Asking the questions

Jim Chalmers – the new ALP shadow treasurer – has an op-ed in the Australian this morning.

Wednesday’s feeble national accounts and the Reserve Bank’s decision to cut interest rates to new record lows on Tuesday shone a big spotlight on three facts: our economy is floundering, middle Australia is struggling and the government has no plan to turn things around.

Just last month the electorate expressed its opinion as to who had the better plan.

Not since the global financial crisis has national economic growth been as meagre as it has been the past year.

Yes – in anticipation of a Labor victory at the last election the economy has been very sluggish.

 We’re in our third consecutive quarter of a so-called per capita recession — the longest period since the early 1980s downturn.

Repeat after me – there is no such thing as a per capita recession.

First, in the part of the economy that matters most to families around the kitchen table, wages are stagnant, household consumption is weak, household saving is low and work is insecure.

… and the ALP went to the election promising massive tax increases?

In the absence of wages growth, with cuts to penalty rates and rising household expenses such as electricity and childcare, more needs to be done to complement interest rate cuts to put more back into people’s pockets.

… and the ALP went to the election promising more renewable energy?

Judith has a good piece in The Australian:

The basic idea was that he could impose higher taxes on mainly non-Labor voters while handing out more free stuff to Labor’s faithful constituency while reeling in some extra voters. There would be no need for those pesky questions about how Labor could afford to increase spending on health, education, childcare and other pet projects.

In his op-ed today Jim Chalmers is still calling for spending increases.

Seems to me that it’s not enough to change the front office, you need to change the speech writers too.

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29 Responses to Asking the questions

  1. Seems to me that it’s not enough to change the front office, you need to change the speech writers too.

    And the policy advisors and the reference (text) books and the team members and the team captain and the team coach and the team managers.

  2. Bruce of Newcastle

    more needs to be done to complement interest rate cuts to put more back into people’s pockets

    That is really breathtaking hypocrisy in the face of the franked dividend double-tax plan which ripped money out of pensioners hands plus the interest deductibility and capital gains tax changes which would see rents rise massively.

    Maybe he, Albo, Bowen and Shorten should be tarred and feathered so they all finally get the message.

  3. Tim Neilson

    Applause for a good analysis Sinc, apart from one quibble.

    Repeat after me – there is no such thing as a per capita recession

    That may be technically true, but the substantive point Chalmers is making is surely valid – negative GDP growth per capita surely isn’t a good thing.

    If Australia’s population went up to a billion, and during that time total national productive output went up 0.0001%, we mightn’t technically have a ‘recession’ but the results wouldn’t be pretty.

  4. stackja

    Dr Jim Chalmers MP

    Qualifications and occupation before entering Federal Parliament
    BCom (Griffith University)
    BA (Griffith University)
    PhD (Australian National University)
    Research officer, Dept of Premier and Cabinet (Qld) 1999-2001
    Tutor in politics and public policy, ANU and UC 2001
    ALP National Research Manager 2002-04
    Media Adviser to the Shadow Treasurer 2005-06
    Deputy Chief of Staff to the Leader of the Opposition 2006
    Senior Adviser to the Premier of New South Wales 2006-07
    Queensland General Manager CPR 2007
    Deputy Chief of Staff and Principal Adviser to the Treasurer 2007-10
    Chief of Staff to the Deputy Prime Minister and Treasurer 2010-13
    Executive Director, Chifley Research Centre 2013

  5. Shy Ted

    Guests on The Dumb had all the answers yesterday – gummint spending, lower interest rates, universal basic income and an Aboriginal economy. One of the panel wasn’t on the public purse.

  6. Fred

    If the ALP is opposed to a per capital recession, then stop refugees and family reunion migration.

  7. Jock

    The myth that wages have not grown has really caught on. The recent FWC case for the miniumum wage raised it by 3%. Most Public servants are getting increases of 2-4%. Other workers are getting at least 2%. This is inflation. Yes no real growth but no increase in productivity either. I find it curious that the smartest man in the room and in the rba wants higher inflation.

    The statements on Penalty rates are OTT. The FWC tinkered at the edges, but really they are still pretty good.

    The issue is productivity, and efficiency. Without these business doesnt grow and neither do wages. Certainly the Coalition has little idea how to improve these, but they seem utterly brilliant next to Labor and the Greens, who know the words but not what they mean.

  8. I’m no expert, but if there is close to no inflation, there is no need for wage growth to keep people in the same standard of living. If you artificially raise wages you either increase unemployment, or inflation.

  9. The public service get plenty and regular pay rises of perhaps 2-3% pa. Given that government (all levels) accounts for around 35-36% of GDP lets assume that 1/3 of the work force are public servants and the balance (2/3) are private sector.

    If there is (on average) flat wage growth, but 1/3 of the workforce is getting 2-3%, what happens to the wages of the 67% who are not public servants.

    Do the maths.

    And then add in the extra taxes from inflation (not even backet creep but CPI effect on GST, land tax and the index taxes and government charges).

    If Labor wants increased pay packets the solution is not more health and education spending. It is MUCH SMALLER GOVERNMENT!!

  10. Tim Neilson

    And it will surely work. Ask the Queenslanders:

    I’m no mathematician, but it looks like the tax increases won’t even pay for the public service pay rises.

    What could possibly go wrong?

  11. John Bayley

    I’m no mathematician, but it looks like the tax increases won’t even pay for the public service pay rises.

    Yeah, but given that unlike the Adani make-believe jobs, the government-created jobs are the ‘real’ ones, the economic stimulus they will generate will surely pay for them several times over.
    Just ask Ms Trad. She don’t need no pesky maths, either.

  12. mem

    Tim Neilson
    #3040262, posted on June 11, 2019 at 3:29 pm said:

    I’m no mathematician, but it looks like the tax increases won’t even pay for the public service pay rises.

    Some in the public service don’t understand that it is those outside the public service that create productivity and then pay taxes and all sorts of other premiums that is what generates funds for public servants salaries and public projects. Just because you are a public servant and pay tax doesn’t keep the economy afloat. Indeed public servants tax is an ever diminishing take and a smaller payback to the economy than a private employees tax. As as astute public servant or politician you need to be cognizant of and support private enterprise because productivity generates income for public servants and private employees. Correct me if I am wrong.

  13. Dr Fred Lenin

    Stackja ,another aparatchik on the public payroll ,bludging his way to wealthfor life . Never did an honest day s work in his miserable life and never likely to ,a worthy member of the career politics gang .

  14. candy

    The RBA cutting interest rates seems a bad omen.

    Where’s the encouragement to work and save for the future?

  15. DaveR

    This piece from Chalmers is amazing: either he was not fully aware of the policies Labor took to the election; or if he was, he didnt understand what they meant.

    Take this:

    Labor will play a constructive role on economic policy, prioritising what is responsible and affordable and what gives Australia the best chance to turn around flagging growth.

    What part of Labor’s proposed massive tax grab, or their 50% renewable energy target, or their 45% CO2 emissions reduction target (both uncosted) was either responsible or affordable, or would lift growth?

    But maybe Chalmers is really saying all those Labor policies were just hopeless, and he didnt really agree with them at all?

  16. Squirrel

    “Wednesday’s feeble national accounts and the Reserve Bank’s decision to cut interest rates to new record lows on Tuesday shone a big spotlight on three facts: our economy is floundering, middle Australia is struggling and the government has no plan to turn things around.”

    Class warfare and resentment, inter-generational warfare and resentment, an unsustainably costly public sector, and a jihad of regulation and surging input costs for our remaining productive, internationally competitive industries, are the perfect recipe for dealing with these problems.

  17. mem

    candy
    #3040336, posted on June 11, 2019 at 5:55 pm

    The RBA cutting interest rates seems a bad omen.

    Where’s the encouragement to work and save for the future?

    Silly to leave your money in cash, invest in renewables or carbon credits, it’s a sure thing sarc
    https://www.smh.com.au/national/lawyer-convicted-of-fraud-is-jailed-after-13-months-on-bail-20081222-gdt7dk.html
    Sydney lawyer involved in $34m global carbon credit con Exclusive …
    ack to investors her share of more than 34 million fleeced in an international …

  18. John Bayley

    Sydney lawyer involved in $34m global carbon credit con..

    Alex Turnbull…is that you?

  19. Eyrie

    There’s an American folk song about “Pretty Boy Floyd the Outlaw”.
    So we have “Pretty boy Jim the Outlaw”?

  20. Nob

    I regard all the extra unproductive HR and HSE people SME’s are forced to employ by regulations as government employees.

    Let’s define “extra” as anything more than what a similar business has to employ in Texas.

  21. Nob

    In a business of <25 employees in Australia it's about X2.

    What a drag on national productivity.

  22. Procrustes

    Tim Neilson: Sorry to harp – although agree with the sentiment – “I’m no mathematician, but it looks like the tax increases won’t even pay for the public service pay rises.” is too easy a swipe.

    Big savings in Government expenditure comes not from efficiency dividends and cuts to APS numbers. It comes from governments exiting a whole slew of programs.

    Not that cutting APS numbers is a bad thing. It is just the case that government itself is too big and Liberal and Labor are addicted to that.

  23. Ian of Brisbane

    The Queens Birthday awards appear to have been prepared in anticipation of a Labor government. Lefties everywhere.

  24. Rob MW

    First, in the part of the economy that matters most to families around the kitchen table, wages are stagnant, household consumption is weak, household saving is low and work is insecure.

    We won’t mention the employers tax of 9.5% that goes directly to end of work savings for every working household………………..no siree, that doesn’t count.

    Uhmm – maths – is 9.5% of a lower wage the same as 9.5% of a higher wage ? Asking for an ALP friend.

  25. Ben

    Just saw this Westpac ad on TV (reminds me of the Macca’s ad where the dad sacrifices his dreams to spend quality time with his daughter). I actually really like this kind of ad. It doesn’t sway me towards using Westpac’s services, but it does give me hope that there are people out there who recognise basic human values.

    I don’t think the family in this ad would vote Labor…

  26. Robbo

    Chalmers is just another leftie zealot who prefers dogma over political reality. Bowen showed himself up as a smart assed dill with not an ounce of empathy for the people he desired to rule. Chalmers is already showing himself up as the 2019/2020 model of the sort of Treasurer that Labor loves to have. He will not be a vote catcher. Couple him with Albanese and incompetent fools like Keneally and Dreyfus and it is already clear that Labor has turned a downwards spiral into a screaming flat out dive.

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