin Joes talking about past headwinds LOL
    I reckon the seas are about to become 20 foot swells and Captain Tones and crew will be stuck at the bottom of one in their leaky Dingy with no paddles….

  18. John Kelly

    Bacchus, David Pascoe did appear and gave a good account of the story and why he became involved. A big rap for Bob Katter and nothing for the rest of the politicians involved. It appears they have forced the banks to announce a moritorium, something Pascoe described as a bandaid to cure a disease.

  19. Loz

    Lazy Hockey and this imbecile government must go before they ruin us all.

  20. lucychili

    you do not need financial qualifications if your decisions are oriented around self interest. or interest of your sponsors.
    you do not need any of the expert objective advisers on policy committees if you do not care what happens to the system you govern other than winding it down. you do as you please.

    you do not care what happens to the employment figures or to the budget and debt either. they are irrelevant if you only care about self interest. if you do not care about taking the living aspects of the country forward with you, from its people to its living landscape, agriculture, safe water, reefs, agriculture, then you trash all those things and are left with ore. what a shame. no obstacles to mining. that could be their catch cry really. no obstacles to mining. if you view all actions through that lens they are congruent. perhaps it is a kind of nihilist anarchic response to climate change. proactively generate systemic death so redundant humanity have no safe water or food, expand mining assets, military to protect them.

    i wonder about the tension between chinese agricultural and general investments in au and fracking, mining which would seem to be removing the water they need to make use of those assets.
    are they setting up au to be the bait in a war between china and usa over their assets?

    people have been saying double dissolution for a long time but i don’t see it happening?
    would it make a difference? are labor running from the same program?
    i don’t know whether focusing on the individual personalities in office is of any value.
    you have to assume that there is a lot of money with this strategy in mind and then decide how to respond to that world view.
    given the inequality, war, fracking, destabilisation, corruption, banking malarkey going on over the world it seems to be a very popular strategy. no wonder lima was challenging.

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