Reserve Bank of Australia raises the interest rate yet again - promising more of the same in coming months. Recession worries begin to emerge

 

On the 7 February 2023 the Reserve Bank of Australia (RBA) increased the official cash rate by 0.25%. The current official cash rate as determined the RBA is now 3.35%.

As we reach the ninth official cash rate rise since 4 May 2022, the Reserve Bank Governor’s words set out below are less and less reassuring.

According to the Australian Stock Exchange (ASX) RBA Rate Tracker:

As at 8 February, the ASX 30 Day Interbank Cash Rate Futures March 2023 contract was trading at 96.525, indicating a 65% expectation of an interest rate increase to 3.60% at the next RBA Board meeting.

The next RBA Board meeting and Official Cash Rate announcement will be on the 7th March 2023.

Reserve Bank of Australia

Media Release

Statement by Philip Lowe, Governor: Monetary Policy Decision

Number 2023-04

Date 7 February 2023

At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 3.35 per cent. It also increased the interest rate on Exchange Settlement balances by 25 basis points to 3.25 per cent.

Global inflation remains very high. It is, however, moderating in response to lower energy prices, the resolution of supply-chain problems and the tightening of monetary policy. It will be some time, though, before inflation is back to target rates. The outlook for the global economy remains subdued, with below average growth expected this year and next.

In Australia, CPI inflation over the year to the December quarter was 7.8 per cent, the highest since 1990. In underlying terms, inflation was 6.9 per cent, which was higher than expected. Global factors explain much of this high inflation, but strong domestic demand is adding to the inflationary pressures in a number of areas of the economy.

Inflation is expected to decline this year due to both global factors and slower growth in domestic demand. The central forecast is for CPI inflation to decline to 4¾ per cent this year and to around 3 per cent by mid-2025. Medium-term inflation expectations remain well anchored, and it is important that this remains the case.

The Australian economy grew strongly over 2022. The central forecast is little changed from three months ago, with GDP growth expected to slow to around 1½ per cent over 2023 and 2024. The recovery in spending on services following the lifting of COVID restrictions has largely run its course and the tighter financial conditions will constrain spending more broadly.

The labour market remains very tight. The unemployment rate has been steady at around 3½ per cent over recent months, the lowest rate since 1974. Job vacancies and job ads are both at very high levels, but have declined a little recently. Many firms continue to experience difficulty hiring workers, although some report a recent easing in labour shortages. As economic growth slows, unemployment is expected to increase. The central forecast is for the unemployment rate to increase to 3¾ per cent by the end of this year and 4½ per cent by mid-2025.

Wages growth is continuing to pick up from the low rates of recent years and a further pick-up is expected due to the tight labour market and higher inflation. Given the importance of avoiding a prices-wages spiral, the Board will continue to pay close attention to both the evolution of labour costs and the price-setting behaviour of firms in the period ahead.

The Board recognises that monetary policy operates with a lag and that the full effect of the cumulative increase in interest rates is yet to be felt in mortgage payments. There is uncertainty around the timing and extent of the expected slowdown in household spending. Some households have substantial savings buffers, but others are experiencing a painful squeeze on their budgets due to higher interest rates and the increase in the cost of living. Household balance sheets are also being affected by the decline in housing prices. Another source of uncertainty is how the global economy responds to the large and rapid increase in interest rates around the world. These uncertainties mean that there are a range of potential scenarios for the Australian economy.

The Board’s priority is to return inflation to target. High inflation makes life difficult for people and damages the functioning of the economy. And if high inflation were to become entrenched in people’s expectations, it would be very costly to reduce later. The Board is seeking to return inflation to the 2–3 per cent range while keeping the economy on an even keel, but the path to achieving a soft landing remains a narrow one.

The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary. In assessing how much further interest rates need to increase, the Board will be paying close attention to developments in the global economy, trends in household spending and the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.

[my yellow highlighting]

The Sydney Morning Herald, 9 February 2023: 

There is a better than 50-50 chance Australia could fall into recession due to the Reserve Bank’s aggressive increases in interest rates, economists believe, as a growing group of Labor MPs suggest the seven-year term of RBA governor Philip Lowe should not be extended. 

Macroeconomics Advisory chief economist Stephen Anthony said the chance of a recession next year could be as high as 70 per cent due to the impact of the RBA’s high interest rates, coupled with a slowdown in key markets such as China.

Pressure on Lowe has intensified after the RBA pushed interest rates to a 10-year high this week and signalling more than one further increase in coming months. Lowe, whose seven-year term ends on September 17, had signalled in late 2021 that rates would remain on hold until 2024. 

The previous two governors, Glenn Stevens and Ian Macfarlane, both had their terms extended by three years. But with a sweeping review of the central bank due to be finalised and handed to Treasurer Jim Chalmers in late March, there is a growing expectation that Lowe will not stay on beyond September. 

Within the government, there are now open questions about Lowe’s long-term tenure at the bank.....

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.

Another Honest Australian Government Ad

https://youtu.be/8qj83LE2Mpw

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

Cartoons of the Week

Cathy Wilcox

Wes Mountain

Graeme MacKay

How will up to 7.2 million Australians respond to Scott Morrison's willingness to abandon them in the worst global recession since the Great Depression

"Fiscal measures will need to be scaled up if the stoppages to economic activity are persistent, or the pickup in activity as restrictions are lifted is too weak."  [IMF WORLD ECONOMIC OUTLOOK: THE GREAT LOCKDOWN, April 2020] 

Brisbane Times, 15 May 2020:

Something has changed in the Liberal Party since John Howard was prime minister. Key business lobbies now have such a grip they can frogmarch the government towards political suicide.

It is only weeks since a million Australians lost their jobs by government decree to protect us all from a health crisis. Most are yet to receive their first benefits, but the government has said the guiding principles on the way out will be self-reliance and personal responsibility.

The Prime Minister and the Treasurer have moved in recent weeks to flag that the JobSeeker and JobKeeper programs are a short-term aberration and will be returning to their traditional small-government, competitive-individualism philosophy.

‘‘Open markets will be central ... not government,’’ declared the Treasurer on Tuesday. ‘‘The values and principles that have guided us in the past ... encouraging personal responsibility, maximising personal choice, rewarding effort and risk-taking’’ will be central.

It is hard to imagine a more tone-deaf piece of communication to the hundreds of thousands of Australians who are now gripped by sleepless nights about where their next job is going to come from and whether they will lose their houses.

Social movement research has found that you only need 2.5 per cent of people to be in a political movement for it to be large enough to drive major political and social reform. That is enough for everyone to have friends and family involved and to feel personally connected to the issue.

Almost every Australian will have someone they love who has lost a job in the past six weeks. Telling people they are on their own has to be pretty much at the top of the "what not to do list" in the political leadership manual. Yet Scott Morrison is not an idiot or an ideologue, so why is he doing it?

Even if the government was privately planning this approach, you wouldn’t expect the Prime Minister to say it publicly. The announcements suggest he is having to quell his own political storm and there is a pile-on going on behind the scenes. It is the wrong message for most Australians, but it is the right message for those who dictate his grip on power.

Some of it will be the same Coalition ideologues cum powerbrokers who are worried the pandemic response is a symbolic loss. These tribal warriors are not going to let the fact the country is in the grip of an unfolding catastrophe distract them from the red team-blue team contest.

However, they are not the only force in play. Leaders of our largest businesses are embracing the maxim "Don’t waste a good crisis". They are circling the carcass of the not-yet-cold COVID economy, and seeking to take the opportunity to drive through some long-sought-after tax cuts and industrial relations reform.....

One has to wonder how Prime Minister Scott Morrison and Treasurer Josh Frydenberg came to believe that the 1. 7 million people expected to be unemployed by September 2020 will fare well going into the worst recession since the Great Depression where the unemployment rate is predicted to be 13 per cent for starters. 

Or why he believes the up to 5.5 million workers, hanging onto insecure jobs which are only guaranteed for as long as businesses are receiving government wage subsidies for their workers, will all keep those jobs when the subsidy ends on 27 September 2020.

This is the changed reality that the Liberal & National parties must face:

The Sydney Morning Herald, 14 May 2020

If Scott Morrison continues down this track, what will Christmas look like?

From an Australian prime minister who has never taken a paycut for the last thirteen years comes this callous move....

Prime Minister & Liberal MP for Cook Scott John Morrison (pictured left) is on a reputed annual salary in excess of $549,229 - plus free, staffed accommodation & other perks. 

He who has been in a top percentile income category for at least the last 13 years, has decided it is time to renew his personal, prosperity doctrine-driven, war on the poor and vulnerable.

By 24 September 2020 approximately 1.75 million Australians between the ages of 15 to 64 years will be reduced to living on between $18 to $40 a day if single or $72 a day if a couple.

The Sydney Morning Herald, 8 May 2020:

Hundreds of thousands of unemployed Australians face a huge cut in their incomes just before Christmas as the Morrison government prepares to wind back income support despite warnings from the Reserve Bank the economy will not return to its pre-coronavirus size until 2022. 

Prime Minister Scott Morrison on Friday stood by the government's plans to phase out the coronavirus supplement for JobSeeker recipients and the JobKeeper program from mid-September, saying they came at a significant cost that would have to be borne by future generations.

The Reserve Bank of Australia, releasing its first major economic forecasts since the advent of the coronavirus pandemic, expects unemployment to reach 10 per cent in the June quarter and recede only slightly to 9 per cent by the end of the year. 

It forecast the jobless rate, which was at 5.2 per cent in March, to still be at 6.5 per cent by the middle of 2022, saying unemployment will not fall quickly....

Scott Morrison delivers - but it is not good economic news

This was then Australian Treasurer Scott Morrison in 2016 with blunt warning about a future recession and dip in living standards..... 

The Sydney Morning Herald, 25 August 2016: 

A generation of Australians has never known a recession or high unemployment but unless hard decisions are taken soon, there is a "terrible risk" complacency could end Australia's 25 consecutive years of economic growth, Treasurer Scott Morrison has warned. 

In the first of three "economic headland" speeches the Treasurer will deliver in the coming weeks, designed to set out the budgetary challenges facing the nation - and the government's vision for how to tackle them - Mr Morrison will argue that it should not take an economic crisis to trigger a wake-up call, or restart the economic reform process, so that Australia enjoys a prosperous future. 

In extracts of the speech seen by Fairfax Media, which will be delivered in Sydney on Thursday, Mr Morrison made a simple plea. 

"I do not want my kids to know what a recession is and everything that goes along with that," he will say. 

"I recognise that in the absence of a 'recession we have to have', or the threat of 'becoming a banana republic', achieving necessary change will be more frustrating and more difficult. 

But it is no less necessary, and achieving it this way is far better than the alternative."  

In addition, Mr Morrison will say that on the current settings, a generation of Australians are likely to never pay tax, setting up a new divide - the "taxed and taxed-nots", prompting the Treasurer to ask: "Are we still up to the challenge of doing what we need to do to ensure another 25 years of consecutive economic growth? 

"Do we really appreciate how quickly our economic success can turn, and are we as prepared as we can be to deal with it ... my greatest concern is that we end up answering these questions the hard way." 

This is Australian Prime Minister Scott Morrison in 2019 delivering a fall in living standards and what looks like the beginning of that recession.....

The Australian, 4 September 2019:

The Prime Minister said on Tuesday that the GDP figures would show that Australia is still doing better than many other developed economies.....

“Today’s growth figures will show over the year a softness … what we will see is that in a tough climate we are actually battling away quite well.

The Guardian, 4 September 2019:

Today the government has been madly attempting to spin the GDP figures as good. So let’s cut straight to the point – the figures are terrible and are among the worst we have seen this century. 

But what makes it worse is this government would have us believe they saw them coming. 

How bad are things? Today’s figures show the worst annual economic growth for 18 years. GDP per capita is now lower than it was a year ago, productivity is plunging and the economy is pretty much staying above water purely because of government spending and a drop in imports due to weak investment and household spending. 

And yet these are the figures the treasurer, Josh Frydenberg, would have us believe are evidence of the “resilience of the Australian economy” and which the prime minister, Scott Morrison, said would “come as no surprise to me”. 

If this is how bad things get when the government says it is not being surprised, God help us if they ever get a shock. 

 That trend growth figure is the worst since March 2001. 

We have now had four consecutive quarters of trend growth below 0.5% – that hasn’t happened since the 1990s recession nearly 30 years ago. It is also the first time since the GFC that GDP per capita is lower than it was a year ago.... 

It was little wonder, in his press conference announcing the figures, that the treasurer quickly turned to talking about employment growth compared with the rest of the OECD, because there is not much to boast about on the whole economy side of things. 

Current growth has us in the bottom half of the OECD..... 

The figures also showed, despite the treasurer’s protestations, that living standards are continuing to decline. 

The treasurer suggested that “living standards continue to increase with real net national disposable income per capita rising 1% to be 2.7% higher through the year”. 

But that figure includes all income – both profits and wages. As such, when profits grow strongly due to big increases in export prices, then national income rises. But unless that flows through to households via wages growth, it is pretty meaningless to use it when talking about living standards. 

And we know that the big increase in income is coming from profits – primarily from the mining sector – and it is not flowing through to households. 

When we look at household disposable income we see that it fell not just in the June quarter but over the past year – down more than 1%. Household incomes per capita are currently at the same level they were in real terms in 2010. 

Today’s figures released by the ABS show the economy grew by 0.5% in the June quarter in seasonally adjusted terms and 0.4% in trend terms. Through the year the growth was a truly pathetic 1.4% seasonally adjusted and 1.5% in trend terms. 

Households of course know their living standards are falling, because they are showing it in how they spend their money. In the past year household consumption grew just 1.5% – again the worst result since the GFC..... 

But the treasurer, despite his talking up the figures, knows just how bad they actually are. He even noted that while profits in the mining sector rose 10.6% in the June quarter, in the non-mining sector they “actually fell 0.6%”. 

Because profits in the mining sector have grown so strongly and compensation to employees is growing so weakly, the share of national income going to workers has plunged. 

The last time the share of national income going to workers was this low, the Beatles had just toured Australia.....

Read the full article here.

The Sydney Morning Herald, 6 September 2019: 

“The crisis,” the [Reserve Bank] governor announced at a conference in 2017, “is really in real wage growth.”......

Instead of wages rising at more than 3 per cent a year, as they had in the five years to 2013, the average pay rise since has fallen to 2.2 per cent annually. 

After inflation, the average pay rise has been a scant 0.5 per cent.....

...without higher wages to pay for people’s groceries, medical care, homes and holidays, spending is weak and the economy enfeebled. 

Lowe has urged governments, state and federal, to lead the way, breaking their 2.5 per cent annual limits and paying workers more.

Then there is this headline demonstrating the folly of Liberal-National ideology......

Former failed advertising executive and Institute of Public Affairs adherent Scott Morrison clearly missing the point entirely.

Morrison, McCormack, Frydenberg & Co are hugging their projected budget surplus so tightly they are strangling the national economy.