Opinions
October 2022
Families change but the same problems remain
The latest data from the Bureau of Statistics on families shows that more than ever before couples with dependants are both working.
With a global recession looming the cure of inflation looks to be worse than the disease
This week the IMF released its latest World Economic Outlook. And the outlook is dire. Economic growth around the world was downgraded with recession-like conditions being predicted for many advanced economies including the USA, UK and much of the EU.
September 2022
The UK shows how bad the Stage 3 tax cuts will be
This week the UK government introduced massive high-income tax cuts – cuts that are not even as bad as the Stage 3 tax cuts here in Australia. And the reaction by the market was brutal. Investors saw the tax cuts for what they were – a redistribution of national income from the poorest to the wealthiest, that provided no economic growth. As a result the value of the UK Pound plunged.
They didn’t cause the inflation, but workers are expected to cure it
Last week before the House Economics Committee, the Governor of the Reserve Bank made it clear that the current rise in inflation has nothing to do with wages growth. And yet he also made it clear he expects workers to bear the brunt of the cost that comes from slowing inflation.
The latest data shows just how bad housing affordability is
Since the Reserve Bank began raising interest rates in May, the housing market has very much come off the boil.
The GDP figures show the ongoing shift of the national income to profits
The June quarter GDP figures released by the Bureau of Statistics showed that over the past year the economy grew a seemingly strong 3.6%.
The PBO reveals just how much the Stage 3 tax cuts favour the wealthy
The Stage 3 tax cuts, which will essentially create a flat income tax system, have always been clearly biased towards high-income earners. For those earning over $200,000, the tax cuts represent a 4.5% cut compared to just 0.6% for someone on the median income of $60,000. But this week, the Parliamentary Budget Office has released costings that detail just how skewed the allocation of money is to the richest in our society.
August 2022
Market power costs consumers, workers and the whole economy
For most of the past 40 years whenever the discussion turns to the need to lift productivity, invariably the conversation is dominated by business groups and various media commentators who suggest the solution is more labour market flexibility. Just a bit more flexibility and productivity will improve!
The biggest real wages fall on record
The latest wages price index figures from the Bureau of Statistics reveal just how far workers ability to purchase items with what they earn has fallen.
The latest taxation statistics reveal the massive gender pay gap across the whole economy
The 2019-20 taxation statistics released this week by the ATO provide a plethora of data that reveals with precision the salaries of people by location, occupation age and importantly, gender.
Rate rises look set to dramatically slow the economy
The latest raise in the cash rate has meant interest rates have increased by more in 4 months than they have anytime since 1994.
July 2022
A decade of real wages growth lost as prices soar ahead of wages growth
The latest inflation figures from the Bureau of Statistics reveal just how much workers have been left behind. Writing in Guardian Australia, labour market and fiscal policy director Greg Jericho notes that while the focus is on the biggest annual increase in inflation since the introduction of the GST, the data also shows that real wages have fallen drastically.
The Job Summit needs to produce a fairer labour market
Despite unemployment at nearly 50 years lows, it will be little surprise to workers that wages growth is only at 3 year highs. Over the past decade the relationship between wages growth and unemployment has shifted such that levels of unemployment that would have once seen wages growing at more than 4% are now associated with growth of well below 3%.
Will “curing” inflation cause a recession?
Right now, the big numbers of the economy look pretty good. Unemployment in June was just 3.5% – the lowest since 1974. So why has consumer confidence crashed and why are so many Australians worried about a recession?
June 2022
Profits push up prices too, so why is the RBA governor only talking about wages?
Reserve Bank of Australia governor Phillip Lowe has invoked memories of the 1970s, warning wage growth must be restrained to contain Australia’s surging inflation. In the 1970s, Lowe said last week, “we got into trouble because wages growth responded mechanically to the higher inflation rate”. Now, with inflation above 5%, and tipped to reach 7% by the
Employer Arguments Against Minimum Wage Boost Don’t Hold Water
The Fair Work Commission has announced an important increase in the national minimum wage, which will rise by $1.05 per hour (or 5.2%) effective 1 July 2022. This represents a significant shift in the debate over wages in Australia, whichi have been languishing for years — and are now falling in real terms.
The recovery needs to deliver for workers
The latest labour account survey released by the Bureau of Statistics revealed that while job growth remains solid and the job vacancy rate is at record levels, workers real incomes remains at best flat.
GDP figures show workers are losing out
The March quarter GDP figures show that while the economy is growing strongly, workers are missing out of their fair share.
May 2022
Real wages plummet and will take years to recover
The release of the March Wage Price Index confirms what a horror year it has been for workers. While inflation in the past 12 months rose 5.1%, wages grew just 2.4%. Even worse, in the past year the price of non-discretionary items rose 6.6%, meaning for those on low wages, who spend more of their incomes on essential items, real wages would have fallen even more than the 2.6% average fall.
Real wages are shrinking, these figures put it beyond doubt
Every three months the Bureau of Statistics releases the lesser-known cousin of the consumer price index. It’s called the Wage Price Index (WPI) and it records changes in the overall level of wages, in the same way the price index records changes in the overall level of consumer prices.
To really address housing affordability we need to think differently
The current election campaign has seen the two major parties put forward housing policies, both of which to varying degrees are aimed at the demand side of the equation.
Real wages should rise – anything else means declining living standards
This week the election campaign has turned to discussion about the increase to the minimum wage, with suggestions that an increase either in line with the curent rate of inflation of 5.1% or marginally above it (such as the ACTU’s proposal of a 5.5% increase) would bring about a return to 1970s style wage sprials.
Why commentary that wages growing in line with inflation will drive up inflation is completely misguided
Today the opposition leader, Anthony Albanese was asked about wages in the following exchange: Journalist: “You said that you don’t want people to go backwards. Does that mean that you would support a wage hike of 5.1% just to keep up with inflation? Anthony Albanese: “Absolutely”. Any other response would be to suggest that real
Rate rises are going to cause a housing affordability crunch
For most of the past decade the talk about housing affordability has focussed on house prices. As fiscal policy director, Greg Jericho notes in his Guardian Australia column, falling interest rates since November 2010 have made paying off a mortgage less onerous than it otherwise would have given the soaring house prices.
April 2022
High inflation means real wages have plummeted
The March CPI figures showing that inflation rose 5.1% over the past 12 months is not just the highest level since the introduction of the GST it also signals the biggest fall in real wages since then as well.
The election campaign needs to tackle climate change
In the week before the election campaign began the IPCC released its latest report that contained warnings that deep, rapid and sustained emissions reductions are needed to prevent temperatures from rising 1.5C or 2C above pre-industrial levels.
We (still) need to talk about insecure work
Business groups and conservative media are happy to discuss insecure work as if it is nothing new – stable and part of a healthy economy that provides workers with independence. But this is not the case, with insecure forms of work – casual, gigs, temporary work and short-term contracts – taking up a growing share of jobs in Australia.
The election campaign needs to be more than a quiz show
The election campaign thus far has been dominated with gotcha questions that unfortunately have missed the vital need to examine the different policies on offer at a time when Australia’s economy is in a state of extreme flux.
House prices means interest rates do not need to rise much to inflict great costs
The more than a decade long period of the Reserve Bank going without raising interest rates looks set to end. Rising inflation and the unwinding of the pandemic restrictions and border closures means that the emergency cash rate of 0.1% will soon go up. But at the moment the market expects before the end of next year that it will rise to above 3%.
March 2022
A slap-dash budget revealing a government with no idea why it is in power
This year’s budget was transparently targeted towards the May election.
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