The core concept of Jobkeeper was all right, to make sure no one was deprived of the ability to buy because they had lost their income. The data in the graph are however insane. Does no one any longer have a sense of proportion, and can no one any longer look forward for more than a day at a time? And it comes with this, also at the link:
It comes from the Commonwealth Bank of Australia and it shows how much more money Australians are making than the year before. It’s a lot. We’re flying.
The black line is now at 16 per cent, which means we’re making 16 per cent more money in 2020 than last year.
Think about it like this: Australians who were banking $1000 per week last year are banking on average $1160 now. That’s a lot of extra money each week.
Where is the cash is coming from? Up until the start of the pandemic, the black line was being held up by the blue bars: earnings from work, i.e. salary and wages. We were 4 or 5 per cent richer than the year before, because more wages were being paid.
Then the COVID-19 pandemic starts. The blue bars turn slightly negative – wages and salaries went down (they would have gone down even more if not for JobKeeper!). But the red bars shoot up. That’s Treasurer Josh Frydenberg turning on the money taps.
JobSeeker is the big one, and the two $750 payments that went to pensioners.
We’re paying out 16% more in incomes while productive output must have fallen along with business profitability by some massive percent! If these numbers are anywhere correct we are heading for the rocks.
I will add that if the government, any government, still believes that the level of demand is what keeps the economy moving ahead or adds to job numbers, they are about to find out once again just how wrong that is. Not that they will learn, but they will find out all the same.