The Morrison government’s final report on economic management was a damning condemnation of failure, as reported by Alan Austin.
LAST WEDNESDAY’s national accounts confirm what voters have apparently already decided – that the Morrison government wasn’t so good at economic management after all.
In fact, the latest figures from the Australian Bureau of Statistics (ABS) validate what Independent AAustralia and other alternative news outlets have been reporting for at least four years — that this is the worst period of economic management on record.
Quarterly gross domestic product (GDP) growth for the March quarter was just 0.75%, bringing annual growth to a modest 3.35%.
Of the 34 members of the Organization for Economic Co-operation and Development (OECD) that have now posted growth figures in March, the average annual growth is 5.94%.
The Netherlands, Denmark, Italy and Spain are above 6%. The UK, Poland, Iceland, Hungary and Austria are above 8%. Ireland, Israel, Portugal and Slovenia are all above 9%.
When Labor was last in power, Australia had consistently stronger growth than all of these economies. Annual GDP growth ranked in the top nine in the OECD for most of the last Labor period and first in 2009. It now ranks 31st out of 38, the lowest ranking on record.
Australia’s economic growth over the past four years is the weakest of any four-year period on record.
Share of income going to workers
Statistics yesterday show that the share of total national income spent on compensating workers’ wages and salaries fell to the lowest level on record for a March quarter. See the blue table below.
Simultaneously, the percentage going to corporate profits reached a record high of 31.1%. This backs up election campaign claims that real wages have steadily fallen as corporate profits have soared.
Ever since Josh Frydenberg (remember him?) became Treasurer in 2018, real wage growth in Australia has been near the lowest in the OECD. Wages rose only 2.4% in the first quarter of this year. With inflation at 5.1%, this is a substantial reduction in the real wage.
Productivity remains well below historical growth rates at just 104.9 index points for the March quarter. This is slightly above the 104.0 six months earlier and confirms a slight rise from the 103.0 points recorded seven quarters ago in June 2020.
Household expenditure exceeds income
Household disposable income rose a meager 0.6% in the March quarter, but at least rose. This measure of Australian household wellbeing has rebounded alarmingly over the past four years with three truly negative quarters, including one before the pandemic hit.
Very little of March’s increase reflects salary increases – which are long overdue. The ABS explained that households received $2.8 billion in flood-related non-life insurance claims, which added 0.8 percentage points to the savings-to-income ratio.
This ratio fell from 13.4% to 11.4%, as the increase in household spending outpaced the growth in household income.
Record commodity prices and record mining profits
The terms of trade rose 5.9% in the March quarter, as both exports and imports rose sharply.
As ABS explained:
“Strong demand for Australian mining and rural products amid supply constraints in other producing countries and global uncertainty contributed to higher export prices. The mining sector’s operating surplus rose 14.7% to $69 billion, reflecting strong commodity prices for coal, LNG and iron ore. »
Record debt continues
The latest Treasury report before the election showed the Coalition had added a total of $616.8 billion to Australia’s gross debt during its journey. This contrasts with just $213.2 billion added by the previous Labor government – almost three times the amount, but without a long-term global financial downturn. And with no infrastructure assets to show for expenses.
Since 2012, Australia has added more gross debt to GDP than any developed country except Costa Rica. Australia has fallen from fourth in the OECD for gross debt to GDP in 2013 to 19th today. See the pink chart below.
Record trade values
The reason these dismal results on economic growth, wages, household income, productivity, debt and other indicators are so appalling is that commodity exports to China and elsewhere are booming. See gray and green chart below.
If the government of the day had ensured that a fair share of the immense wealth shipped overseas was kept for the benefit of Australians, its coffers would overflow. They are not.
The media also have a dunce cap
Last Wednesday’s results not only judge the Coalition harshly, but condemn those in the mainstream who insisted that Morrison was the leading man in money management.
Editorials in most of Australia’s mainstream daily newspapers backed the return of the Morrison government in last month’s election. The exceptions were age, The Sydney Morning Herald, Canberra time and NT time, the latter being the only Murdoch outlet to do so. Most editorials falsely claimed that the Coalition was managing the economy competently.
Leading the pro-Coalition campaign, ABC’s Leigh Sales told viewers on the eve of the election 7:30 a.m. interview with Anthony Albanese that:
“It’s surely hard to argue that the results for Australia are among the best in the world and Scott Morrison was responsible for that.”
It was a statement, not a question.
No, Leigh, Australia now ranks 31st out of 38 developed countries in terms of economic growth, down from the top nine a few years ago. It ranks near the bottom in most other key results. Your guy delivered this. Please look at the actual data.
Alan Austin is an Australian freelance columnist and freelance journalist. You can follow him on Twitter @alanaustin001.
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