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The ‘economy’ is not working as it is ‘supposed’ to

The old rules of thumb about the economy do not seem to be working and I have a theory as to why. But let’s look at the evidence first.

Company profits are high. Unemployment is low. But wages aren’t growing.

Factors contributing to this include significant underemployment, job insecurity, exploitation of temporary visa workers, the rise of labour-hire firms, and the undermining of unions…and the greed of those who think they are entitled to a larger return on investment than those who actually work for a living.

Interest rates are at record lows but investment has not been forthcoming.

This is partly due to uncertainty about government policy but also largely due to a lack of demand. People aren’t spending.

Despite the most generous property tax concessions in the world, construction is decreasing, there is a lack of affordable housing, and 120,000 people are homeless.  Investors drove up house prices and then took advantage of the scarcity to charge high rents.

When money was rolling into government coffers during the Howard era, he decided that he would give people who didn’t work and didn’t pay tax, but owned shares, a tax refund of what the company had paid in tax. That is patently unsustainable, especially when we are in deficit, yet the recipients are fighting tooth and nail to hang onto something they must surely see is not fair.

When we had carbon pricing, polluters paid and the government redistributed that revenue through a higher tax-free threshold, increased pensions, and various other payments to welfare recipients to alleviate any costs passed on by business. Businesses paid for research and development of new technologies to help them reduce emissions.

Now, the government pays billions to polluters and emissions keep rising every year.

We have signed various free-trade agreements but, in every budget, they have been reported as a cost through lost tariffs and cheap imported competition for many local industries. The free trade agreements combined with government refusal to extend subsidies saw the extinction of our motor vehicle industry and the many thousands of jobs it provided.

The government is promising lots of money in the future for treatment of various ailments but little towards prevention. Despite primary healthcare being much cheaper than hospitals, funding has been frozen leading to increased costs for consumers that make them less likely to have regular tests and to see a doctor early when there may be a problem.

Funding for community groups that help with crime prevention through early intervention and support has been slashed resulting in shocking incarceration rates, particularly for Indigenous Australians.

We spend a fortune on anti-terrorism yet hundreds of people die each year in a domestic violence epidemic.

There is an enormous cost to our economy and our society from alcohol and gambling addiction, yet we see some of our politicians think it appropriate to go on a giant pub crawl around the nation, and to wind back gambling reform laws and advertise horse-racing on the sails of our Opera House.

So now to my theory (well everyone’s really) as to why the good economic figures are not translating into good outcomes for society.

Wealth concentration.

Scott Morrison wants to tell you how much tax the top 10% pay but he will never tell you how much wealth they own.

As fewer and fewer people own an increasing proportion of the world’s wealth, they are strangling the very people they rely on – their workers and their customers.

It seems greed wins for now. But sooner or later, they will realise that we either play as a team or we perish.

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24 comments

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  1. DrakeN

    Just so, Kaye.

    One major source of the problem is that the commercially owned media have largely set the agenda in favour of ther own cohort of profiteers.

    Another is that too large a portion of the population is so embroiled in their own petty lives that they have allowed themselves to be gulled by advertising and religious and political propaganda.

    If I had a dollar given with each piece of advice telling me that I think too much, then I’d be able to buy up all the CBA shares on the market and gift the ownership back to the general public who rightfully own it.

    (Just imagine – “The Commonwealth Mutual Banking Society of Australia”, a community owned financial service.)

  2. New England Cocky

    Now, now Kaye Lee, your blood pressure seems to be boiling … you just have to believe the MSM propaganda that the Liarbrals are the best economic mangers because they have achieved all their financial goals and only increased the national deficit by a mere doubling!!

    Then there is the corporate croneyism to sell empty water licences for premium profits immediately sent off-shore to the Cayman Islands to prevent payment of Australia taxation. Thank you Barnyard and Gus.

    Check out the list of financial achievements in John Lord’s Election Diary No 10 …and ensure all your neighbours and everybody else can see just how efficiently the Australian voters have been scammed by the Lazy Nasty People misgovernment.

    And all this has occurred without any mention of closing down the automotive assembly industry with a loss of about 200,000 manufacturing jobs yielding about $30 BILLION per year.

    Now that about $150 BILLION EACH YEAR gifted free, gratis and for nothing to the undeserving wealthy and corporates … is there any doubt that the RAbbott Turdball Morriscum misgovernment is a competent financial manager??????

  3. Kaye Lee

    DrakeN,

    There are others who are working so hard actually helping other people and achieving things as well as looking after their families that they have no interest in politics and no knowledge of what goes on. And I am thinking of clever admirable people that I love and respect. I must say, i only got public with my views when the media started circling around Julia Gillard and, having known Tony Abbott when we were young, I thought WTF are you doing. I have to start injecting some truth in this discussion. So my original catalyst was personal. I knew Tony. Plus I have more time now than I used to to read…and scribble.

  4. Kaye Lee

    NEC,

    My blood pressure is fine – I avoid stress.

    And I am strangely bored by this campaign. I truly can’t listen to another announcement from either of them. I do not want to see a photo of any of them doing anything. I do not want them trying to shake my hand or bring film crews into my business. I have not accepted their invitations to attend local forums. And I am so over how to vote cards that I think they should be banned.

    Four years ago I wrote “The sequel to the Little Book of Big Labor Waste”. As it turns out, I should have called it volume 1 in the Encyclopaedia of Coalition Indulgences.

    https://theaimn.com/the-sequel-to-the-little-book-of-big-labor-waste/

  5. Keitha Granville

    I was not a political animal at all until Bob Hawke promised to save the Franklin River.

    And then there was Julia . . . . what a country we had, what a country we could have been had they recognised her value.

    We MUST remove these vile corrupt beings from our parliament, we MUST regain our country.

  6. Alasdair Wardle

    The bargaining power of employees has been decimated, union membership is down and the result is low wage growth. Company profits are doing fine, Executive salaries are fine. We seem very slow to connect these factors

  7. David Bruce

    We have low inflation says ScuMo! When you take food and energy costs out of the equation, he maybe right? Lies, damn lies and statistics!

  8. John Hermann

    The general population don’t know what is happening, and they don’t even know that they don’t know – Noam Chomsky.

  9. Yvonne Robertson

    I think it’s going to be alright. I read Laura Tingle suggesting that the enormous amount of pre polls cast is bad news for the Coalition and that this was showing up in seats like Tony and Peter’s in particular!

    Personally, I think lots of people are hurting even if they’ve never known who the PM is. Many are peeved about the overthrow of their darling Malcolm and just as many remember what a Fizza/Tosser he was (and is). The Liberals have got nothing but fear and smear and it’s not going to look any more attractive in the repeat because it simply serves to show how lazy they are and that they’ve got nothing except of course the fictitious budget they point to every time they are asked about their plans for the future.

    There are the young who have enrolled in vast numbers and many of we older gens, wanting climate change action decades ago and who are now hanging hysterically by a thread. I have been so anxious yet suddenly, for no discernable reason, I feel a sense of calm. Scudmo can continue to smile, snipe and pretend to shear sheep. GHunt can continue to talk about ‘Little Stepahnie’ and other fictitious characters who once were dying only to be healed by interesting sounding medications he personally placed on the PBS. Barnaby can go into hiding pretending he actually did a day’s work that wasn’t set to benefit his own fiscal bottom line and Peter can pretend he’s not still got his eye on the leadership for which he is uniquely unsuited.

    The gig is up. People are on to them. They’re not sure they’re going to like the other mob any better but they’ve got to try and I don’t think they’ll stay with this lot. It’s like watching a very SlowMo train wreck. It can’t be helped by looking.

  10. Barry Thompson.

    I too read and was cheered up by Laura’s article Yvonne.
    Your comments mirror my own thoughts. I think most voters have already made their minds up.

  11. Kaye Lee

    Morrison likes to attack Bill Shorten saying he will hit older people’s savings. Record low interest rates have already done that. He attacks him for his negative gearing and capital gains tax policies saying it will bring house prices down. Changes to lending laws have already done that. He attacks him for his renewable energy target at the same time as bragging about the investment in renewable energy that is happening now. He says it will drive up power prices but he has overseen huge increases in the last six years. He brags about low unemployment figures but underemployment has meant it has not translated to higher wages. He brags about their spending restraint yet has more than doubled the debt.

    FauxMo is all talk and no trousers.

  12. whatever

    Someone else here made the point that the LNP and their Addams Family weirdo friends could “govern from the Senate”, considering they will still have the numbers in the upper house.

  13. totaram

    I am hoping that Labor will win government so that we will be rid of this bunch of venal and malicious crooks and rorters. However, that will not make the economy work well for everyone. The reason is that Labor is as wedded to the neoliberal macroeconomic mythology as anyone else. You only have hear Chris Bowen telling us how he will deliver even larger budget surpluses than the present lot. That is what scares me.
    With not much hope of a surplus on the foreign account, a government surplus can only mean increasing private sector debt (the good old 3 sectors financial identity). With the private sector already struggling with massive debt, the chances of it taking on more debt are remote. So what will happen? Attempted fiscal tightening by the government and the private sector together, leading to a recession. The coalition will yell and scream “we told you so!” and Labor will get turfed out after one term. That is my big fear.

    Bill Shorten and the Labor team have to have the intestinal fortitude to deliver enough deficit budgets to get the economy going again. Will they manage it?

  14. Barry Thompson.

    Morrison refused to appear on Insiders this morning, sending the Treasurer instead. When he boasted of having delivered a Budget surplus, Barrie Cassidy didn’t pull him up and point out it was only a forecast for next year. It’s that sort of thing that allows the LNP to get away with so much bullshit. It’s bloody annoying. Lift your game MSM, don’t give these bastards an easy ride.

  15. Kaye Lee

    Morrison has also studiously avoided Q&A where Bill will appear on Monday night. ProMo doesn’t do well when challenged. The hectoring tone of voice surfaces. He is hoping to sail through this election without having to explain or defend his own vision or lack thereof. One thing Barrie did push this morning was tax cuts, then what. Frydenberg had no answer. Cassidy also said, if you started fresh, would you give 6 billion to shareholders or to childcare. No answer again.

  16. New England Cocky

    @Kaye Lee: Just like the Andersen’s King, the PM has no policies; he’s altogether as politically naked as the day that he stole pre-selection.

    From John Lord’s Election Diary No 10 AIMN:

    “3 Now let’s examine the following to see if the Coalition does really handle money as well as they say they do.

    A) They paid $1.2 million for Michaelia Cash’s legal bills.

    B) And $184 million for the fake reopening of Christmas Island.

    C) And another $60,000 for a media stunt on the Island.

    D) Wasn’t there about $50 million paid to Cambodia to settle a refugee.

    E) Then there was the $423 million “closed tender” contract with Paladin for a 17-month contract to deliver services for 423 refugees.

    F) And $200 million for re-election propaganda advertisements for the Coalition.

    “The purpose of propaganda is to make you feel good about the wrongs being perpetrated on you.” JL

    G) Do you remember the $30 million gifted to Murdoch’s FOXTEL the Minister for Communications Mitch Fifield have never adequately explained.

    H) And what about $2.8 billion wages cuts for Australian workers.

    I) An $889,000,000 tax concession for Murdoch.

    J) And the zero tax paid by Gina Rinehart.

    K) There are 75 millionaires who pay no tax. And 745 corporations who pay no tax.

    L) $4.2 billion was moved offshore by Murdoch in order to pay no tax.

    M) $126 million was wasted on a postal survey vote for same-sex marriage to find out something that was already known and the parliament could have voted on.

    N) $80 million for dodgy water buy-backs. We may have paid for a glass of nothing.

    O) $200 billion for obsolete weapons.

    P) Then there is the $65 billion for corporate tax cuts when we are awash with debt.

    Q) Remember the $17 billion they were going to give to the big banks.

    R) And $60 million for a Captain Cook statue in Morrison’s electorate.

    S) Plus $6.7 million to re-enact the circumnavigation of Australia, which Cook never did.

    T) What about the $7.7 billion for fossil fuel subsidies.

    U) And the ludicrous $444 million gift to the Great Barrier Reef Foundation.

    V) And $3.8 billion to boost weapon sales.

    W) The government has spent 74 million of our taxes to pay Nickel Mining workers some of their entitlements; Clive Palmer has paid his workers ZERO.

    X) Remember the $60 million Royal Commission witch-hunt against Unions and Labor.

    Someone sent the aforementioned to me; I filed it without attaching a name so I cannot vouch for the veracity of every one of the items mentioned but my memory tells me they are not far off the mark. So do you think the government has really handled our money well?”

  17. paul walter

    Here are a couple of stories on a related issue that shows the depth of the government’s moral bankruptcy.

    https://www.abc.net.au/triplej/programs/hack/2030-people-have-died-after-receiving-centrelink-robodebt-notice/10821272

    https://www.theguardian.com/australia-news/2019/may/05/centrelink-drops-womans-robodebt-after-she-mounts-court-challenge?CMP=share_btn_fb&fbclid=IwAR1whucYJL9H0iDy3efJ5LOe6JMCw8yvti2bM_g4jp_CLMBH0z-pDfEwfyY

    The first indicates the bloody lengths this despicable government is prepared to go to indulge its own sadistic pathological sickness, not just on Nauru of Manus or in the Middle East, or in cruelty to indigenes, but through wider class warfare here.

    They are, in the most real sense, war criminals.

    The second demonstrates the cynicism and despicable slyness, the tacit acknowledgment through its response to its horrific criminality.

  18. Sean Burnett

    Kaye Lee

    Society will never get to play as a team but as greed continues and the world keeps heating the top end of town will keep getting richer and adding to our demise as a species and the LNP and their mates will continue making excuses for not playing as a team!

    ying as a team.

  19. Paul Davis

    Just watched an extended interview on ABC 24 with Paul Keating and two very junior ABC cadet journalists, a boy and a girl. OMG. The girl, poor dear, tried to be polite through gritted teeth while the boy, Andrew something, barely suppressed his resentment at not tripping up the old bugger. When the two inexperienced pests didn’t interupt him, Keating answered their questions fully giving frank and clear explanations on superannuation, franking credits, the economy, energy generation, wage reform etc.. Would love to see Keating debate Howard … or even better Morrison😁

    Earlier on Our ABysmal, i heard the announcer say that Morrison was today for first time campaigning on NSW central coast ….. isn’t that where he and Michaela Crash lampooned electric cars and promised to save my ute?

  20. CommonA

    Kaye,

    Perhaps you could explain to me why anyone should not receive the franking credits. As far as I understand it, the company who made the profit already paid the tax on the profit, then gave what was left to shareholders, along with a credit for the tax already paid.
    This is done so the profit is not taxed twice. (https://www.asx.com.au/education/investor-update-newsletter/201805-how-franking-credits-work-and-who-benefits.htm) It also encourages Australians to support Australian companies and buy their shares.

    Why should any section of the community be taxed twice? If the person does not pay tax, then they should receive the full amount, because as the owner of that portion of the company, they already paid tax, (and shouldn’t have – they don’t pay tax) – so just like everyone else who overpaid tax, shouldn’t they get it back?

    I can’t help but think that this is just a way to reduce the incentive for Australian citizens to own shares in Australian companies (as only Australians can benefit from the franking credits)… only to be eagerly gobbled up by the Super Funds. How un-Australian is it to encourage Australians to invest in non-Australian companies, where they may get a fuller measure of the profits of the funds that they invested?

    Am I wrong?

  21. Miriam English

    New England Cocky, thanks for posting that list, May 5, 2019 at 3:50 pm. I’ve edited it a bit for brevity and reposted it to my facebook page.

  22. Kaye Lee

    CommonA,

    The franking credits ARE the tax paid by the company. Far from double taxation, if that money is refunded to shareholders who pay no tax then the company pays NO tax on its profit.

    Franking credits are a tax offset just like the low income and seniors tax offsets (which are not refunded if no tax has been paid). A tax offset reduces someone’s tax liability. It is not money they have paid that should be refunded to them because they have paid too much.

    If you are a pensioner or part pensioner, you are exempt from the changes. If you are not a part pensioner then you already have reasonable assets or income above and beyond your home. You will still receive dividends on your shares. If those shares are not returning a good enough dividend then you have choices.

    We are the only country in the world to do this and it goes along with all the other unsustainable tax loopholes introduced by the Howard/Costello misgovernment – the most profligate in history who frittered away the nations resources windfall and put systemic pressure on future budgets.

  23. paul walter

    They gave it away by the tens of $billions to big companies and rich magnates, Kaye Lee.

  24. LOVO

    It’s the excess after the offsetting that Howard f’kd up….the free money bit 😤 , some would call it a loophole, whereas I would call it an atypical LNP rort….milking the cow, as it were… (which of course is at the expense of ordinary Australians ). Those that argue to keep the rort are addicted to the ‘free money’ bit and couldn’t give a toss about their fellow Australians in their faux justifications (a.k.a RWinger’s, another name would be “selfish”, another name would be leaners, self centred users, leaches, blood sucking Tic’s…puss..) ‘nough said 😤

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