At a fundraising event for Lifeline Canberra on Monday night, general manager Adam Miller opened with a brief and distressing reality check on the telephone counselling service’s work across the country.
“Out of the 10 busiest days in Lifeline’s history,” Miller told the audience, “five have been in the last six months.”
He was speaking nationally, not just locally. Given that Lifeline is 60 years old, it was a solemn illustration of the times in which we live.
Miller said the anxiety, social isolation and loneliness that peaked during the Covid-19 emergency, especially through the lockdowns and most particularly in Victoria, had eased off a bit but was still higher than before the pandemic. Financial pressures were playing an undeniable role.
“We see a lot of the underlying causes of why people ring us,” Miller said. “It’s financial stress and financial anxiety, and also the safety and security of their employment. People are very concerned about what might come, when they’re already struggling financially to pay the essentials. They’re wondering how safe and secure their jobs are.”
This week’s picture of the state of the economy in the quarterly national accounts figures is a numerical reflection of those pressures. At just 0.3% growth for the quarter, seasonally adjusted, and 0.8% over the year, the economy’s heartbeat is barely detectable. Household spending and private investment contributed exactly zero to its growth in the September quarter. Neither businesses nor individuals have been spending on non-essentials. Anxiety is high.
There’s some weirdness and a few apparent contradictions in the figures. Given the lack of enthusiasm to part with money in the rest of the country, it’s government spending that has stopped the economy slipping into negative territory. Yet, as the Reserve Bank governor keeps reminding us, high levels of government spending at the state and federal level are also stopping inflation from falling to where the bank’s board needs it to be to take the interest-rate pressure off. Go figure.
The state-and-territory component of that spending, much of it on infrastructure projects, is seeing an upturn in the usual way of things when it comes to construction costs. Normally, supply outstrips demand in construction. But at the moment, because all those projects are gobbling up materials and labour, it’s the other way around and that pushes inflation up.
So there are bricks-and-mortar factors affecting both inflation and growth – keeping one up and the other down. And then there are our emotional responses, the animal spirits that can also have a real effect.
Those national accounts figures reveal a palpable fear about the future, the kind of fear Miller describes when he talks about what Lifeline is picking up from those who call.
The figures prove people didn’t spend those tax cuts the government unveiled way back in January and delivered in July, the ones that were adjusted more in favour of those on low and middle incomes. They didn’t go buy themselves something nice, they saved instead. That doesn’t say comfortable. That says nervous.
Although unemployment seems more or less stable for now, and relatively low, people are worried about their jobs and about their economic and general security. In the context of next year’s election, it’s that fear, as much as its political opponents, that the government has to fight.
The treasurer, Jim Chalmers, is dampening expectations of any major pre-election spree in the upcoming mid-year economic and fiscal outlook (Myefo) duet in mid-December. But he’s also still hinting at more cost-of-living relief before we go to the polls.
The big challenge for a government wanting to offer meaningful extra support and also preferably win some electoral favour is what kind of support is going to be most effective – financially and politically – without slowing growth even further.
Power-bill subsidies clearly help people worried about high energy costs. The ones already delivered have had multiple benefits, offering relief to households, helping to push inflation down a bit and also lowering payments that are pegged to the inflation figure.
So does the government do the same again, ahead of the election? Very possibly.
The downside in offering more subsidies in an economy barely breathing is that it means people don’t spend their own money on power bills – which potentially means more of the same for that growth figure just a blip above zero.
So does the treasurer lean more towards worrying about growth, and the risk of skating ever closer to a recession, or about inflation? Inflation is the winner. The government needs that direct prices-and-rates pressure to start to come off. The signs are that it’s willing to roll the dice on squeezing growth even more and do a bit more to manually encourage inflation to finally respond to gravity.
The government can’t afford to hitch its re-election prospects to the hope of an interest-rate cut, even if some economists are now saying those national accounts figures might bring hoped-for relief forward from May to April and right into the government’s election sweet spot.
That’s why both Chalmers and prime minister Anthony Albanese have been trying to encourage optimism, talking about the horizon, looking to the future. They need people to feel that things are going to get better under the stewardship of those currently in charge.
Voters will respond to their own feelings of insecurity by looking to whomever offers stability, reliability, resilience and, yes, strength to get through these tough times and a believable promise of better to come.
And Peter Dutton is standing by to be that guy.
As the political arguments are cast and the strategies play out, the agencies at the frontline in combatting these stresses have to just keep going.
Things are so finely balanced for many people that all kinds of major events locally, nationally and internationally can trigger a sudden personal crisis and a surge in calls to Lifeline – even the intense media speculation about interest rates that accompany the Reserve Bank board’s meetings.
Miller says the high tempo in the counselling service’s workload is definitely a worry but also a kind of comfort. When people need help, they want them to call.
“The thing that keeps us awake at night is not the number of calls we get because it’s great that people are brave enough to pick up the phone and ring us,” Miller says. “What keep us awake at night is the calls we don’t get.”
Karen Middleton is Guardian Australia’s political editor
In Australia, support is available at Lifeline on 13 11 14, Beyond Blue on 1300 22 4636, and at MensLine on 1300 789 978. In the UK, the charity Mind is available on 0300 123 3393 and Childline on 0800 1111. In the US, call or text Mental Health America at 988 or chat 988lifeline.org
