are stagnant. Wealth is falling. House prices are down. Consumers
aren’t spending. Businesses aren’t investing. Interest rates are
at record lows. Unemployment has stopped going down. The annual Hilda
survey of household disposable incomes, released a fortnight ago,
showed that Australians’ wealth and living standards had fallen
slightly, in real terms, since 2009.
has managed to avoid recession for a record-breaking 28 years, but
this run of good fortune cannot continue indefinitely.
Stanford, director of the Australia Institute’s Centre for Future
Work says Australia has finally run out of luck. For close to 20
years the twin drivers of the economy have been the mining boom and a
debt-fuelled housing boom, and both have predictably run their
course. Stanford argues, “Australia has experienced the biggest
deceleration in wages since 2013, of any major industrial country.”
Stanford says, business simply lobbies for a friendlier environment
through tax cuts and red tape removal and labour market deregulation
– all trademark trickle-down economics, which has not paid off.
“The business class has been content to sit back, watch the profits
continue to roll in from investments that they’ve already made …
but really not get out of bed to do their job,” he says. “It’s
funny, with all this conversation about dole bludgers, the group in
Australia that’s really been accustomed to getting money without
working is the business community. Their profits are at near-record
levels, and their investment effort has rarely been weaker. And yet
all they can do is demand more government handouts.”
University professor Mark Wooden, director of the Hilda survey,
is this expectation, based on the past, that we should just get
richer and richer and richer. I guess that’s based on some view
that about technology driving huge productivity gains, etcetera.
Well, it’s not so obvious to me, that that need be the case. We
can’t continue to think each generation will be better than the
Commonwealth Bank chief economist, Michael Blythe, points out “We
do have a large group of people who feelthey
are going backwards,” Blythe says, citing the well-known “elephant
curve” which charts the real increase in income per adult globally
and shows rising wealth in developing countries representing the
bottom three-quarters of the world population, but no growth at all
in the next quarter (the angry working and middle classes of
developed countries) excepting a huge spike for the top 1%.