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Time is running out, Malcolm

Malcolm Turnbull just doesn’t get it. Or, perhaps he does, and he is hoping against the odds that the situation will improve by the time he finds himself forced to call an early election.

The problem is wages growth, or more particularly, the lack of it. He has been trumpeting the success of his government’s ‘jobs and growth’ platform now for months, citing the creation of 377,000 jobs in 2017 as evidence of that success.

The problem is, that so many jobs created should, by economists’ reckoning, have generated a competitive demand for labour which in turn, should have brought about a more competitive market in wages. But it hasn’t. So where have the profits generated by this job’s bonanza gone?

This is Turnbull’s dilemma. How does he explain to those thousands of white and blue-collar workers who are employed by highly profitable firms that their share of the rewards that they helped produce, have been soaked up by executive bonuses and share buy-backs?

When will it be the workers time to reap some of the rewards?

“Wages growth will come,” he says, “because a stronger economy results in more investment, more jobs and more intense competition between employers for workers.”

Turnbull should think about who he is talking to. His comments might go down well with the business community who are more than happy with the status quo, but it’s unlikely they will cut with average worker who has been starved of any of any meaningful wage increase for nearly five years now, while shouldering significant increases in the cost of living.

By any measure, most Australian workers have gone backwards. It has been a gradual deterioration since 2013 and a far cry from the promises the “adults” made when they rubbished Labor’s handling of the economy between 2007-13.

The very fact that the 700,000+ unemployed people today is the same as it was when the coalition won government in 2013 should send warning signals to every coalition member in Canberra. It simply doesn’t add up, unless one concludes that the job’s bonanza has nothing to do with government initiatives and everything to do with population increase.

It’s not peculiar to Australia. In the UK, Europe and the US, workers are experiencing similar imbalances, which makes one wonder if we do all exist in a matrix. Turnbull, however, should know that it doesn’t matter how good the economy is performing if the voters are not sharing in it.

He can say whatever he likes, but nothing resonates with people more than having to stretch the budget further to accommodate rising food and insurance costs, let alone mortgage rates. And if he is sprouting his government’ success while families are struggling to pay their bills, that will end badly for him and the government.

Reserve Bank boss, Philip Lowe, is on the worker’s side, saying they should demand higher wages. He knows that some banks have already increased mortgage rates, and if interest rates around the globe start to rise generally, he will be forced to follow suit to protect the dollar. Any interest rate rises here, without a pay increase will precipitate a rise in unemployment.

The time for self-congratulatory back-slapping is about to end for the government and some serious explanations given for the present wage/growth imbalance. There’s an election coming, most likely this August or September, and the clock is ticking.


23 comments

  1. Harry

    Spot on John. Wages are not going to rise anytime soon with un and under employment still high. The deck is stacked against the average (non-unionised) employee. Union coverage is somewhere around 15% at what must the lowest level ever, the industrial power balance has been deliberately tilted towards employers by the abandonment of the post-war commitment to full employment (less than 2-3%), privatisations, outsourcing and offshoring.

    And we have a government which trumpets the virtues of matching taxes with spending when it could spend strategically much more to stimulate demand and introduce measures such as a Job Guarantee (an offer of federally funded but local government managed employment in public sector works at a living wage- at least the minimum wage in the public sector to anyone who wants work but cannot get it) would quickly return us to genuine full employment. Only full employment is likely to result in a change in the imbalance of power between employers and employees.

  2. pierre wilkinson

    All true, but do not hold your breath waiting for this mob to suddenly become aware of the worker’s plight…. although watch for a tax handout just before the election is called – or a promise to do so if re-elected.

  3. Peter F

    A fistful of dollars is heading our way. They might even rerun the ads.

    However, read this from 9th April 2016:

    “Prime Minister Malcolm Turnbull says next month’s federal budget will not throw a “fistful of dollars” at voters, and declared Australia’s economic transition will be the central issue of this year’s election.

    Treasurer Scott Morrison will deliver his first budget on May 3, and Mr Turnbull said it would be financially conservative.

    “This budget will not be about a fistful of dollars, it will be about prudence, fairness and responsibility to our future generations,” he told the Victorian Liberal Party conference in Melbourne.”

  4. Andreas Bimba

    “Only full employment is likely to result in a change in the imbalance of power between employers and employees.”

    Yes that’s the core issue Harry and that is why we have a 19.4% unemployment/underemployment rate – as determined by Roy Morgan research.. The corporate oligarchy and plutocracy want high unemployment and they achieve it primarily by demonising federal government deficits and debt which for a currency issuer isn’t even debt as it is commonly understood. Balanced federal budgets over the economic cycle is still ALP policy so they are also dancing to the oligarchy’s tune and are also condemning one fifth of the Australian people to a miserable existence in poverty. What a criminal waste of potential.

    The Conservatives are just scum for making all of Australia’s problems much worse and sistematically destroying what is good and blocking meaningful progress.

    “Jobs and Growth for the top 1% “

  5. Christopher

    Thanks John. When you have millions (roughly about 10% of the people in this country) with visas, student, tourist, and 457s and the like, allowed to compete with Aussies for jobs…

    Well it’s a bonanza for business owners.

    Heck, no right to work? She’ll be right mate, we can pay you off the books.

    I’m in Cairns, and the morality or lack of it, is commonplace here among business owners. Even the managers are on 50k plus super, some of them working 60 hours a week and more.

    Every employer here pays the minimum wage – the absolute minimum to stop you going – $25 per, casual, no minimum hours is the going rate, much less if you need to work in the ag sector. Slavery, everywhere you look, we walk past them in the mall every f*cking day.

    What a joke. This place is going down faster and faster. When you have the public servants in Canberra on their six figures (mind you you need six and more to live there these days), they are all blind to the rest of us on incomes of 20 and 30 thou a year.

    Need a party for the people. Oh, yes, we’ve got one

  6. jane

    While the IPA/Liars are in power, working people will NEVER get a fair deal. The Fizza government has made it illegal for workers to withhold their only asset-their labour, by going on strike. This corrupt mob is only governing for ntheir tax evading wealthy individual & corporate mates & doinors.

  7. Don A Kelly

    Former State Premier, Labor’s ‘Big Feller’ Jack Lang was the people’s champion. He remarked during retirement “If I had my way, Parliament would enforce a minimum wage for every Australian adequate for the wants of a man, wife and three children. I’d do away with lying statements about prices invariably rising because of wage increases. Why are wages and not profits, always to blame?” It will be 104 years next month since J.T.(Jack) Lang delivered his maiden speech in State Parliament, as the member for Granville.

  8. Jaquix

    I study the comments on Facebook to political posts. Malcolm’s always attracts barrage of angry people. Theyre judging him onthe actions of his govt, not what the politicians say. They’ve woken right up to Malcolm. They see through the spin. They’re scornful of the media attempts to discredit Labor and Bill Shorten. I’m discounting troll accounts here. The trolls come out in droves on any post from Bill Shorten himself. It’s clearly an orchestrated attack. Their profiles give them away. Dutton has several “social media” on staff. What would they be doing, do you think?
    Author is correct. Turnbull is talking to his business base. And clearly has no idea of what matters to most Australians.
    His much trumpeted speech at Toowoomba was so boring and predictable. Message being “we’re doing great, jobs and growth, business will invest more and its going to end up in paypackets – so we’re not going to do anything different! ” That message is the message of a party going to go down thegurgler.

  9. Christopher

    John, it would help you and the site if you responded to comments and nested them like NC.

    Just sayin’

  10. Harry

    It seems the Coalition’s pre-election strategy will be to dangle income tax cuts in front of the voters. They will try to get corporate tax cuts through in the next budget and wrap the legislation up with tax cuts for wage earners. These will very likely advantage the high income earner the greatest (rather then increasing the tax free threshold as the Gillard government did). Whatever, it could be politically difficult for Labor to oppose them as wage earners have not had a fair pay rise for a number of years.

    The danger is that the Coalition will then try to “make up” the tax “revenue” lost by cutting spending further in their ridiculous pursuit of a budget surplus. Odds on if that happens the cuts will hit those who benefit from that spending the hardest.

    If we think of federal taxes as destroying a certain amount of purchasing power rather than providing funding for the fed govt the question then becomes: whose taxes should be cut the most and whose the least?

  11. Matty

    Even Henry Ford knew that well paid workers ment the working man could also buy the same cars he produced. Not only that having well paid workers mean workers can buy houses, take out the family & splurge effectively stimulating the economy far more then the rich could do on their own.
    Dwight Eisenhower reasoned (successfully) that 90% corporate tax fiorced corporations to spend in new eras. Gives them a choice of grow business or make a minimum profit. Hoarding cash doesn’t help economies, spending does, that’s what Capitalism is based on.
    But it seems the modern wealthy are the opposite of this relying on government protection & cheap labour whilst paying virtually no tax. My Grandfather was wealthy owned a gold mine & in partnership with others, most of his wealth he gave back to the nation. He built up the southern Cross & founded the WA goldfields. During the depression he helped hundreds of Australians including local indigenous peoples. When he died he died simple basically middle class & that’s how he lived his whole life. You won’t see wealthy like that anymore. In fact the only Wealthy West Aussie mining magnates you know of is Lang Hancock, Gina Reinheart & Twiggy Forrest, yet the name Lesley Clarke has slipped out of history.

  12. Phil

    Turnbull hates ordinary Australians.

    He has cut the ground out from under the average Aussie. He’s cut the lowest paid sectors penalty rates; he’s created a virtual slave labour system for young people in his PaTH boondoggle; made Centrelink access so dispiriting and difficult that the neediest have given up; demonised trade unions and turned the public against the only institution that gives them a collective voice; removed the right to strike; he’s trying to kill public advocacy; defunded indigenous support programs; starved legal aid support services; on and on and on it goes.

    Turnbull hates ordinary Australians.

  13. Möbius Ecko

    Latest Essential Labor +1 L-NP -1 to go back out to an 8 point gap.

  14. Harry

    I thought this quote from a US-site could unfortunately be very applicable to Oz, though I hope the Australian voters will not be sucked into voting the Coalition back come 2018 or 2019!

    “After forcing through a tax law that adds $1.5 trillion to the debt, and also massively increased military spending, and demanding billions more to finish a useless border wall, the GOP now has “discovered” that Medicare and Social Security, which primarily benefit the 99%, need to be reduced.

    So they will try to cut these valuable programs that aid the 99% and cost the 1% nothing, though these programs do help narrow the Gap between the rich and the rest — something the rich do not want.

    In summary, the GOP believes that you can mistreat the 99% “dogs,” but if you toss them a few crumbs, they will lick your face in the elections”.

    https://mythfighter.com/2018/01/24/treating-the-99-like-dogs-the-crumb-theory/

  15. Alpo

    Indeed!…. The Liberal propaganda and the propaganda of the Liberal-supporting Media (just about every mainstream media, now including the ABC and, in some articles, sometimes even The Guardian) have been relentlessly pounding the readers/listeners/viewers with the constant mantra that the Liberal Government have been able, singlehandedly, to turn the corner and are making “Australia Great Again”. They keep repeating that this has been possible thanks to Turnbull’s “extraordinary leadership and statesmanship, not to speak of geniality and amazing knowledge, mixed with an unparalleled communicative ability and personal charm”… (did I miss anything?). On top of that there is “Labor that is in total chaos, their leader is hated by everyone, and they are clueless if not dangerous to the economy and security” (I could add some more crappy ideas from the usual Liberal idiots, but that should suffice to illustrate my point).

    So, following all such “obvious state of affairs” can anyone explain to the country why is it that the opinion polls keep giving the Liberal party as losers? The latest Essential poll shows a 54% support for the ALP in the 2PP….. Why were they bashed at the last State election in Queensland…. and why their primary vote shrunk significantly at the Bennelong by-election (Bennelong being a solid Conservative seat)?

    Somebody is lying…. and that’s neither the voters nor the respondents to opinion polls.

  16. John Kelly

    Alpo, let’s unpack some of your “claims” above. Firstly, no one believes Turnbull’s bluff and bluster about anything anymore. The people are no longer influenced by media propaganda. The more the Liberal machine tries to discredit Labor, the more they are seen to be hiding behind their own weaknesses, of which there are many. We all know who is telling lies, which is clearly reflected in the polls.

  17. John Kelly

    Phil, I don’t believe Turnbull hates all Australians. In some ways I feel sorry for the man. He is clearly in the wrong party, he suffers from the position he, himself, created and thus cannot be the person he wants to be. He is, by a huge margin, the most compromised PM we have ever had, ruled by a small group of “not faceless” men to whom he has sold his soul. Had he accepted Kim Beazley’s invitation to join the Labor party, he might well have been PM today in a different party.

  18. Glenn Barry

    @John Kelly – I am definitely not a spokesperson for the AIMN readership and not going to appoint myself to the position either, however I believe you’ll find an almost unanimous loathing and lack of sympathy for Turnbull on THEAIMN, and elsewhere in the electorate.

    Personally I find Turnbull untrustworthy, unprincipled and mealy mouthed – his performance on Insiders this morning was a stunning example.

    As for principles, Turnbull never had any, because by definition they are fundamental, which with Turnbull, they are not

  19. John Kelly

    Glen Barry, you are right on all points, except I don’t loathe him. Actually, I like him and that’s probably why I feel sorry for him. He could have been a great Labor PM, where he would not have needed to compromise everything he believes in, to get the job. On Insiders, this morning, he displayed every loathsome quality he possesses and Cassidy, weak as he was, exposed him sufficiently enough for the viewers of that program to see. All of that notwithstanding, he is a pathetic sight in his present role and the tragedy of that is, he could be so much better.

  20. helvityni

    …I was pleased that Cassidy was not too matey with him. I thought he was actually quite firm with Turnbull, who of course did not like any questions asked , I found him quite rude/arrogant with his talking over the interviewer…

  21. Glenn Barry

    @John Kelly – I applaud your continued generosity of spirit towards Turnbull, I suppose my sentiment towards Turnbull would be less vehement if he would just make like a tree and leave and take his mates with him, he’s out of time, I’m out of patience so he’s out of chances

  22. Christopher

    Thank you John for responding to comments. It’s needed here as we can’t tell whether anyone reads what we say

  23. John Kelly

    Christopher, be assured EVERY comment is read. But, I take your point. No one wants their comments ignored or not seen to be valued. Receiving feedback is a vital part of connecting with our readers and every comment is considered important, whether we agree with it or not. I generally only respond if a question has been asked or something is said that is impossible to let slide, or someone has prompted a particular point that I have missed.

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