Frustration with the government’s do-nothing economic agenda is growing
Treasurer Josh Frydenberg claimed last week’s weaker-than-forecast September-quarter national accounts showed that Australia was “back in black and back on track”, but the seven-word slogan doesn’t seem to be cutting it with the business community. Today, The Australian Financial Review’s annual CEO survey reveals [$] pressure on the government from the big end of town to do more to stimulate the economy, including infrastructure spending and – you guessed it – more business tax cuts. In a robust column, The Australian’s John Durie describes [$] the Morrison government as masters of “talking about stuff but doing nothing”, and calls on it to “act in the national interest, not play to its own political timetable”. Meanwhile, RBA governor Philip Lowe has admitted [$] his “surprise” at last week’s soft GDP figure. It’s not a pretty picture, and frustration with the government is mounting ahead of Monday’s crucial midyear economic forecast.
The Australian’s Power List – published in instalments one [$], two [$] and three [$] – claims that the relationship between Morrison and Frydenberg is genuinely close, and says the PM and treasurer had complementary styles. Whereas Morrison is described as feeling no need to seek the approval of business, Frydenberg is described as a “well-known networker with a contact book spanning multiple industries and fields”. Is it working? Macquarie Group chief executive Shemara Wikramanayake – one of the PM’s inner circle of economic advisers – told the AFR that “if the government were minded to use fiscal stimulus, infrastructure investment has historically driven growth and job creation”. Woolworths chief Brad Banducci said, “Prioritising investment in core productivity-enhancing infrastructure is critical to our collective national long-term success.” Telstra chief Andy Penn said Australia’s future had to be based on innovation, an area in which “to be frank, we are falling short”.
Is the government listening? Not while it remains fixated on delivering its narrowing surplus in next year’s budget. That is getting harder due to persistently low wage growth and the impact of the drought, with Deloitte forecasting last week that the projected budget surplus for 2019–20 had narrowed from $7.1 billion to $5.3 billion. That could narrow to wafer-thin. As Crikey’s Bernard Keane writes [$] today, the main interest in Monday’s MYEFO will be “by how much the government downgrades its economic forecasts – particularly the now-traditional downgrade of its ludicrously optimistic wages growth forecasts”.
Today, the RBA’s Lowe maintained his view that the economy has passed a gentle turning point, despite last week’s evidence that household spending went nowhere in the September quarter. “Households did get a boost in disposable income from lower interest rates and the tax cuts the government has been making,” Lowe said today. “So the surprise was that consumers decided to save a fair share of that extra income. The evidence over time is that if Australians have extra income they spend a fair chunk of it. So I’m still confident that, over time, people will spend this extra income.”
It’s a glass-half-full view that is getting harder to sustain.
“I look forward to showcasing Australia’s enviable record as a world leader in renewable energy investment, our 411 metric tonnes of CO2 overachievement of our Kyoto 2020 target, and our fully costed plan to meet our Paris commitment.”
“Religious camps and conference centres will now be able to take faith into account when deciding whether to provide accommodation, in accordance with a publicly available policy. This includes giving preference to people or groups who are of the same faith as the camp or conference centre. This reflects the unique history and status of religious camps and conference centres.”
One of the revisions in the second draft of the government’s religious freedoms legislation, which responds to the Sydney Anglican church’s complaint that the original bill would have forced them to rent campsites to Satanists.
“When the Berlin Wall came down it looked like the demonstrators for democracy and the resisters must have won that struggle. The Cold War was over and they were victorious. But they haven’t won the peace. The Stasi men, after the initial shock, have done much better in the new Germany than the people they oppressed … It is a truism that history is written by the winners. But it would be truer in this case to say that the winner is who gets to write it.”
“The Man in the Red Coat is the most lavishly idiosyncratic sort of literary response to the result of the 2016 referendum on whether the United Kingdom should leave the European Union. It is, if you can believe it, a biography of a French gynaecologist and art collector who was born in 1846 and who was painted by the great portrait artist John Singer Sargent.”
“The recent mea culpa by Woolworths of a decade-long underpayment of thousands of its employees came as an embarrassment to the workplace regulator, the Fair Work Ombudsman. The record-breaking underpayment of $300 million to some 5700 employees appears to have unfolded right in front of the regulator’s eyes. Then this week a class action was launched alleging the figure could be as high as $620 million. As the ombudsman is all too aware, Woolworths has form.”
Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is also the author of three books, including a recently updated unauthorised biography of Malcolm Turnbull, Born To Rule?
Treasurer Josh Frydenberg claimed last week’s weaker-than-forecast September-quarter national accounts showed that Australia was “back in black and back on track”, but the seven-word slogan doesn’t seem to be cutting it with the business community. Today, The Australian Financial Review’s annual CEO survey reveals [$] pressure on the government from the big end of town to do more to stimulate the economy, including infrastructure spending and – you guessed it – more business tax cuts. In a robust column, The Australian’s John Durie...