Title: Stop complaining, our economy's in fine form
Post by Equitist on Jun 26th, 2011 at 12:32pm
Hmmnnn...interesting.... http://www.theaustralian.com.au/news/opinion/stop-complaining-our-economys-in-fine-form/story-e6frg6zo-1226081585121Quote:Stop complaining, our economy's in fine form
* George Megalogenis
* From: The Australian
* June 25, 2011 12:00AM
THE most futile conversation in Australian politics involves telling people that living standards are rising. The moment a prime minister makes such a claim, as John Howard did in 2007, the other side cries that the government has lost touch.
Leaders hear their people complain and write another blank cheque
Yet the nation today is stronger than it was when Howard supposedly made a gaffe when he said "working families in Australia have never been better off".
Let's pretend that all opinion polling ceased for a fortnight, and Julia Gillard and Tony Abbott had to debate the following numbers from the real world.
In the past four years, the Australian economy has created 880,000 jobs, 430,000 full time and 450,000 part time. In that period, which includes the last global financial crisis, our labour force has grown by one million people. The gap between jobs gained and jobs sought -- minus 120,000 -- was added to the existing pool of unemployed. Real wages are 2.2 per cent higher, which may not seem much across four years, but productivity is falling, so people are getting ahead without raising an extra sweat.
Are we better off? Certainly. But a reform-minded Abbott might worry about weak productivity and the unusually large number of part-time jobs, and argue, perhaps, for labour market reform. The government might reply it's time for some serious tax reform, using a carbon tax as a springboard to pursue wider workforce participation. It also might step up its push to restore public spending for education.
These are prosperity debates that would more accurately reflect Australia's opportunity.
But Labor-leaning columnists would shout "Work Choices" and conservative columnists would start pulling out their calculators to find out which household got the smallest tax cut or which private school was short-changed.
There is another dataset from the real world that is not as encouraging as the big picture on jobs and real wages. Real house prices have been flat or falling in four of the eight capital cities since 2007. They have dropped by 12 per cent in Perth and risen by just 1 per cent in Brisbane, 5 per cent in Hobart and 6 per cent in Sydney.
But homeowners in the other four -- Melbourne (up 31 per cent), Darwin (28 per cent), Adelaide (18 per cent) and Canberra (16 per cent) -- have nothing to complain about.
To the trained political eye, the tepid property markets of Brisbane and Perth explain why Labor lost its majority at the last election in Queensland and Western Australia, while Melbourne's boom explains why Labor picked up seats in Victoria.
To the trained economist, the national interest would be served if household income continued to grow faster than house prices for the next five or even 10 years. That would, other things being equal, take care of Gillard's government, and make Abbott a oncer as prime minister.
Nothing that has happened in the local economy this year explains the escalation of anger in federal parliament. If anything, the more recent data on jobs points to an Australia that is closer in spirit to that of 2004 when governments found re-election easier. Back then, the property market had stalled, but the unemployment rate was about to fall below 5 per cent for the first time since the early 1970s.
Now some perspective from the rest of the world. In the US, there are 6.1 million fewer jobs than there were in 2007. The number of unemployed is 7.1 million higher and the unemployment rate has more than doubled from 4.4 per cent to 9.1 per cent. Our unemployment rate, by the way, moved from 4.3 per cent to 4.9 per cent in the same period.
Here's another way of placing Australia's performance in context. The Americans have shed 4 per cent of their total jobs in four years, which is by any measure a deep recession. Australia has increased its total number of jobs by 8 per cent.
In 2007, 69.9 per cent of US men and 56.6 per cent of women were employed. The equivalent figures in Australia were 69.7 per cent and 55.4 per cent. In other words, our men were as employable as theirs, while our women were a little less so, before the global economy crashed.
Today, the US male is at 63.9 per cent and the female at 53.3 per cent. This is the sharp end of the American jobs crisis -- more than one-third of its men and almost half its women are not pulling a regular wage.
In Australia, the male employment rate is a still healthy 69 per cent (down 0.7 percentage points since 2007) and the female employment rate is 0.5 points higher at 55.9 per cent. Australia has never been this much better off than the rest of the world before, yet we still complain.
Another global financial crisis is under way thanks to Greece's inability to do simple things such as convincing its people to stop cheating on their tax. The sovereign debt crisis may not end in a deep recession, or even spread from Greece to Portugal, Ireland or Spain. It may not even slow the global economy this year.
But it should remind Australia's political class what real civil strife looks like. Our pro and anti-carbon tax rallies are line-dancing competitions... |
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