Thursday, February 28, 2019

Today by Paddy Manning


Banking on the budget
The shine may be coming off the government’s economic management credentials

Business Council of Australia chief Jennifer Westacott. AAP Image / Mick Tsikas

Having tried and most likely failed to scare the bejesus out of Australians about the medical evacuation of sick asylum seekers, the Morrison government is left with one trick up its sleeve ahead of the May election: the well-telegraphed surplus budget to be delivered in a month or so. No doubt the first surplus budget in 12 years will be rightly celebrated. But the achievement of balancing the books will pack more political punch if it is accompanied by signs of material improvement in the day-to-day economic circumstances of ordinary Australians. It will fall quite flat if economic storm clouds are gathering and Australians feel that after years of feeble gains post-GFC they are about to start heading backwards again.

Last week Reserve Bank governor Philip Lowe was sanguine about the state of the economy in 2019, telling the House of Representatives standing economics committee that: “Our central scenario for 2019 is for growth of around 3 per cent, inflation of around 2 per cent and unemployment of around 5 per cent. In the broad sweep of our economic history, this is not a bad set of numbers. Indeed, in many years in the past four decades we would have welcomed such an outcome.”

This morning, the ABC reported warnings from three major financial institutions – UBS, AMP and KPMG – that Australia’s unemployment rate is set to rise significantly. Unlike Lowe, they think falling housing markets will lead to less construction and less spending and therefore less job growth and ultimately interest rate cuts. A top Goldman Sachs strategist is predicting [$] global economic stagnation this year, according to The Australian, while in a profit update this morning Gerry Harvey, executive chairman of discretionary retailer Harvey Norman, warned [$] that retail sector woes are now spreading into the broader Australian economy to produce a “pretty flat” growth environment that could threaten jobs and the nation’s wealth.

In today’s Crikey, Bernard Keane writes [$] that the doom and gloom in the commentariat, based partly on yesterday’s weaker-than-expected construction figures [$] for the December quarter, may be “misplaced” given we are coming off a building boom, but acknowledges the weaker figures will drag on growth and therefore “consumer, business and political sentiment”.

Enter Business Council of Australia chief Jennifer Westacott, complaining broadly about the state of Australian politics, hitting back at an anti-business agenda on all sides, particularly towards banking and energy, where people want “heads on sticks”, and issuing something between a warning and a veiled threat. Assaults on business, she told [$] the AFR’s Phillip Coorey, “have flow-on effects into the economy and none of them are any good. If you start doing things that deter investment, that creates a level of risk and regulation … then the flow through of that will be very severe. That will be trickle down economics when we see the flow through of companies lessening and lessening what they are doing.”

Which kind of suggests that, in the view of the business community at least, after 27 years of economic growth, this is as good as it gets. Wanting more work? Hoping for a pay rise? It’s not looking promising, which might cast a bit of a pall over the budget.


GOOD OPINION

“Eighty per cent of Australians say we’re unbiased. Eighty per cent of Australians say they trust our news more than any trust any other kind of information. So we must be doing something right … I’m a passionate believer in the independence of the ABC and I will do everything in my utmost power to make sure it remains that way.” THE AUSTRALIAN [$]

New ABC chair Ita Buttrose, at a press conference confirming her appointment, defends the organisation against claims of bias 

BAD OPINION

“The Labor Party set up a process, we follow that process, but where I don’t believe that process actually meets the requirements, then the government of the day has the ability to make the right appointment and that’s what I have done today.”THE AUSTRALIAN [$]

Prime Minister Scott Morrison at the same press conference, defending the government’s decision to select Buttrose despite the fact she was not on a shortlist drawn up by an independent panel.

The Number

The number of days’ worth of petrol that Australia has in emergency reserve, which leaves the country vulnerable to an external supply shock. Opposition leader Bill Shorten is promising to increase reserves if Labor wins the election. READ ON [$]

The Policy

“In enacting this Act, the Parliament of Queensland recognises –
1 The inherent dignity and worth of all human beings.
2 The equal and inalienable human rights of all human beings.
3 Human rights are essential in a democratic and inclusive
society that respects the rule of law.” QUEENSLAND HUMAN RIGHTS BILL 2018

The Queensland Human Rights Bill 2018 passed through parliament yesterday, making Queensland the third Australian jurisdiction with a human rights act or charter.

The list
 
BOOKS

“After savaging without restraint those he feels have betrayed him ... on page 598 of his memoir Rudd arrives at this conclusion: ‘[W]hile I will never forget the events of June 2010, I bear no lasting enmity for those who engineered them. Too many people in Australian public life remain consumed by ancient hatreds. I do not intend to be among them.’ Rudd remains astonishingly un-self-knowing.” the monthly

MUSIC

“There’s less than a month to go until the NSW state election, and the music industry is unhappy. So too the gig-going public. Several thousand people rallied last Thursday evening, February 21, in Sydney’s Hyde Park, and an open letter and related petition accusing the current Liberal state government of ‘forcing music out of NSW’ has, at the time of writing, attracted over 120,000 signatures, both under the organising banner of Don’t Kill Live Music.” the monthly

WORLD

“Since 1963, world leaders have gathered in Munich each year for a conference, attempting to jointly resolve sources of conflict. Known as the Munich Security Conference, it was originally intended to bind the United States and its European allies closer together as they attempted to forge a united Western front during the Cold War. But this year’s conference ... achieved the opposite outcome.” The saturday paper

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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