Did Morrison & Co send your chance of getting a decent pay rise up in smoke?

“Brace yourselves Australia — everyday things are about to cost more, and your chance of a pay rise has gone up in smoke” [News Corp Journalist David Ross writing in news,com,au, 8 March 2019]

Well it had to happen. After five and a half years of an Abbott-Turnbull-Morrison Coalition Government the nation has reached what is known as a per capita recession.

This hasn’t occurred since the Howard Government’s last full year in power.

Almost sixty per cent of Australia’s Gross Domestic Product comes from consumer spending and five and a half years of deliberate wage suppression by both the federal government and the business sector means the majority of consumers have little to spend.

The economy has been markedly slowing under Scott Morrison’s economic policies, first as federal treasurer then as prime minister.

Annual growth has now fallen to just 2.3 per cent according to the Reserve Bank.

This slowing has a cascade effect.

All economists news.com.au spoke to suggested the per-capita recession would hamper wage growth and — combined with increasing costs of living — make things more expensive.

“It’s a feeling of lethargy in the economy rather than outright collapse, It makes it very hard for wages to pick up when the economy is depressed,” Mr Koukalas said.

Nine weeks out from the Australian federal election and the Nationals appear to be panicking

News.com/au, 8 March 2019:

The federal Nationals Party could potentially face a leadership spill following reports Deputy Prime Minister Michael McCormack has lost the confidence of the majority of his party.

The Courier Mail reports several MPs are calling on the Party leader to resign or face a spill. Several MPs reportedly expressed fears that waiting until after the election would be too late, particularly for Queensland representatives.

Former Deputy Prime Minister Barnaby Joyce appears to be frontrunner for the Nationals leadership.

The Guardian, 8 March 2019:

Barnaby Joyce has declared he will be a candidate if the deputy prime minister, Michael McCormack, spills the Nationals leadership, but the current Nationals leader insists he is going nowhere.

The declaration of intent by Joyce to the Northern Daily Leader on Friday will keep the spotlight trained on internal party tensions after the former Nationals leader suggested in October he would retake the leadership if drafted but denied doing the numbers.

“If it was called open, of course I would stand,” Joyce reportedly told his local paper on Friday, adding he was not “driving” the instability. “I’ve maintained the same line; I have never asked one of my colleagues for a vote, I don’t intend to.”……

A sense of despair has gripped the National party, with MPs critical of McCormack’s performance as leader, and frustrated that he won’t stand up to the Liberal party on issues like energy prices, and taxpayer-backed investment in new coal plants.

But Nationals remain divided about whether or not dumping McCormack this side of the election is a good idea.

Joyce, despite the travails that forced his resignation as leader, has rusted-on support in the Nationals party room, with estimates he commands between six and seven fixed votes in a party room of 22.

But some MPs are vehemently opposed to Joyce returning to the leadership, viewing that eventuality as the only thing worse than the status quo. Nationals sources predict if the leadership was spilled there would likely be a field of several MPs that would split the vote.

Joyce resigned as Nationals leader in February 2018 after a sexual harassment complaint by rural advocate Catherine Marriott compounded weeks of bad headlines caused by his affair with a former staffer and now partner, Vikki Campion.

With New South Wales due to vote in a state election in ten days time and the NSW Nationals with at least four state seats at risk - Tweed, Lismore, Coffs Harbour and Barwon, this recent state poll cannot have settled federal nerves.

Financial Review, 12 March 2019:

A state-wide survey of 1003 voters in The Australian conducted from Friday to Monday [9-11 March] put support for the Coalition and Labor Party at 50 per cent each, a similar result to a Sun-Heald poll on Sunday that had Labor ahead 51 per cent to 49 per cent.

The latest poll would cost the government six seats - it has a six-seat majority - and would lead to a hung Parliament if replicated across the state, illustrating the closeness of the election, which will be held on March 23.

NSW Liberals behaving badly in March 2019 state election campaign

ABC News, 9 March 2019:

A NSW Liberal Party candidate has had her personal Facebook account suspended, after it was linked to fake accounts that trolled her opponent.

Sitting Labor MP for Port Stephens, Kate Washington, last week claimed that for the past six months fake Facebook accounts had been deriding her, but praising her Liberal rival Jaimie Abbott.

The Liberal Party last week denied any involvement, but yesterday conceded Facebook suspended Ms Abbott's account as well as the account of parliamentary staffer Tasman Brown.

Mr Brown works for Liberal MLC Catherine Cusack.

Ms Washington said Ms Abbott should be disendorsed for what she said were dirty tactics…..

The Liberal Party has denied Ms Abbott had any knowledge of the fake Facebook accounts, and it is blaming Mr Brown.

Ms Abbott told the ABC she was deeply saddened about the incident and felt many were misled.

"Elections should be a contest of ideas rather than a race for likes on social media, and I think that Tasman [Brown] forgot about this," she said.

"Tasman has admitted to me that as a volunteer on my campaign he was responsible for making multiple Facebook posts about the campaign under a number of names."

The Liberal candidate said she had called Ms Washington to apologise on behalf of her campaign and assured her that Mr Brown would have no further involvement in it.

"I intend to focus on continuing to campaign on issues that are important to this community," she said.

Opposition Leader Michael Daley said the trolling was a "new low" in Australian politics.

"This is Putin-style politics in Australia, it's not acceptable and I think that the position of the Premier's candidate in Port Stephens is untenable," he said.....

Mr Brown is employed under Liberal MLC Ms Cusack, who said she was incredibly disappointed.

"He [Mr Brown] realises that it's been a huge mistake, it's an embarrassment and all I can say is he's very full of remorse and he's stepped completely aside from anything to do with the Port Stephens campaign," she said.

Ms Cusack said Ms Abbott's personal Facebook account was suspended only because it was linked to Mr Brown.

She said Mr Brown had administration rights to Ms Abbott's personal account to help with her social media campaign ahead of this month's state election.

Ms Washington has asked the clerk of the NSW Parliament to investigate whether Mr Brown's online activities violated any breach of parliamentary resources.....

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

This is Karyn & one of her kids. Karyn is handing out flyers for her husband @jeromelaxale. In what universe is it ok for the Libs to surround her in this way? This sort of behaviour has to stop. #nswpol #nswvotes @GladysB @nswliberalhq pic.twitter.com/5UfLszKStC

— Penny Sharpe (@PennySharpemlc) March 9, 2019

Australian Prime Minister Scott Morrison is happy for a woman to rise in the world so long as it doesn’t disadvantage a man.

Australia’s unselfconsciously chauvinist and gaffe prone Liberal Prime Minister Scott John Morrison is happy for a woman to rise in the world as long as it doesn’t disadvantage a man.

Excerpt from a speech given by Prime Minister Morrison at a Chamber of Minerals and Energy International Women’s Day Breakfast in Perth on Friday, 8 March 2019:

“One of the other female members of my Cabinet, Kelly O'Dwyer, said at the Press Club last year, our Minister for Women, “Gender equality isn't about pitting girls against boys.” See, we're not about setting Australians against each other, trying to push some down to lift others up. That's not in our values. That is an absolutely Liberal value, that you don't push some people down to lift some people up. And that is true about gender equality too. We want to see women rise. But we don't want to see women rise only on the basis of others doing worse. We want everybody to do better, and we want to see the rise of women in this country be accelerated to ensure that their overall pace is maintained.”

* Cartoon from Google Images

Something to think about - Part Two

The Liberal Party of Australia founded by Robert Gordon Menzies in 1944-45 might have been able to govern in its own right at federal level only about 9 times in its history - at the other 23 federal elections it has always needed the support of its Coalition partner the National Party of Australia (formerly the National Country Party and before that the Country Party) to form a federal government.

Right now the National Party only has 21 members remaining in the 45th Australian Parliament -16 sitting MPs and 5 senators.

As it is a majority in the House of Representatives which allows a political party or parties to form government the Liberal Party is particularly vulnerable right now.

Not only is it a current minority government even with National Party's sixeen MPs, but come the May 2019 polling day at least two sitting Nationals MPs won't be standing for re-election and neither will at least 5 Liberal MPs.

So if the #NotTheNats push in rural & regional Australia was to really take off over the next nine weeks disillusioned voters might just take the National Party down in the Lower House in May 2019.

Losing even half their number in the House of Representatives could sink them to minor party status for decades to come.

Leaving the Liberal Party of Australia out in the cold.

Background

14 Nationals sitting in the House of Representatives who are recontesting their seat in May 2019:

Darren Chester, MP for Gippsland (Vic)
George Christensen, MP for Dawson (Qld)
Mark Coulton, MP for Parkes (NSW)
Damien Drum, MP for Murray (Vic)
Andrew Gee, MP for Calare (NSW)
David Gillespie, MP for Lyne (NSW)
Kevin Hogan, MP for Page (NSW)
Barnaby Joyce, MP for New England (NSW)
Michelle Landry, MP for Capricornia (Qld)
David Littleproud, MP for Maranoa (Qld)
Michael McCormack, MP for Riverina (NSW)
Llew O'Brien, MP for Wide Bay (Qld)
Ken O'Dowd, MP for Flynn (Qld)
Keith Pitt, MP for Hinkler (Qld)

State of Play 11 March 2019: as both Australian federal election and New South Wales state election grow near

A Newspoll survey of 1,610 Australian voted was conducted between Thursday 7 March and Sunday 10 March 2019.

The Federal Liberal-Nationals Coalition Government suffered its 50th consecutive loss on a Two-Party Preferred (TPP) basis since June 2016 in this latest Newspoll.

50th Newpoll results:

Primary Vote – Labor 39 percent (unchanged) to Liberal-Nationals 36 per cent (down 1 point), The Greens 9 per cent, One Nation 7 per cent.

Two Party Preferred (TPP) - Labor 53 per cent (unchanged) to Liberal-Nationals Coalition 46 per cent (down 1point).

Voter Net Satisfaction With Leaders’ Performance – Prime Minister Scott Morrison -2 points and Opposition Leader Bill Shorten -15 points.

If a federal election had been held on 10 March 2019 based of the preference flow in July 2016 then Labor would have won government with a majority 86 seats (up 2 seats since February poll) to the Coalition's 59 seats (down 4 seats since February poll) in the House of Representatives.

On the basis of these predictions voting in the NSW North Coast electorate of Page held by Nationals MP Kevin Hogan may go down to the wire.

Even the sports betting is favouring Labor over the Coalition.

Meanwhile in New South Wales just 12 days out from a the March 2019 state election and  The Guardian is reporting that that:

A new poll indicates Labor leads the coalition 51% to 49% on a two-party preferred basis with Daley ahead of Berejiklian as preferred premier.

The UComms/ReachTel poll, published in the Sun-Herald, also shows the Coalition’s primary vote has dropped to 28.7% while Labor’s remains steady at 34.1%.

While a YouGov Galaxy poll conducted for The Daily Telegraph shows the NSW Nationals are on the cusp of losing Barwon and Lismore and are also facing battles in the National­ seats of Upper Hunter, Tweed, Murray and Coffs Harbour, and Liberal-held Coogee, East Hills, Penrith and Goulburn.

It is being said that the loss of six of those ten seats would result in a post-election Berejiklian Government being a minority government. The last minority NSW government was voted in from 1991-1995. It was a Coalition Government supported by Independents,

If as an ordinary worker you feel like you have been financially marching backwards for the last five and a half years then you probably have

“Backing business generates higher wages, jobs & growth.”  [Australian Treasurer & Liberal MP for Kooyong Josh Frydenberg, Twitter, 8 March 2019]

Such a confident quote from a Coalition Treasurer in campaign mode - but is it true?

According to the Dept. of Prime Minister & Cabinet/ASIC at the end of the period 30 July 2013 to 31 June 2014, there were est.2.6 million actively trading businesses in Australia and, according to the ABS by the end of  2017-18 there were 2.3 million actively trading businesses in the market sector in Australia.

Despite the Morrison Government alleging that by November 2018 it had created 1.2 million more jobs since September 2013, it's easy enough to see that in January 2019 the seasonally adjusted unemployment rate was only 0.6% lower than it was when the Abbott-Turnbull-Morrison Coalition Government came to power in September 2013.

Additionally, it would appear that the ratio of unemployed persons to job vacancies in late 2013 was est. 20 unemployed individuals for very 1 job vacancy and by December 2018 this stood at an est. 15.57 unemployed individuals for every 1 job vacancy.

So what about wages growth?

The Global Financial Crisis ran from 2007 to 2008 and Australia came through this crisis relatively unscathed.

So with little structural damage to our financial institutions or the industry & business sectors, the national economy should be chugging along nicely.

By now ordinary workers should be reaping the rewards for their productivity - as labour input to market sector multifactor productivity increased by 3.0% overall on quality adjusted hours worked basis in 2017-18 (while capital input only grew by 2.0%).

The biggest labor input increases occurred in Administrative and Support Services (8.2%), Manufacturing (3.8%), Accommodation and Food Services (3.7%), and Professional, Scientific and Technical Services (3.7%).

However, this is what each Australian's nominal slice of the economic pie looked like by December 2018......

According to the Australian Bureau of Statistics (ABS) in the December Quarter 2018; Compensation of employees increased by 0.9% nationally. 

In the Australian Capital Territory  the compensation increase was 2.1%, in Tasmania 1.6%, Queensland 1.5%, Victoria 1.4%, New South Wales 0.7%, and South Australia 0.1%. However compensation growth went backwards in Western Australia at -0.2% and Northern Territory -0.7%.

Also according to the ABS; The Consumer Price Index (CPI) rose 0.5 per cent in the December quarter 2018.  This followed a rise of 0.4 per cent in the September quarter, a rise of 0.4% in the June quarter and a 0.4% rise in the March quarter 2018.

It doesn't take a genius to see that nationally the effect of that December national compensation increase was actually 0.9% minus 0.5% CPI equalling 0.4% when it came to how far those few dollars in wage increase would stretch the weekly pay packet.

Why is low wages growth occurring? Well according to the Minister for Finance and the Public Service & Liberal Senator for Western Australia Mathias Cormann it is deliberate Morrison Government policy to suppress wages growth.

Low wage growth is no accident. Watch @MathiasCormann confirm that. pic.twitter.com/z8fGGCO52Z

— Australian Unions (@unionsaustralia) March 8, 2019

The result of this ongoing wages suppression? A continuation of the downward progression of disposable income and rising household debt, as illustrated in this graph from 2015 onwards.

ABC News, 9 September 2018

BACKGROUND

 Business Insider, 4 March 2019:

The ABS on Monday (4 March) released its Business Indicators results for December 2018, which showed trend growth in company gross operating profits at a healthy 9.6 per cent over the year to the December quarter.

Seasonally adjusted, that figure was even higher, hitting double digits at 10.5 per cent.

The figures were boosted by a strong performance that quarter, with trend growth up by 0.9 of a percentage point on the September quarter, or by 0.8 of a percentage point when seasonally adjusted.

The New Daily, 7 March 2019:

Chief executives and chief financial officers don’t get bonuses for increasing their companies’ labour costs – so they try not to.

Chairpersons and boards are not clapped on their collective back by institutional investors for devoting a greater share of revenue to wages – so they don’t.

And the cumulative effect of those simple realities is now unavoidable: Years of real, take-home wages going backwards while corporate profits increased, have meant household consumption is stalling and taking the economy with it.

Yet such is the myopic nature of corporate focus, business leaders react with horror to the idea that employees need a bigger share of the pie.

The business lobby claims wage increases aren’t possible without productivity trade-offs – but that’s after the productivity increases of recent years going overwhelmingly to higher profits.

Quite simply, the key business lobby groups have little credibility. They claimed reducing penalty rates would increase employment – it didn’t. They claimed cutting company tax would increase wages: It hasn’t and it won’t.

Household consumption accounts for more than half of the economy. According to the ABS, and nicely reported by Greg Jericho with helpful graphs, real household disposable income per capita has fallen back to where it was in 2010.

“Average compensation per employee” grew by only 1.5 per cent in 2018 – an even worse result than the better-publicised ABS wages index.

It’s only population growth that’s providing what little retail sales and GDP growth we have….

The Fair Work Commission (FWC) increased the minimum wage by 3.5 per cent last July – against the arguments of the business lobby – and by 3.3 per cent in July 2017. 

That increase of 6.8 per cent barely registered on the various measures of wages growth.

The conundrum of business needing consumers to have income growth, but 

not wanting to pay workers more, is a little like the “Paradox of Thrift” – it makes sense for an individual in uncertain times to save and not spend as much, but if everyone does it, uncertain times turn into bad times.

As argued here previously, business is holding a very determined wages strike. 

Corporate leaders don’t need FWC permission to do it, they just have to hang together to keep a lid on wage rises. In the process, they’re shooting themselves in the foot.

For the Coalition government, the result is a record of economic failure.