A SAD ECONOMY
It’s not exactly a morning bursting with positive headlines about the state of things today, but… uh… it’s almost the weekend (??). Sorry, it’s a bit grim and serious out there.
Yesterday’s economy update generated plenty of coverage overnight, with the ABC recalling “Australia’s economy recorded its weakest annual growth rate in decades in the September quarter, outside of the pandemic.” The latest data from the Australian Bureau of Statistics shows the economy grew by 0.3% in the September quarter and 0.8% over the year, meaning the annual growth rate has weakened even further from the extremely weak growth recorded in the June quarter, the broadcaster said.
The Sydney Morning Herald reports the figures have increased pressure on the Reserve Bank of Australia to cut interest rates (as mentioned earlier in the week, the next board meeting is on Monday) “and Treasurer Jim Chalmers faces questions about his ability to manage the economy”.
The paper flags that if not for public spending and immigration the country would be in recession. Many places, including the Nine papers, have picked up on EY chief economist Cherelle Murphy’s comments on the data, which she said represented a “sad economy without much hope”.
Chalmers tried to spin the news, saying: “We [have] made some progress but we don’t pretend that when we see these welcome developments in the national data that people automatically are feeling better or faring better in communities right around Australia. People are still under pressure.”
His opposite number, shadow treasurer Angus Taylor, countered bluntly: “This outcome reflects the complete and utter failure of Labor’s big Australia, big government policies.”
The Age quotes the head of Deloitte Access Economics, Pradeep Philip, as saying the economy is “stuck in the mud and spinning its wheels”. “With little headroom for further fiscal stimulus and with the private economy clobbered, the case for a rate cut is strong. But with the Reserve Bank of Australia maintaining a hawkish outlook on inflation, a rate cut may well come later rather than sooner,” he said.
Elsewhere, the ABC has declared “Australia has been ranked dead last in a field of 58 countries participating in a long-running, international maths and science test and now has the world’s biggest gender gap.” The Sydney Morning Herald flags that Year 4 students achieved their strongest-ever results in the testing although male students are now more than 20 points ahead of female students.
Guardian Australia said the 2023 Trends in International Mathematics and Science Study, which was released by the Australian Council for Educational Research late on Wednesday, analysed the skills of Year 4 and 8 students. The ABC highlights for Year 4 maths Australia ranked 20th out of 58, for Year 4 science the country was 8th out of 58, for Year 8 maths 12th out of 42, and for Year 8 science 13th out of 42.
Education Minister Jason Clare said the results showed Australia had a “good education system” but it could be “better and fairer”, Guardian Australia reports. “That’s why we want to invest more money in our public schools and tie that funding to practical reforms that will help students catch up, keep up and finish school,” he added.
Lead author of the report, Nicole Wernert, said of the gender gap: “It’s the first time we’ve seen a gender gap across both subjects and year levels. At Year 4 it appears to be a result of a greater improvement in the achievement of Year 4 boys, but at Year 8, girls have declined in performance and boys have stayed steady or improved.
“That’s concerning — it’s a warning line that suggests we need to start paying attention.”
COST OF LIVING RELIEF?
While Chalmers tries to convince people the latest economic data isn’t as “sad” as analysts are suggesting and emphasise government spending is keeping the economy afloat, the Australian Financial Review reports the government “is mulling a third successive round of power bill discounts to take to the next election”.
The paper says the government’s expenditure review committee is looking into extending the power bill discounts which are due to end on June 30 as part of its pre-election spending package. The AFR said Finance Minister Katy Gallagher did not rule out an extension when asked on Wednesday.
“We’re working through some of the final details for our mid-year economic update right now. Obviously, how we can continue to support households with cost of living pressures is front and centre of our thinking,” she said.
In the same piece, the paper also carries more in-depth quotes from the treasurer on the government intervention in the economy, quoting Chalmers as saying: “We acknowledge that as growth recovers in our economy the best kind of growth is private sector-led growth.
“But when the economy is especially weak, when there’s a need for cost of living relief and investment in defence and investment in the NDIS, [government spending] is playing a helpful role.”
Meanwhile, the AAP flags the Organisation for Economic Cooperation and Development (OECD) reckons that while Australia’s economic growth prospects are improving, “immigration policies, unexpectedly stubborn services inflation and escalating global trade tensions pose risks”.
In the context of the federal government and the opposition implementing or proposing stricter immigration measures, the OECD states: “Policymakers should beware, in seeking to curb immigration to ease pressures on housing costs, of worsening labour shortages, including in house-building. An abrupt slowing of immigration would hinder consumption growth.”
Like everyone else, the organisation flagged the public spending offsetting the weak private consumption and said “a degree of consolidation” was needed in the medium term to deal with the looming budgetary pressures of an aging population.
On those themes, Guardian Australia reports a study from the Australian National University which shows “Australia is still far from catching up to the levels of migration expected before the pandemic”.
The site says the study shows before COVID, net migration was projected to hit 300,000 by next year but net overseas migration may in fact be 82,000 people short of that figure.
ON A LIGHTER NOTE…
Right, this is the last time we flag a word of the year, promise. This one just seemed quite apt for the news cycle of 2024.
The Associated Press has reported the Oxford Dictionary’s word of the year is “brain rot”.
The phrase is defined as “the supposed deterioration of a person’s mental or intellectual state, especially viewed as the result of overconsumption of material (now particularly online content) considered to be trivial or unchallenging”.
As AP points out, the word of the year accolade is awarded to “a word or expression that reflects a defining theme from the past 12 months”.
The newswire flags the Collins Dictionary’s 2024 word of the year is “brat”, Charlie XCX’s album title that became a meme and apparently a way of life.
It’s been a tiring year.
Say What?
I’m sorry, I don’t know what you’re referring to.
Bob Katter
The Queensland MP reckons he doesn’t remember his classic speech on marriage equality and crocodiles.
CRIKEY RECAP
Polling to gauge Australians’ support for AUKUS is clearly a fraught exercise, partly because it is a devilishly complex topic that many members of the public — perhaps most of us — know disappointingly little about. To a large extent, it depends on how you frame your questions, what information about AUKUS you include or leave out, which aspects of public attitudes the questions tap into, and whether Australians are asked to respond on the basis of their short-term self-interest or the purported long-term benefits for the nation.
For this reason, even seasoned political analysts who have made a career out of polling warn that “when analysts, sometimes innocently, use poll numbers as a definitive guide to public opinion even on issues to which most people have given little thought, they are writing fiction more than citing fact”.
Australia has laws that say people must have reasonable and equal access to landline phone services, payphones and broadband internet — but no such rules apply to mobile phone services.
That could be about to change. The Albanese government is considering developing a universal service obligation for mobile phone service providers, Crikey understands.
Poor phone and internet coverage is a huge problem for many Australians, especially those living in regional and remote places, with more than 50,000 complaints made to the telecommunications industry ombudsman between 2021 and 2024, according to ABC News.
Perhaps one day the penny will drop within Labor that it’s the only one playing the neoliberal game anymore.
The Coalition, under new Queensland management, has abandoned free markets and small governments. It wants to break up big corporations and expand the federal government into a whole vast new industry. The Business Council is an incompetent lobby group of multinationals fixated on lower company taxes and fewer rights for workers, with an abiding hatred of competition and social spending.
The Financial Review and The Australian will never give Labor credit for adhering to the neoliberal rules — they are partisan outlets that obsessively despise Labor and trade unions. Plus the AFR is dedicated to maximising shareholder returns at the expense of ordinary Australians (if we had a rerun now of the 1980s Hawke-Keating era, the AFR would be editorialising about unions having too much power, while The Australian would be savaging the “elite, out-of-touch globalist agenda” behind market reforms).
Voters know perfectly well the role large corporations play in ripping them off. But Labor sits on the sidelines, worried about whom it might upset if it intervenes.
READ ALL ABOUT IT
French PM Michel Barnier ousted in no-confidence vote (BBC)
South Korea’s president, Yoon Suk Yeol, facing impeachment after martial law shock (The Guardian)
Police hunt for gunman after UnitedHealthcare CEO killed in midtown Manhattan (The New York Times) ($)
Rising sick days are costing Europe billions every year (Bloomberg) ($)
Trump mulls replacing Pete Hegseth with Florida Gov. Ron DeSantis (The Wall Street Journal) ($)
Britain installs first new nuclear reactor in 30 years (The Telegraph)
THE COMMENTARIAT
A terrible set of numbers for a treasurer and Reserve Bank governor — Shane Wright (The Sydney Morning Herald): The “narrow path” that both Bullock and her predecessor Philip Lowe talked about seems more like a single thread of old rope over a deep gorge. Economic growth has not been this poor, outside of COVID, since the 1990-91 recession that devastated much of the country.
Chalmers’ idol, Paul Keating, won the 1993 election with a million people out of work, suggesting even the largest economic difficulties can be overcome.
But in 1931, Labor treasurer Ted Theodore lost his seat as the Scullin government was swept from office after just one terrible term in power as the Great Depression began.
Will Trump be the president of vice? — Charles Fain Lehman (The New York Times): In his recent campaign, Trump embraced a strategy of social moderation. Not only did he loudly signal his opposition to hard-line anti-abortion policies, but he also endorsed marijuana legalisation in Florida and was aligned with the Biden administration’s move to give pot a less restrictive legal status. And he embraced the crypto craze, launching his own cryptocurrency company.
Trump’s moderation on pot, crypto — which some social conservatives see as closer to gambling than a serious investment — and other vices appears to have been part of a calculated effort to turn out young men who, surveys suggest, helped propel him to victory.
Pushing forward with liberalisation in these areas could help establish “vice voters” as part of the new, post-Trump Republican coalition.
But it would also have dangerous social consequences — consequences that could help fuel an already growing backlash against both Trump and addictive, harmful goods of all kinds.
