Before I get onto the next article, I want to take a moment to talk about Tuesday’s Federal Budget. It is almost certainly going to be a big spending budget. Leaked snippets indicate that it’ll also include some rather useful forward estimates for GDP growth, wages & inflation...
The Coalition’s Budgets since 2013 have included the following three forecasts every time:
* strong GDP growth
* stronger wages growth
* stable inflation.
In other words, a growing economy, rising real wages, and rising standards of living...
This has turned out to be untrue every. Single. Time.
The reason they do it is that it allows them to also forecast a reduction in the deficit - maybe even a budget surplus - at some future point.
It’s like saying: I can spend more now because I’ve been promised a pay rise.
Except, year after year, the GDP growth isn’t as good as predicted, and wages don’t grow - the pay rise never eventuates. Workers - blue collar workers, service workers, minimum wage workers in particular - have gone backwards instead.
It should come as no surprise when Treasurer Frydenberg trots out these forecasts next week with the surety of Lucy holding the football for Charlie Brown. It will be, once again, a mistake to believe the figures presented.
In particular, keep an eye out for the siren song of strong growth and tax cuts. "Putting money back into the hands of ordinary Australians”, whoever they are. [Hint: they don’t exist.]
What we need is to see those gains - if they eventuate - back into public services.
We need to see increased investment in public schools, public hospitals, publicly-run aged care facilities. Into mental health, dental health, and childcare services. Into good telecommunications infrastructure for regional Australia, and reliable mobile & internet coverage.
We need to see an increase to the social benefits that support people out of work, reliant on disability services, and the elderly, to move them out of poverty and provide a dignified quality of life.
We need to invest in public housing and tackle the root causes of the crisis in housing affordability, to move people out of rental distress and off the streets.
And threaded through it all we need to see a conscious effort - at every turn - to reduce our carbon emissions significantly and put us on a path towards a carbon-free economy.
Then, and only then, should we be thinking about tax cuts for business owners and the wealthy.
For nine years this government has personified a set of bad priorities that we need to reject vehemently, and begin the process of redress. Australia is a wealthy country with a government hell-bent on distributing that wealth to the very few. We need to change that, now.
I don’t want that to seem like an exhaustive list, although it is long. There is still the gender pay gap that sees women end their careers with lower salaries, lower retirement incomes and less chance to contribute through their work.
We need to act on the position of Aboriginal and Torres Strait islanders in this country and take up their offer of a path to reconciliation as embodied in the Uluru Statement from the Heart.
The list goes on. Unfortunately, our money is being spent instead on wasteful and unnecessary things - like tanks and ships and dams that won’t help…
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Welcome to another week and this one is all about the Federal Budget, which will be handed down tomorrow night. Let’s have a quick look at what we can expect from the Coalition government in this one...
1. Self-congratulation: expect the Coalition to take credit for just about every good piece of data the economy has to offer. (They can’t, and shouldn’t, but they will anyway.)
2. Deflection: Anything bad going on will be attributed to the pandemic, recent flooding, and the Russian invasion of Ukraine. It won’t be that we weren’t prepared for those things; didn’t respond well; or that things weren’t great beforehand.
Taylor’s office spent $1 billion on ‘sham’ carbon projects
[The reason I’m going to harp on about this is because next week’s Budget will contain more money for shit projects.]
"Analysis by a former chair of the government’s carbon pricing integrity committee shows almost all the money spent on emissions reduction has gone to projects that did not contribute to reductions."
[Minister Taylor is just one of a number of cabinet members who don’t seem to know how to do the basics of their portfolio. Whether it’s Colbeck not caring about the Aged, or Joyce not grasping infrastructure, they’ll all of a type.]
One of the things that should be obvious is that action on climate change is a mainstream, central issue - the need for action, and the nature of that action, and the speed of that action - should be a discussion that brings us together in common cause...
Instead, it used by the political parties - primarily the Coalition and the Greens - as a political tool to create division. You can see the centrist forces backing climate action within the many Voices of independent candidates. Life-long, small l liberals who want action.
These people aren’t being spoken to by the larger parties. They’re being called radicals by the coalition; and not activist enough by the Greens. Labor is silent for fear of getting caught in the cross-fire.
"Following revelations the Morrison government pressured AGL to sack its last chief executive, energy companies have increasingly isolated Angus Taylor.”
"This is a story about trust. More specifically, it is a story about just how little trust the major energy companies have for Angus Taylor and the rest of the Morrison government."
We’ve had a few important pieces of economic data released recently and it’s worth just walking through them:
* GDP growth is up, with economic activity increasing by 3.4% in the Dec quarter;
* CPI increased by 1.3% in the Dec Quarter;
* Wages grew by 0.7% in the Dec quarter
* Company profits rose 2% (nearly triple the growth in wages)
* Property prices grew 22% nationally in 2021
* The ASX increased in value 13.6%
* The average rent in Australia increased 7.6%
Despite relatively low unemployment (4.2%) wage earners and renters in Australia went backwards in 2021. Rents rose; prices rose; and wages didn't come close to keeping pace.
But company profits did. And house prices did. And the sharemarket did.
OK, so let’s take a quick look at today’s CPI figures, and they’re not great numbers. But first, some context around the CPI, why it's of interest, and what today's numbers mean (and don't mean but will try to be blamed on anyway)...
1. Let's start with some context. CPI - Consumer Price Index - is an economic measure that gives us some sense for how quickly prices are going up. The ABS looks at a 'basket' of standard household goods* and tracks their price on a regular basis.
CPI jumps around somewhat, and it can be distorted by the movements of specific goods in response to global events. These can have short-term influences over CPI, which the ABS tends to smooth out of the index. There are methodological questions about what's in that 'basket'...