Monday, March 11, 2019

Today by Paddy Manning


It’s the econobabble, stupid
Both sides are hyping their arguments

Source

As the competing economic narratives of the Coalition and Labor take shape, we are set for a “Scott-said, Bill-said” slugfest that sheds more heat than light. On inequality, on wages, on the cost of living, the data cited by both sides is already at odds. Voters are far less likely to pay attention to the finer points of the economic debate than to trust their own sense of economic wellbeing, of course. Today’s 50th trailing Newspoll suggests that the Coalition’s core economic message is not cutting through, and, given that the surplus in next month’s budget has been flagged for the best part of a year, it is hard to imagine it will deliver a sharp electoral turnaround. Nonetheless the past week has seen a flare-up of an unsettling debate about whether things are getting better or worse.

So, to counter broad perceptions that inequality is rising, Prime Minister Scott Morrison told a business audience last week that the bottom 10 per cent of households by income had achieved the highest income growth of any group since the global financial crisis. That turns out to be true, according to HILDA (Household, Income and Labour Dynamics in Australia) survey data cited by the Productivity Commission. This data shows the bottom decile indeed had the strongest income growth between 2009–10 and 2015–16, but this was nonetheless very low at under 2 per cent per annum, compared with the much higher rates of 3–7 per cent per annum for the boom years of 2003–04 to 2009–10, which were skewed heavily in favour of the top income brackets (see figure 3.6, p.47). Precisely the opposite picture emerges when wealth inequality is compared: over the twelve years to 2015–16, the wealth of the bottom 10 per cent of asset owners actually shrank by a bit more than 1 per cent a year, while the wealth of the top bracket grew by roughly 3 per cent a year (see Figure 4.3, p.73).

Similarly, last week the Opposition claimed that slowing growth figures had put Australia into a “per-capita recession” – two successive quarters of negative growth per head of population – which Ross Gittins described as “titillating silliness”.

It is not just the politicians we have to be wary of. On Friday, economic correspondent for The Sydney Morning Herald and The Age Eryk Bagshaw took the ACTU to task over what he described as the “extraordinary claim” that living standards were now lower than during the 1991–92 recession. “Not even close”, wrote Bagshaw, who cited unemployment at 11 per cent, widespread bankruptcies, and interest rates of 17 per cent at the time to argue that living standards were now much higher. Bagshaw quoted former Productivity Commissioner Peter Harris, whose research was used by the ACTU, saying: “Living standards are way above what they were in 1991 or 1992, 65 per cent higher. There has been some confusion, we had nothing to do with the research.”

If the coming election is to be a referendum on wages, or about “the economy, stupid”, it is going to be hard not to get lost in econobabble.


GOOD OPINION

“The standard is so low. We have advice from the AEC [that the Advance Australia ads] don’t quite step over the line. Same from a defamation point of view, they’re close, but not quite there. They openly infer that I am proposing a retirement tax or higher taxes, when I don’t have any such thing in my platform.”

Independent candidate for Warringah Zali Steggall vows to push for reform in political advertising laws if elected, after a right-wing group falsely claimed she supported Labor’s franking credit reforms.

BAD OPINION

“If there was a spill and the position’s vacant, I am the elected deputy prime minister of Australia, so I’d have no guilt at all in standing, but I don’t see that happening … I’m certainly not looking for a spill…but I’m not going to buggerise around with weasel words when you know exactly what the game plan is if certain events were going to occur, but they’re not going to occur …”

Forgetting who hires and fires a leader, Nationals backbencher Barnaby Joyce tells RN Breakfast that he is the “elected deputy prime minister”.

The Number

The combined amount of spending announced by the Coalition and Labor during campaign launches yesterday ahead of the NSW election on March 23.

The Policy

“The use of carryover to weaken Australia’s emissions commitments is also fundamentally at odds with limiting warming in line with the objectives of the Paris agreement and driving global momentum for coordinated, and increased ambition. This could threaten to spread a low-ambition contagion in the international system by further encouraging other countries like Russia to use carryover to delay emissions reductions.”

The Investor Group on Climate Change has told its members that Scott Morrison’s “climate solutions package” won’t change the current trajectory of rising emissions.

The list
 
ARCHIVE

“What people find really hard to bear, I’ve noticed, is the suggestion that they themselves might contain their share of human darkness, hidden inside their souls. I believe this refusal lies behind the strange hostility I encountered, many times, when I was trying to write about Robert Farquharson’s trials.” 

NEWS

“Over the past five years, the federal government has cancelled a dozen energy efficiency programs that were saving money and reducing Australia’s greenhouse gas emissions, and shelved possible replacements. Among the reasons for both moves were that they irritated business, were Labor-initiated or a low Coalition priority and risked comparisons with the Rudd government’s home insulation scheme.” 

ARCHIVE

“The idea that stingrays – or indeed fish in general – might have individual identities is not one that human beings find easy to accommodate. When we think of them – which is not often – it is usually as indistinguishable, interchangeable, slimy automatons with only the most primitive kind of awareness ... A growing body of evidence suggests quite the opposite: that fish possess not just considerable intelligence but also identities, feelings and even the capacity for abstract thought.” 

Paddy Manning

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?

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