Today’s National Accounts have confirmed early signs of recovery following the worst quarterly economic contraction in Australian history and the first recession in 29 years.
The rebound in GDP is welcome but unsurprising given the easing of restrictions around much of Australia and the fact it is coming off an extraordinarily low base.
For many Australians what looks like a recovery on paper will still feel like a recession.
What really matters is not one quarterly GDP number on a page but how Australians are actually faring and whether they can provide for their loved ones.
The Morrison Government fails to understand that 2.4 million Australians are still unemployed or underemployed, and many small businesses are under enormous pressure.
Today’s data shows there is a long way to go to undo the damage of the recession, with the crisis exacerbating longstanding weaknesses in the economy under a Liberal-National Government in its eight year:
- GDP still below pre-crisis levels: The economy is still smaller than it was nearly three years ago with GDP still 4 per cent below what it was before the crisis.
- Wages remain stagnant: Average compensation per employee grew by only 0.4 per cent in the quarter, and the wages share of income fell to record lows at 49 per cent.
- Business investment crisis continues: Private business investment fell 3 per cent in the quarter and has fallen nearly 30 per cent under the Liberals, with nearly 80 per cent of this decline occurring before the crisis.
- Consumption still below pre-crisis levels: While consumption rebounded in the quarter, it is nearly 7 per cent below what it was before the crisis.
- Stagnant living standards: Real net national disposable income per capita is down 4.5 per cent over the year and has barely increased over the life of the entire Liberal National Government (1.6 per cent).
Morrison and Frydenberg shouldn’t be congratulating themselves while Australians are still hurting, jobless queues are still getting longer, and the chronic challenges of insecure work and underemployment remain.
Instead of building a strong, inclusive recovery with secure, well-paid jobs, the Morrison Government is indulging tired old ideological obsessions like cutting super, cutting support for the unemployed, and winding back consumer protections.
The lack of a proper plan for jobs and their attacks on wages weakened the economy and made Australians vulnerable going into this recession and will jeopardise the recovery as well.
WEDNESDAY, 2 DECEMBER 2020