Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts

Monday, 12 October 2020

Morrison Government ignores the "Pink Recession" in Budget 2020-21

 

"Women drive on roads. They will benefit from our infrastructure spend" [in Budget 2020-21]. [Senator Michaelia Cash, Channel 10 clip in The Project program, 8 October 2020]


The Guardian, 8 October 2020:


The prime minister, Scott Morrison, is angry with women. Not all of us, just those making a fuss about the woeful lack of attention to women’s workforce participation, economic security and safety in the budget his treasurer handed down on Tuesday night.


After early childhood education advocate and journalist Georgie Dent published an article in Women’s Agenda pointing out that the biggest-spending budget in history had allocated roughly a third of 1% of its funds for women’s economic security (citing a figure I tweeted from the Per Capita account during the budget presentation on Tuesday night), she received a call from the PM’s office to complain that “no one credible” was making such a complaint, and that “nothing in the budget is gendered”.


To quote one famous working woman: big mistake. Big. Huge.


Within a couple of hours, the hashtag #CredibleWomen was born, and soon trending in Australia. Twenty-four hours later, more than 1,000 very angry, and highly credible, women and men had joined the fray, including prominent journalists and commentators, business leaders, former federal politicians, economists and sociologists, and even the family members of former prime ministers, both Labor and Liberal. So much for no one credible.


As for the claim that nothing in the budget was gendered – that’s the point. Proudly declaring that no gender analysis was done on the budget reveals a disturbing ignorance of the inherent bias in our economic system, and a fundamental confusion between the concepts of equality and equity. A budget that treats everyone equally, ignoring the fact that women start from a place of significant disadvantage on almost every meaningful economic measure, simply entrenches gender inequality and, in light of the disproportionate impact of the current recession on women, actually risks sending us backwards.


The fact is, the Covid-19 pandemic and subsequent economic collapse have hit women particularly hard. While previous recessions were typified by declining aggregate demand for manufactured goods and services, the current downturn is marked by a partial or total shutdown of many service industries, which are dominated by female workers.


Social distancing restrictions have resulted in an unparalleled collapse in demand, which has had an immediate impact on sectors of the market unused to bearing the brunt of economic shocks, with widespread jobs losses in retail, entertainment and hospitality. Universities, too, are shedding jobs at an alarming rate, and many of the jobs in research, teaching and administration that have been lost will not return even if and when international students do.


As a result, unemployment for women in this Covid-induced economic collapse is double that of the 1990s recession. While women suffered roughly 25% of all job losses in the early 1990s, they account for more than 50% of the newly unemployed today.


A budget that treats everyone equally ... simply entrenches gender inequality”


Yet the Morrison government seems to have failed to come to grips with the different nature of this recession compared to previous downturns, or to have grasped the significant changes in our labour market over the three decades since Australia last faced the task of rebuilding a shattered economy. The budget released on Tuesday night was a fine plan for recovery from the recession of the early 1990s, but not so much for the one we face today…..


The full article can be read here.


BACKGROUND


According to Australian Bureau of Statistics (ABS) Labor Force original data, in December 2019 before the COVID-19 pandemic had entered the country, the female workforce participation rate was 61.6 per cent and total number of unemployed females was 295,100 individuals.


A Parliamentary Budget Report found that 56 per cent of those unemployed females were women aged 45 years and older.


By end of August 2020 the female workforce participation rate was 59.7 per cent - a 3 per cent participation fall. While the unemployment figure had grown to 418,600 females of working force age – a 29 per cent increase in unemployment.


In December 2019 the male workforce participation rate was 71.4 per cent and the total number of unemployed males was 371,600 individuals.


Of these unemployed males 45 per cent were men aged 45 years and older.


By end of August 2020 male workforce participation rate was 69.4 per cent a 3 per cent  participation fall. While the unemployment figure has risen to 503,000 males of working force age - a 26 per cent increase in unemployment. 


Comparing total females and males who considered themselves underemployed between December 2019 and August 2020:


  • Underemployed females totalled 690,200 workers in December 2019 and 753,200 workers in August 2020 - an est. 9 per cent increase in underemployment over the 9 month period; and
  • Underemployed males totalled 503,000 workers in December 2019 and 723,300 workers in August 2020 - an est. 31 per cent increase in underemployment.

Females in employment worked a combined total of 736,643,500 hours in December 2019 and a total of 702,547,200 hours in August 2020 - an est. 5 per cent fall in hours worked. 


Males in employment worked a combined total of 1,044,184,200 hours in December 2019 and a total of 980,844,400 hours in August 2020 - an est. 6 per cent fall.


When breaking that down further by looking at the percentage of females who had between 35-44 hours paid work a week it was 32.1% of all employed females, with another 19.8 per cent working less than 20 hours. While for males receiving 34-44 hours of paid work a week it was 42.1 per cent of all employed males, with another 11.1 per cent working under 20 hours a week.


Overall since the impact of the COVID-19 begun to be felt both males and females experienced swings and roundabouts when it came to employment. 


However, compared with men, over the last decade a higher proportion of unemployed women are now either older women, have a reduced capacity to work, are carers or sole parents. 


While the bottom line is that despite the JobKeeper subsidised wage program, at the end of the last 9 months there are still more females out of work than there are males in the same predicament and more employed females than males with less than a full week's work.


When it came to ABS records for industry sectors with the highest job losses year-to-year it was clear highest losses occurred in sectors with traditionally high female employment levels:


JUNE 2019 to JUNE 2020


Accommodation - jobs down 25.5 per cent

Cafes, restaurants and takeaway food services - jobs down 15.6 per cent

Clubs, pubs, taverns and bars - jobs down 15.6 per cent

Tourism - jobs down 15.1 per cent

Travel agency and information centre services - 17.9 per cent

Retail Trade - jobs down 9.0 per cent.


Tourism jobs peaked at 748,200 in December 2019 and in June 2020 were at the lowest level (611,700) since June 2014. More females work in tourism than males so there were more jobs lost by females with a reduction of 88,100 (-21.5%) jobs compared to a fall of 48,300 (-14.3%) for males.


The Australian Treasury is reportedly predicting that unemployment will remain high for several years, but that it will peak at 8% in the December quarter of 2020. However, indications are that unemployment will not fall below 5 per cent until sometime after 2024.  


It is statistics such as these which have led to political commentators dubbing the current economic recession In Australia, the "pink recession" or "shecession".


Terms with which Scott Morrison appears to take great exception. Women it seems are never to speak up on economic matters unless it is to agree with his world view.


According to Taylor Fry Consulting Actuaries' research, by 29 August 2020 in the Clarence Valley the economic impact of the COVID-19 pandemic was rated "Medium" for most of the valley but at the upper end of "High" was Maclean-Iluka-Yamba which are heavily dependent on tourism.


As it is for Byron Bay where the impact was also rated at the upper limit of "High", while the remainder of the Northern Rivers region was at the lower limit of "High" with the exception of Kyogle and Casino which were rated "Medium".


In 2019 the NSW Northern Rivers region had a resident population of est. 304,325 people with a high number of older residents. In fact at the last Census around 133,332 were aged between 50 and 100 years of age.


In 2020 the Northern New South Wales Local Health District data indicated that females made up 49.22 per cent of the regional population - with est. 30 per cent of that regional population being females of workforce age.


That's an awful lot of Northern Rivers women Scott Morrison & his Cabinet have chosen to brush aside in the worst recession in 30 years.


Wednesday, 30 September 2020

With so many NSW Northern Rivers businesses relying on the JobKeeper wage subsidies to retain staff in the face of loss of trade due to the COVID-19 pandemic the regional economy may decline further now Morrison's JobKeeper cuts start to kick in



The first federal government JobKeeper subsidised wage payments were received by employers in the first week of May 2020 and by 21 July 2020 est. 3.5 million Australians were receiving this payment.

By 22 July 2020 the percentage of NSW Northern Rivers Businesses relying on JobKeeper Payments by Local Government Area were:
Byron 60.39%
Tweed 47.79%
Ballina 39.56%
Clarence Valley 34.52%
Lismore 35.05%
Richmond Valley 27.45%
Kyogle 21.3%

In July the JobKeeper subsidised wage was $1,500 (before tax) per fortnight

The JobKeeper payment rate is now as follows…...


The JobKeeper Payment rate

From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be:
$1,200 per fortnight for all eligible employees who were working in the business or notfor-profit for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average; and
$750 per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be:
$1,000 per fortnight for all eligible employees who were working in the business or notfor-profit for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for business participants who were actively engaged in the business for 20 hours or more per week on average; and
$650 per fortnight for other eligible employees and business participants.

Businesses and not-for-profits will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants).

The Commissioner of Taxation will have discretion to set out alternative tests where an employee or business participant’s hours were not usual during the February and/or June 2020 reference period (the period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility). For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February or June 2020.

Guidance will be provided by the ATO where the employee was paid in non-weekly or non-fortnightly pay periods and in other circumstances the general rules do not cover.

The JobKeeper Payment will continue to be made by the ATO to employers in arrears.

Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper Payment (before tax), based on the payment rate that applies to each employee. This is called the wage condition.


Monday, 7 September 2020

Last Friday Scott Morrison pushed state and territory leaders to urgently ease border restrictions. He had mixed success.


This was Australian Prime Minster & Liberal MP for Cook Scott Morrison on his feet in the House of Representatives on Thursday, 3 September 2020:

“Australia was not meant to be closed. Australia was meant to be open. Australians want to see Australia become open, as the founding members of this place ensured it was from the outset, and Australia must become whole again. This is the way—that's what success looks like…...We need to ensure that we are clear with Australians that we will seek to make Australia whole again by Christmas this year” [Hansard, 3 September 2020, p.6]

The very next day he pushed state and territory leaders to urgently ease border restrictions. 

He had mixed success. West Australia refused to march to Morrison's drum, Tasmania said it would go its own way and the other states and territories agreed to consider coming to an agreement at some time in the coming months. None would consider opening their borders quickly. Nor have they yet agreed with Morrison's national definition of a COVID-19 "hot spot".

When it came to easing restrictions on cross-border travel for agricultural workers, Queensland, West Australia & Tasmania refused to participate in the model Morrison put forward, but agreed to observe how matters play out in the three other states to date which will have committed to participating in that scheme.

In response to the refusal to open borders quickly and refusal to agree to containment of affected populations within a state/territory based on area lockdowns instead of state/territory borders, Morrison informed the premiers and chief ministers that the National Cabinet would no longer be a consensus forum.

This is reportedly being interpreted by the states that he intends to change how the national cabinet operates. A case of 'I'm changing the rules so I don't get rolled' and giving himself permission to publicly attack those states or territories which disagree with him during national cabinet meetings.

Revising recent history, Morrison then told the world that there have been times during this pandemic he feared Australia would "break apart". Perhaps intending to raise fear levels in order to drive the national electorate towards agreement with whatever he has planned in the next few months.

Easing border restrictions is important to 'Scotty From Marketing' because he needs to brag about future increases in trade and consumption ahead of the October budget announcement in order to buttress his claim he has found a way out of the first recession in 29 years.


Because as it now stands the national figures below indicate October budget projections will likely be dismal.

Australian Bureau of Statistics, Australian National Accounts: National Income, Expenditure and Product, Jun 2020, Contribution to GDP growth, seasonally adjusted:

The Gross Domestic Product (GDP) has suffered its worst fall on record, household consumption, private capital formation exports are down, along with a terms of trade increase best described as slight.

While general government consumption is not looking that healthy either and appears an inadequate response in the current situation and, workers share of the national income is at a 61 year low.

The June Quarter 2020 GDP breakdown is:

Graph: ABC News, Stephen Letts







Interestingly, from March 2020 to June 2020 the states and territories showing the smallest falls in seasonally adjusted state final demand (combined consumption expenditure, public & private gross fixed capital formation) were those with the strongest border restrictions.

In other words, community confidence appears relatively higher in those populations behind strong borders.

For some reason Morrison appears to believe that if he bullies state premiers and territory chief ministers into opening borders before community transmission is contained, that any ensuing drawn-out increase in the national number of COVID-19 infections and deaths won't hold the Australian economy back.

He can't make it any clearer that he is willing to sacrifice lives in the mistaken belief that this will improve his own government's 2020 budget projections.

Even though government economic experts in Treasury and the Reserve Bank have on more than one occasion pointed out that stronger economic recovery is possible if faster progress in controlling the virus is achieved in the near term

It is only after faster progress is made in suppressing or eliminating the virus that a faster unwinding of activity restrictions and greater confidence will potentially lead to a faster recovery in consumption, investment and employment. 

A proposition that Morrison seems to find politically unpalatable - he prefers to  trample over the bodies of the coronavirus dead in his pursuit of another term as prime minister.

UPDATE

The verbal attack on Labor states begins on 5 & 6 September 2020 with the Initial Commonwealth response to Victorian Roadmap media release



Sunday, 9 August 2020

Morrison & Co called out for victim blaming


Chief economist at The Australia Institute, Richard Denniss, on the subject of Coalition economic stories........

The Guardian, 5 August 2020:

Australian economic debate relies more heavily on metaphors than it does on evidence, experience or expertise. While the prime minister, treasurer and self-appointed business leaders drone endlessly about what the economy “needs”, they simply refuse to provide any evidence that they know what they are talking about. For decades the inanity of Australia’s economic debate has been concealed behind the sugar hit of surging world demand for our exports, and surging population growth on house prices and retail profits. But in the deepest recession in modern history, the shallowness of Australia’s economic debate is about to become clear for all to see.

Treasurer Josh Frydenberg’s admission last week that his favourite politicians were Margaret Thatcher and Ronald Reagan was as informative as the fact that my favourite Marvel heroes are Thor and Iron Man. Given that Thatcher oversaw burgeoning unemployment and Reagan doubled the US government’s debt, you can see why our current treasurer might have an affinity for his cold war heroes. But for those of us interested in the Morrison government’s actual plans to get us out of the hole we are in, the treasurer’s last big interview told us even less than his recent “mini-budget” did.

According to Frydenberg, Australia’s economy will shrink by a record 7% in the current quarter. To put that into perspective, the entire 1991 recession saw GDP fall by 1.4% and the 1983 recession, which saw four quarters of contraction in a row, saw GDP fall by “only” 3.8%. For the 60 years we have collected quarterly GDP data, the biggest previous quarterly contraction of GDP was back in June 1974, when the economy contracted by 2%. But apart from drawing inspiration from Thatcher and Reagan, what exactly is the government’s plan to create jobs for the almost million people who are already unemployed, let alone for the many more who are predicted to be unemployed by the end of the year?

In March and April, the Morrison government was more enthusiastic about stimulating the economy than many expected but, by July, it had grown tired of its flirtation with Keynesianism. In his mini-budget, Frydenberg simply turned his back on all that economics has to offer and – at the same press conference where he announced the largest ever decline in GDP – he announced his government would be cutting spending in September this year. The consequences of that decision will be disastrous for the economy and, most likely, for the Coalition.

If private demand and investment is falling (it is) and if foreign demand for our exports, including education and tourism, is collapsing (it is), the only thing that can stop GDP spiralling downwards is a big increase in government spending. That’s not ideology or theory, it’s just maths. GDP is the sum of its parts, and if the private-sector parts are shrinking (they are), virtually every economist agrees it’s a good idea for the government to spend more. Morrison and Frydenberg spent the first half of year pretending to understand and accept this most simple of economic tenets but, as of last week, they have clearly decided to put storytelling ahead of solid evidence.

In explaining why they had to cut government spending on unemployment benefits – and in turn cut the amount of money the unemployed spend in their local shops – the prime minister and treasurer dusted off old anecdotes, unsourced, about unemployed people turning down work because life was “easier”. To be clear, there are currently 13 unemployed people for every job vacancy.

The Coalition love to tell stories about what great economic managers they are, despite ABS data suggesting otherwise. But, of course, in Australia the key to being a “great economic manager” isn’t delivering high rates of economic growth or budget surpluses (neither of which the Abbott/Turnbull/Morrison governments have actually done). On the contrary, the key to being a great economic manager is to tell great stories.

Central to the Coalition’s economic narrative is to take credit for everything good that happens in the economy and shift the blame for anything bad. When unemployment is falling, say it’s because your tax cuts are working to “strengthen” the economy. When unemployment is rising, blame the unemployed and say you need to cut unemployment benefits.

The same applies when telling stories about the budget. When times are good, cut taxes for your friends and, when times are tough, cut spending on those who never vote for you. Likewise, with productivity growth, consumer confidence or private investment. If things are looking up, link it to your tax and welfare cuts, and if things are going badly, blame it on union power and lazy workers.

Conservatives have masterfully implemented the old adage to “never let a crisis go to waste” – successfully blaming the victims of Australia’s economic system for all of its failings, while taking credit for managing all of its successes. But they have never had to tell a story about an economy that shrank 7% in a single quarter, driving unemployment to 10%…… 

Unemployment is about to rise, and the economy is not going to “snap back”. Increased training will not create jobs. Cutting unemployment benefits will not create jobs. Industrial relations reform will not create jobs. The reason that companies are shedding staff is that there aren’t enough customers with enough money, or enough confidence, to buy the things that companies sell. The only thing that will pull Australia out of this nosedive is a big increase in government spending, and the government has just announced it plans to cut spending. Strap yourself in – the storytelling is about to go fantastical as the economy goes very, very quiet.

Saturday, 1 August 2020

Quote of the Week



The numbers unveiled by Josh Frydenberg and Mathias Cormann are butt-clenchingly large: a deficit this financial year of at least $184.5 billion that will probably nudge $200 billion by the time of the October budget and its extra spending measures; gross debt that will go through the Morrison government's recently increased limit of $850 billion some time in 2021-22 with no idea how it will be paid down. Frydenberg likened the effort ahead to climbing a mountain. But this ain't no day-trip to Kosciuszko or even a planned assault on Everest. It's more Olympus Mons, the 25-kilometre high mountain on Mars.” [Senior economics correspondent Shane Wright in The Sydney Morning Herald, 24 July 2020,
p.6]

Friday, 31 July 2020

The Morrison Government was advised to get the priorities straight but refused to listen


It appears Scott Morrison & Co did not listen to this open letter. 


Corresponding authors:

Chris Edmond (cedmond@unimelb.edu.au)
Steven Hamilton (steven_hamilton@gwu.edu)
Richard Holden (richard.holden@unsw.edu.au)
Bruce Preston (bruce.preston@unimelb.edu.au)

The views expressed are those of the signatories and not necessarily those of their employer.

19 April 2020

Dear Prime Minister and Members of the National Cabinet:

The undersigned economists have witnessed and participated in the public debate about when to relax social-distancing measures in Australia. Some commentators have expressed the view that there is a trade-off between the public health and economic aspects of the crisis. We, as economists, believe this is a false distinction.

We cannot have a functioning economy unless we first comprehensively address the public health crisis. The measures put in place in Australia, at the border and within the states and territories, have reduced the number of new infections. This has put Australia in an enviable position compared to other countries, and we must not squander that success.

We recognise that the measures taken to date have come at a cost to economic activity and jobs, but believe these are far outweighed by the lives saved and the avoided economic damage due to an unmitigated contagion. We believe that strong fiscal measures are a much better way to offset these economic costs than prematurely loosening restrictions.

As has been foreshadowed in your public remarks, our borders will need to remain under tight control for an extended period. It is vital to keep social-distancing measures in place until the number of infections is very low, our testing capacity is expanded well beyond its already comparatively high level, and widespread contact tracing is available.

A second-wave outbreak would be extremely damaging to the economy, in addition to involving tragic and unnecessary loss of life.

Sincerely,


On the day this open letter was written the number of active confirmed Covid-19 cases in Australia was falling - averaging 42 cases a day in that week. However, nationally there were still est. 2,306 active & not yet recovered cases of the virus and the death toll had reached 70 people.

By 20 April 2020 national infection growth rate - which needed to be below a factor of 1 if Australia wanted to maintain suppression or eliminate the virus - was recorded as 0.89 representing an average of 11 new cases per day for the last 7 days.

By 2 May 2020 active & not yet recovered cases had fallen to 901 but deaths had risen to 93 people. 

That week Prime Minister Scott Morrison began to push for an easing of COVID-19 public health order restrictions.

However by 20 May Australia was averaging 17 cases per day and the infection growth rate was beginning to climb again. 

Even though the national infection growth rate had been above a factor of 1 since early June, the Morrison Government continued to push for a rolling back of public health order restrictions and castigated those states, industry sectors and workers which it thought were not responding quickly enough to its desire to 'open the economy'.

In varying degrees the states and territories complied. The result?

By 3pm on 8 July 2020, there were 1,293 active & not yet recovered cases of COVID-19 in Australia and 106 deaths.

As of 3 pm on 29 July the national number of active & not yet recovered COVID-19 cases stood at est. 5,787 and known deaths from the virus totalled 176 people. That day the Australian Dept. of Health recorded there has been an average of 385 new cases reported each day over the last week.

It is now Friday 31 July 2020 and the resurgence of COVID-19 infection predicted by those 289 economists last April is underway.


Saturday, 25 July 2020

Australia 2020: and now for some economic bad news


On 23 July 2020 Australian Treasurer and Liberal MP for Kooyong Josh Frydenberg delivered a national economic and fiscal update.

He dutifully posted an upbeat media release and published the official update documents.


Here is a preliminary takeaway from this update*:

  • total federal government payments have increased by $58.0 billion in 2019-20 and increased by $187.5 billion over the two years to 2020-21. The net impact of policy decisions since the 2019-20 MYEFO has increased payments by $58.0 billion in 2019-20 and $113.7 billion in 2020-21.
  • declines in taxation receipts were $31.7 billion in 2019-20 and are expected to be $63.9 billion in 2020-21;
  • the underlying cash balance is expected to decrease to an $85.8 billion deficit in 2019-20 and an $184.5 billion deficit in 2020-21. This is a a deterioration of $281.4 billion over these two years since the 2019-20 MYEFO;
  • as a percentage of GDP the underlying cash balance is expected to be -9.7 per cent in 2020-21;
  • debt levels have increased significantly. Gross debt was $546 billion (28.1 per cent of GDP) at 30 June 2019 and $684.3 billion (34.4 per cent of GDP) at 30 June 2020 and is expected to be $851.9 billion (45.0 per cent of GDP) at 30 June 2021. With net debt at 30 June 2019 standing at 373.5 billion (19.2 per cent of GDP), expected to be $488.2 billion (24.6 per cent of GDP) at 30 June 2020 and increase to $677.1 billion (35.7 per cent of GDP) at 30 June 2021;
  • on a calendar-year basis real GDP fell by 3.75 per cent;
  • real GDP is forecast to have fallen sharply in the June quarter 2020 by 7 per cent;
  • nominal GDP is expected to be -4.75 per cent in 2020-21;
  • nationally 709,000 jobs were lost in the June quarter 2020;
  • the unemployment rate in June 2020 was 7.4 per cent and is expected to peak at around 9.25 per cent in the December quarter 2020 and is forecast to be at 8.75 per cent in 2020-21;
  • Treasury has predicted that immigration will fall to 31,000 individuals in 2020-21 which is likely to affect the national budget bottom line; and
  • the Morrison Government's go-to remedy for the poor economic outlook is to (i) consider reducing the federal government's taxation income even further by est. $143 billion in personal income tax receipts over 10 years commencing in 2021-22, (ii) reduce welfare spending by further limiting eligibility and reducing payment levels for JobSeeker and JobKeeper recipients from 25 September 2020 with the Coronavirus Supplement due to be removed completely by 31 December 2020, (iii) incease the level of casual and insecure work via industrial relations 'reform', and (iv) encourage women to have more babies to compensate for the current moribund population growth rate.
NOTE

* The Economic and Fiscal Update June 2020 is affected by the economic impacts of the 2020 COVID-19 pandemic and to a lesser extent by the the impacts of the 2019-20 bushfires. 

Componding the situation is the high level of federal government borrowings which regularly occurred after 18 September 2013.

On 30 September 2013 the gross national debt stood at est. $220.67 billion and net national debt was $174.55 billion. At that time net national debt was in the vicinity of 13% of GDP. 

By 2 April 2019 the Abbott-Turnbull-Morrison Government had raised the gross national debt to $534.42 billion. That's more than double the national debt left by the previous Labor federal government. 

On 2 April 2019 Frydenberg was predicting that gross national debt would rise to $627.26 billion by end of June 2019 with net national debt coming in at $373.47 billion and net debt predicted to come in at 19.2% of GDP by end of June. 

By 30 June 2019 the federal government paid est. $18.15 billion in interest on this debt in the 2018-19 financial year. 

The bottom line is that before either the bushfires or the pandemic even began the Morrison Government gross national debt stood at $546 billion or 28.1 per cent of Australia's GDP and net debt stood at 373.5 billion or 19.2 per cent of GDP by 30 June 2019.

Therefore emergency national funding for bushfires and pandemic only accounts for est. 23.5 per cent of the current national debt.

As at 30 May the Morrison Government's total liabilities in 2020 ran to $1,324.95 billion against assets of $700.74 billion according to Australian Government General Government Sector Monthly Financial Statements May 2020.

Tuesday, 14 July 2020

Patience with Australian Prime Minister Morrison and Treasurer Frydenberg’s ducking and weaving on JobKeeper support beyond September is "wearing mighty thin"


The Monthly, 8 July 2020:

Amid mounting criticism on social media that he’d again gone AWOL during a crisis, Prime Minister Scott Morrison showed his face this afternoon at a well-timed Canberra press conference, in which he killed two birds with one stone. 

As Morrison expressed his manifest sympathy for Victorians returning to lockdown, he also knocked out the broadcast of an unwelcome National Press Club speech by ABC managing director David Anderson. The PM had little to announce – an extra 6105 home-care packages for the elderly at a cost of $326 million – but he was flanked by Aged Care Minister Richard Colbeck, who mouthed all of 180 words (including “Thanks, PM”) and received no questions. The press gallery was mostly interested in the implications of Victoria’s second wave for the federal government’s recovery plans. Morrison suggested there would not be an extension of the JobKeeper program on a geographic basis – just for Victorians, say – making the point that the government would extend support for businesses or industries in need beyond September, and saying, “this is about tailoring a national program to provide support where the support is needed”. The PM also refused to be drawn on reports [$] that the personal income tax cuts slated for 2022–23 might be brought forward to stimulate the economy, saying, “That’s a matter that the treasurer and I will address in the context of the budget, not today”..... 

Millions of Australians are doing it tough. Some are surviving without any income at all, while 2.4 million people have raided [$] their super early, in withdrawals totalling $27 billion. And, with the federal budget heading for a deficit next financial year (which Westpac estimates at $240 billion), it is hard to see how the top economic priority right now is bringing forward income tax cuts that will favour the wealthy. Victoria’s return to lockdown highlights the uncertainty of the situation confronting the federal government as it prepares the July 23 economic statement. But as shadow treasurer Jim Chalmers said at a doorstop interview today, “If the banks can provide some certainty with this announcement, the Morrison Government can too – by releasing their secret report into the JobKeeper payments … We need the government to come clean.” Chalmers expressed support for the idea of bringing income tax cuts forward, saying that the Opposition would “engage with that constructively and responsibly”, adding, “Labor has been calling for that to be considered for some time. The working families of middle Australia need help now, not later.” 

It would be an understatement to say that patience with the PM and treasurer’s ducking and weaving on support beyond September is wearing mighty thin.


Friday, 3 July 2020

Has our dream run over the coronavirus pandemic has come to a sticky end?


Echo NetDaily, June 2020:

Thus Spake Mungo: ahh the Spike


Australia awoke last week to the strains of Spike Milligan’s poignant refrain, ‘I’m walking backwards to Christmas.
It may not be all the way to Christmas, but it could be even further – well into next year, and perhaps beyond that. We don’t know and we can’t tell.
But it is sadly clear that our dream run over the coronavirus pandemic has come to a sticky end. And it has happened on both fronts, the medical and the economic. The cluster of hot spots that emerged from Victoria does not yet constitute the dreaded second wave, but it is worrying, and defies explanation.
For readers of The Australian, of course, it is all too simple: Daniel Andrews unleashed the beast by not clamping down on the Black Lives Matter protests. But hang on – there were protests in other states as well, without clusters emerging, And in any case, not one of the cases in Victoria can be traced to the demonstrations.
So perhaps the problem was that Andrews mismanaged the Cedar Bay abattoir outbreak? Or ignored communicating COVID-19 information to the ethnic communities? One way or another, we have to blame the socialist totalitarian for something.
But apart from the partisan bullshit, the fact that there are clusters at all must serve as a warning, because across other parts, around the world, COVID19 is still raging. It is out of control in Brazil, spreading dangerously in India, working its way through the southern United States and, most disturbingly, making huge inroads in parts of China, where it was thought to have been tamed......
And for the government, the worse news is that the easing of restrictions has not just stalled, but has been reversed in some areas, notably the urgency of opening state boundaries.And despite the predictions of the optimists, we are not yet in reach of a vaccine. This is not good news.
It appears that we are reverting to the old maxim: think globally, act locally. The national cabinet was never much more national than our mish-mash federation, or the constitution that birthed it; it was a useful conceit and helped us muddle through the early emergency, but it was always gesture politics rather than reality....
And now the premiers have declared that it is every state for itself. Some are derestricting like mad, others are more cautious, playing for time. And of course Victoria has gone backwards – even toilet paper is back on the rationing list. This is serious, folks......
And it appears that the other premiers are less than sympathetic. In NSW, Gladys Berejiklian has made it clear that Victorian holidaymakers will not be welcome in her pristine domain – in fact, she has bluntly told them to bugger off.
Australia is still doing fairly well by world standards. Moody’s rating agency and the International Monetary Fund have both offered commendation, ticking us off as one of the best in a fairly miserable bunch.
But the IMF have warned that shutting down the stimulus measures designed to dampen unemployment too abruptly could lead to awful consequences – it has urged caution; a gradual easing, rather than a sudden shut off.
Morrison and Josh Frydenberg seem, reluctantly, to be getting the message. The strictly temporary JobKeeker program, scheduled to end in September, may have to be extended, at least for the most vulnerable sectors of the economy.
And some extra spending is being rolled out; the beleaguered arts are finally getting a boost, although a very minor one, and in the wake of the Qantas stand down, assistance for the airline industry is on the table.
And Morrison is hell-bent on ramping up the nation for business – whatever the consequences. ‘We can’t go “stop, go, stop, go”, we can’t flick the light on and off,’ he insisted, blithely ignoring the fact that this is precisely what he is planning to do with JobKeeker. ‘We’ve got to just keep the focus on keeping the economy open and getting people back into jobs.’ And there is absolutely no need for anxiety about the Victorian outbreak, because ‘we were expecting it.’ Perhaps he was – the rest of us were somewhat taken aback. 
But it is still all about industry and business. Individuals – casual workers in particular – are not considered essential. And of course enemies are still to be punished. The universities, and most of all the ABC, have been singled out for clobbering. Some of us are in this together more than others.
But it’s time to forget about the health crisis – so 2019-2020, We need a new narrative to turn the page into the new financial year. It’s the economy, stupid – and we do mean stupid. Back to Spike Milligan. As the Great Goon might have warbled:
I’ve tried walking backwards
And walking to the front
But all the people stare at me
And ask: who is that silly…’
Yes, quite so. Moving right along…