Albanese Government will implement in full the Fair Work Commission 15% rise in wages for est. 250,000 nurses & direct care workers in aged care sector

 

The Saturday Paper, Post, daily news email, 4 May 2023:

A centrepiece of next week’s budget will be a $11.3bn commitment to raise aged care workers pay by 15%.

What we know:

• During the election, Labor promised to provide a wage increase to aged care workers, and the Fair Work Commission last year decided this should be 15% (SMH).

• After attempting to stagger this increase over two years, Aged Care Minister Anika Wells has confirmed it will be implemented in full from July at a cost of $11.3bn over four years.

• Wells described the pay boost as “historic” and said it would help to address gender pay inequality.

• For a registered nurse the increase will equate to almost $200 a week more, with their annual wage growing to more than $78,000.

• Personal care staff will receive an extra $7300 a year, or $141 a week.

• The federal government also hopes the pay increase will attract workers to the sector and help to meet its election promise of having nurses in aged care homes 24-7.

• Recent reports found that this policy could lead to a shortfall of about 25,000 workers in the next two years.

• Aged care is now the government’s fifth biggest expense with costs jumping by $5bn to $26.9bn this financial year (The Conversation).

• The sector has drawn much criticism, with staff overworked, underpaid and poorly equipped (The Saturday Paper).

Largest superannuation fund dedicated to Australia's health and community services sector calls for proposed legislated Objective of Super to "include a commitment to close the gender super gap to ensure Australia’s retirement system does not entrench inequity".

According to the 2021 Census, more Northern Rivers Region residents worked in health care and social assistance than any other industry. A total of 22,893 people to be exact - of which 17,582 were women.

It is likely that more than a few belong to this industry union.

HESTA CEO Debby Blakey

Super objective must focus on eliminating gender super gap: HESTA

______________________________________________

HESTA

______________________________________________

31 March 2023

HESTA has called for the objective of super to include a commitment to close the gender super gap to ensure Australia’s retirement system does not entrench inequity and that future reforms deliver better outcomes for women and low-income earners.

In its submission to the Federal Government’s consultation on legislating the objective of super, the $70 billion industry super fund strongly supported the proposed wording of the objective. With almost 80% of HESTA members women, the Fund has called for the explanatory materials to the legislation in relation to ‘equity’ to clearly reference the elimination of the gender super gap and the need to avoid entrenching or creating inequity for women, Aboriginal and Torres Strait Islander peoples and those on low incomes.

HESTA CEO Debby Blakey said clarifying the objective in this way could help keep future super reform focused on tackling the structural inequities that prevented women from receiving the full benefits of super.

“HESTA strongly supports the need to enshrine in law an objective of super that focuses on achieving dignity and equity in retirement, and this goes hand in hand with closing the gender super gap,” Ms Blakey said.

“Our super system is world class, but its design continues to disadvantage certain groups, including women, many of whom continue to experience an intolerable level of economic insecurity in retirement.

“Crystallising the legislative objective of super to include eliminating the gender super gap and avoiding further inequity will help ensure future reforms address super’s gender blind spot and make our retirement system fairer for all Australians.”

HESTA’s submission recommends implementing a Gender Superannuation Impact Assessment to evaluate how future reform contributes to eliminating the gender super gap as well as to assess Australia’s progress in this respect. The Fund has also called for ‘dignified retirement’ in the explanatory materials to refer to a retirement that promotes financial security and wellbeing.

The gender super gap remains a significant issue, with factors such as the gender pay gap and career interruptions due to caring responsibilities causing Australian women to still retire on average with around a third less super than men.1

HESTA has long advocated for measures to help close the gender super gap, including paying super on the Commonwealth Parental Leave Pay scheme and the introduction of a super “carer credit” for unpaid parental leave. The Fund has also sought reform to the Low Income Super Tax Offset and other tax concessions to improve equity and fairness in the super system.

“As a priority, we want to see super paid to workers taking paid leave to care for children because this will help make our retirement system fairer for all Australians and take an important step forward in addressing the gender super gap,” Ms Blakey said.

“Unpaid caring work make an enormous difference to our economy and to the health and wellbeing of families. It’s time our super system recognised this important contribution.”

HESTA recommendations on legislating an objective of super

HESTA recommends that:

1. The explanatory materials to the legislation should provide further definitional context to the concept of a “dignified retirement”, being one which promotes “financial security and wellbeing in retirement” through a standard of living that:

• is supported by retirement income sufficiently above the Age Pension (or other government support);

• supports a person’s ability to economically and socially participate in the community; and

• is consistent with community expectations.

2. The explanatory materials to the legislation in relation to “equity” should clarify the importance of promoting workforce and community participation and ensuring superannuation system settings do not entrench or create inequitable outcomes, including for women, low-income earners and Aboriginal and Torres Strait Islander peoples.

3. The explanatory materials to the legislation in relation to “equity” should expressly include the objective to eliminate the gender superannuation gap, so that women fully benefit from our superannuation system.

4. Robust additional accountability mechanisms are enacted, to ensure future superannuation policy changes are properly judged against their compliance with the objective, and there is periodic review of the performance of the system against the objective of superannuation. This should include a “Gender Superannuation Impact Assessment” being conducted, both when new policies are proposed and periodically, to measure progress towards eliminating the gender superannuation gap.

ENDS

[1] KPMG (2021). The Gender Superannuation Gap – addressing the options.

About HESTA

HESTA is the largest superannuation fund dedicated to Australia’s health and community services sector. An industry fund that’s run only to benefit members, HESTA now has more than one million members (around 80% of whom are women) and manages close to $70 billion in assets invested around the world.

 

Cartoons of the Week

 

Megan Herbert

Mark David

Cathy Wilcox

Tweet of the Week

WHO WOULD HAVE THOUGHT that a big part of the reason why prices have gone up so much & wages are kept down is because big business has so much power in our country they can get away with both!!! It seems the RBA is finally saying it out aloud. Price gouging & wage suppression.

— Sally McManus (@sallymcmanus) September 16, 2022

 

Tweets of the Week

The gas industry lobby group APPEA have put some ads on social media boasting about how much tax and royalties the gas industry pay.

Here's what they don't tell you.

Climate & Energy Principal Advisor @MarkOgge explains. #auspol pic.twitter.com/6WFafdobkZ

— Australia Institute (@TheAusInstitute) July 25, 2022

With inflation now running at 6.1% annually & wage growth at only 2.4% we have moved from the era of wage stagnation to the new era of cuts to real wages.

— Josh Bornstein (@JoshBBornstein) July 27, 2022

No matter how Morrison & Co try to spin the Australian Treasury's 2021 Intergenerational Report, it reveals lacklustre economic growth expected over the next 40 years

In June 2021 the Australian Treasurer and Liberal MP for Kooyong, Josh Frydenberg released the Treasury’s 2021 Intergenerational Report: Australia over the next 40 years

Although a traditionally impartial Treasury complied most of the report’s contents, the partisan political nature of this report can be found kicking off at Line 19 of the Executive Summary, which starts with this untruthful statement:

Australia entered the COVID-19 pandemic from a position of economic and fiscal strength. The budget was in balance for the first time in 11 years…..

North Coast Voices readers would be well aware that 2019-20 national budget papers released in April 2019 forecast a then as yet unrealised balanced budget and return to surplus by 30 June 2020, with surpluses continuing over the medium term. This was a risky assertion to make on the basis of optimistic assumptions not hard facts.

Just how risky became apparent soon after February-March 2020 when the word “surplus” was quietly scrubbed from the Liberal-Nationals political lexicon due to the social and economic upheaval caused by both six years of the Abbot-Turnbull-Morrison Government in Canberra and a highly infectious global pandemic.

By June 2020 Australia’s net debt was expected to peak at $392.3 billion and, by June 2021 there was an est. $829 billion in gross public debt and $617.5 billion in net public debt on the books and an underlying cash deficit in the vicinity of $161 billion, with no budgetary surplus on the horizon.

That might almost be considered to qualify as good news given some of the forecasts contained in the 2021 Treasury intergenerational report. Because that report clearly shows that the COVID-19 global pandemic could cease tomorrow and it would make little difference to Australia’s long term economic recovery.

There will be no post-pandemic ‘snapback’ which will see the national economy quickly flourish.

From 2014 to the present day successive federal governments have trashed the goodwill and tolerance of our political allies and trading partners with anti-science, climate change denialist polices, demonstrated a crass clumsiness and sometimes downright ignorance of international relations and, the complete absence of diplomacy in negotiations with our largest trading partner. While increasing impacts from climate change will, more frequently than in the post-climate crisis era, see a fall in the seasonal/annual volume of agricultural products for export.

The domestic industry and business mindset that insists employers are doing workers a favour by employing them on a low wage with no job security, rather than recognising that the worker creates cashflow and profits by producing actual goods to sell, will in all likelihood actively discourage decent wage growth over the next 40 years.

According to the Executive Summary in the 2021 Intergenerational Report:

….real gross domestic product (GDP) is projected to grow at 2.6 per cent per year over the next 40 years, compared with 3.0 per cent over the past 40 years. Real GDP per person is projected to grow at an average annual rate of 1.5 per cent, compared with 1.6 per cent over the past 40 years. Nominal GDP growth is projected to slow to 5.0 per cent per year over the next 40 years, compared with 7.0 per cent over the past 40 years. Real GNI is projected to grow at an average annual rate of 2.3 per cent, compared with 3.3 per cent over the past 40 years. Real GNI per person is projected to grow at an average annual rate of 1.3 per cent, compared with 1.8 per cent over the past 40 years. The larger slowdown in GNI growth than GDP growth reflects an assumption that the terms of trade will decline before stabilising at long-term levels.

Real GDP per person = Gross Domestic Product per person adjusted for inflation
Real GNI per person  = Gross National Income (wages & other earned income)
per person adjusted for inflation
Real GDP = Gross Domestic Product adjusted for inflation
Real GNI = Gross National Income (wages & other earned income)
Nominal GDP =  measures total value of the output produced in Australia, by
adding together Real Gross Domestic Product and prices to produce a close estimate.

Australia's terms of trade is calculated as the ratio of export prices to import prices. If this index increases it implies that Australia is receiving relatively more for its exports; if it decreases then Australia is receiving relatively less. An increase in export prices relative to import prices
implies that Australia is better off; thus an increase in the terms of trade
is sometimes referred to as a favourable movement in the terms of trade. [Australian Parliament House Library, retrieved 07.07.21].


After the 2007-08 Global Financial Crisis (GFC) Australia's terms of trade under Labor federal governments peaked in 2010-11 & 2011-12 at 2.1 before falling to 1.0. Subsequent Coalition federal governments peaked at 1.1 in 2020-21. Australia's terms of trade are predicted to return to the 0.9 of the Global Financial Crisis period and stay at
that level until after 30 June 2061. 



Australian Treasury tables attached to the 2021 Intergenerational Report predict that Average Labour Productivity Levels will remain at 1.5
until after 30 June 2061. This is the same level of average labour productivity between approx. 1981 and 2020.


In those same tables Average Gross National Income per person adjusted for inflation is expected to fall from the current 1.8 to 1.3 for the next 40 years. This does not indicate strong wages growth across the board over the next four decades.


After credibly surviving the 2007-08 Global Financial Crisis under a
Labor federal government, Australia now faces forty years of struggling
to move past social and economic consequences of the current federal Coalition government’s six years of poor policy decisions and its appalling mismanagement of the global COVID-19 pandemic once it became clear the virus would breach our national borders.

Scotty and Josh are riding the superannuation wrecking ball in 2020

 

Josh and Scotty a double act since 2018
IMAGE: The Guardian

Employers are required to fulfil their obligations under the Superannuation Guarantee (Administration) Act 1992 (or under industrial agreements in many cases) to make superannuation contributions on behalf of their employees.

The current statutory rate of employer compulsory superannuation contributions is scheduled to rise incrementally by 10 per cent in 2021 and reach 12 per cent in 2024.

According to the Financial Review on 15 July 2019; Politicians, public servants and academics are among the est. 2 million workers or 18 per cent of all employees who would be unaffected if a scheduled rise in the compulsory Super Guarantee from 9.5 per cent to 10 per cent to 12 per cent did not occur as their existing employer superannuation contribution is already above 12 per cent.

Another est. 300,000 people, or 3 per cent of all employees are not included in the Super Guarantee as they earn less than $450 a month before tax and est. 63 per cent of these workers are female.

Add to this the reportedly 2.2 million employees who do not receive their full super entitlements because their employers unlawfully do not pay all or any employer contributions to eligible workers and, the size of the workforce who might receive a benefit from a 0.5 per cent increase in the Super Guarantee next year has shrunk to est. 8.2 million workers.

Based on full-time average adult weekly earnings in October 2020 an employer’s compulsory superannuation contribution per worker would be est. $651 per month at 9.5% in 2020 and $681 per month at 10% in 2021.

That’s an increase of $30 a month or $7.50 a week next year.

A dollar a day is not going to break either the employer or the worker and, at the end of the 2021-22 financial year there would be an extra $415 in interest payments in that worker's superannuation account – and if that worker has another 30 years before retirement that $415 dollars in interest could represent up to $29,000 more in his/her superannuation account at the end of that time period.

When one considers that an est. 98 per cent of all businesses in Australia employ 20 or less people and as that would only mean an employer contribution increase of $20 or less a day for the vast majority of employers, it is hard to see this as an unreasonable move.

After all, even the Morrison Government admits that superannuation assists middle income earners to smooth their income over their lives, and Without compulsory superannuation, middle income earners would not save enough for retirement.

However, the Abbott-Trunbull- Morrison Government does not fancy 8.2 million workers receiving an extra $30 a month in their super accounts next year.

So Josh Frydenberg is doing a good imitation of Chicken Little and screeching the sky will fall if $1 a day is added to a worker’s superannuation account in 2021. 

He bespoke a study from Treasury to back him up when it comes to not increasing the Super Guarantee this year and moving towards a policy of forcing homeowners on age pensions or retirees with little super to either sell their house or borrow against it in order to fund retirement, so that Scott Morrison can happily continue his personal war on the poor and vulnerable.

Put simply the Morrison Government is arguing that neither workers, their bosses nor the national economy can afford an increase in the amount of money which enters a worker’s superannuation for his/her financial benefit on retirement.

Quite frankly I see no real justification for that stance.

A stance that is also incredibly hypocritical given that by 2007 the Parliamentary Contributory Superannuation Scheme saw newly elected federal parliamentarians receiving government compulsory contributions into their own superannuation accounts at a rate of 15.4 per cent in order to bring superannuation arrangements for parliamentarians in line with current community standards.

The lack of congruence between what federal politicians see as community standards applicable to themselves and community standards as applicable to ordinary workers is so marked that the ordinary voter has begun to notice......

This is Josh. He gets 15.4% super & he can access it as soon as he leaves parliament. You get 9.5%. You have to wait until 67. There is a super guarantee which will raise your super to 12%. Josh wants to stop this. That’s what his sweaty rants are about. Because fuck you. pic.twitter.com/32fuaY2ega

— 🖕🏿🍑💧Rudy Terwilliger (@wolftickler2000) November 23, 2020

 

NSW Berejiklian Coalition Government effectively gets its public sector wage cuts in the middle of a global pandemic

 

An est. 400,000 public sector workers throughout New South Wales, including health workers and teachers in the regions, received a slap in the face this month.

According to the Headnote in NSW Industrial Relations Commission, Application for Crown Employees (Public Sector – Salaries 2020) Award and Other Matters (No 2) [2020], 1 October 2020:

Between 9 March 2020 and 29 May 2020 the Public Service Association and Professional Officers’ Association Amalgamated Union of New South Wales, the New South Wales Nurses and Midwives’ Association, the Health Services Union of New South Wales and the Australian Salaried Medical Officers’ Federation (New South Wales) (collectively, “Applicants”) filed in the Commission a total of 43 applications seeking orders for the making of awards to replace, or to vary, 41 existing awards. In each case the application calls on the Commission to confer on employees covered by the existing or proposed awards an increase of 2.5% to their salaries and salary-related allowances to take effect from the first pay period on or after 1 July 2020…..

A decision not to award any increases for the year commencing 1 July 2020 may see employees under the relevant awards suffer a reduction of 0.3% in their real wages over the two year period to 30 June 2021…..

The evidence, in particular the economic evidence, adduced in the proceedings calls for restraint in the particular circumstances of the current financial year. At the same time, in the exercise of the Commission’s discretion and having regard to all of the economic considerations the Full Bench does not accept that an outcome that would see a decrease in the real earnings of employees would be fair and reasonable.

The Full Bench proposes to make awards and variations to avoid such a reduction, by awarding increases of 0.3%.....

Decision: Determination that salaries and salary-related allowances in the awards the subject of the applications should be increased by 0.3% with effect from the first full pay period on or after 1 July 2020.

In this matter the position of the Berejiklian Government was as follows; The position of the Employers [represented by the NSW Crown Solicitor] can be summarised as contending that the Commission should award no increases to salaries and salary-related allowances, whether by making a new award or varying an existing one. Instead, the Commission should make an award or a variation in respect of each of the Joined Applications which has a nominal term of one year, which awards no increase to salaries and salary-related allowances and contains a no extra claims clause.

What wages growth in the Australian private sector looked like over the last 20 years

It is noticeable that in the Abbott-Turnbull- Morrison Coalition Government years 2014-2020 private sector wages growth slows markedly.

Graphs: The Guardian, 16 August 2020

Reserve Bank of Australia (RBA), Bulletin- June 2019:

The low wages growth in recent years has contributed to a decline in the growth of household disposable income and consumption, and has been associated with a decline in inflation….. government policies have capped wages growth in most public sector EBAs, while delays in renegotiating some EBAs have resulted in a temporary wage freeze.

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?

What Morrison Government's recent changes to industrial relations law may mean for workers

On Thurday 16 April 2020 Australian Attorney-General, Minister for Industrial Relations and Liberal MP for Pearce Christian Porter announced changes to the Fair Work Regulations in relation to the negotiation of workplace agreements. 

According to Fair Work Australia the new regulations are "in place initially for 6 months" and are allegedly meant to assist businesses to remain solvent during the COVID-19 pandemic. 

However, workers are likely to be severely disadvantaged because any changes to working conditions or rates of pay made under these new rules are permanent and can only be altered during the next formal application to vary the enterprise agreement - which can be up to four years away.

Are you on an enterprise agreement? You need to know this. Your employer can now give you 24hours notice to vote to change your agreement. What should you do? pic.twitter.com/ioI3TItgoP

— Sally McManus (@sallymcmanus) April 16, 2020

Australian Prime Minister Morrison gives full amnesty to employers who have stolen all or part of their employees superannuation

Australian Council of Trade Unions (ACTU), media release, 24 February 2020: 

With daily revelations of wage theft dominating the start of the new parliamentary year, the Morrison Government has today passed a bill which will waive penalties for employers who have stolen superannuation from workers. 

The bill protects employers from prosecution by the ATO for any theft of superannuation back to the birth of the system, regardless of the size of the theft or the intent of the employer. 

This is an unprecedented move by a federal government – blanket pardoning of a serious contravention of federal law, with no caveats or limits. 

The Government has said publicly that if employers cannot determine the extent of their theft before the end of the amnesty, it will be extended.

Quotes attributable to ACTU President Michele O’Neil: “We are living through a national crisis of wage theft and superannuation forms a significant part of this issue. Instead of punishing the employers who have been stealing money from their employees, potentially for decades, the Morrison Government has waved them through without any penalty whatsoever. 

“This law will recover a tiny fraction of the billions in super estimated stolen since the beginning of the system and will do nothing to change behaviour in the business community. 

“The Government has had seven years and has done nothing to help workers with unpaid super. Workers need their right to Super included in the National Employment Standards so that repayment can be easily pursued and have super paid at the same time as wages. 

“The best way to stop wage and super theft is to allow unions to once again conduct compliance checks in workplaces to end this epidemic of ripping off workers. 

“This is a shameful act by a Government which it seems will stop at nothing to cater to employers at the expense of working people. 

“The ACTU will continue to explore all available legal avenues to ensure that working people get the money they are owed and that thieves are held accountable for their actions.”

The amount of unpaid super owed to workers in Australia was estimated in 2018 to be at least $5.9 billion and wages theft by employers was thought to total $12.8 billion.

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.