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Well, it’s official. The economy is now at its worst point since the 1991 recession. So much for financial responsibility.
It’s official. Come June 30, this will be Australia’s worst financial year since 1992. For those playing at home, that was the year after the infamous recession we had to have. But focusing on more recent history, namely the May election, one fought under the guise of financial responsibility, and I fear we may have been sold a lemon.
Yesterday, the national accounts were published, which illustrated that our GDP has grown by a minuscule 1.3 per cent average. It’s worth mentioning that the growth of GDP fell below 2 per cent was during the global financial crisis, where our economy actually performed better. For what it’s worth, Josh Frydenberg repeatedly claimed that the GDP would average 2.25 per cent growth.
Per The New Daily’s Michael Pascoe, “Yesterday’s Australian Bureau of Statistics’ publication casts a pall over the credibility of not only the government, but also the Treasury and, to a lesser extent, the RBA. The federal budget published by Treasury on April 2 and endorsed by the Department of Finance in its PEFO (Pre-election Economic and Fiscal Outlook) weeks later shows our key economic departments don’t have a clue about what the economy has already done, let alone what it might be about to do. It looks like years of politicisation has run down Treasury to the point where budgets are prepared on patently specious grounds, such as the nonsensical assumption that our birth rate is about to start rising instead of falling. Those sorts of silly assumptions are necessary to make the better-than-reality figures the government wanted.”
Simply put, we’re living in a delusion, a condition birthed by the myth of richness. Franking credits, the housing boom, massive gaudy examples of erected wealth. There seems to be money near us. It seems to be out there, accessible because others have it. It’s what has powered us on the same course. The RBA trimming interest rates in lieu of governmental help indicates the truth behind our backward assumption. We are in true strife. In fact, they’ve been constantly revising their yearly GFP assumptions, 3.25 per cent in November, 2.5 per cent in February and 1.75 per cent in May.
Clearly, we’re left with the barest of facts. Six years of wages evaporating has finally rung our doorbell. We’re sailing our catamaran up poop creek without a paddle, the Yellowglen is sweating, and the cheese board of fiduciary safety long masticated.
However, for we average Australians, the recent future is set to be grim, one of limp wage growth and our belt tightened. Clearly, the only thing left to do is squeeze every penny. The problem with that thinking, Pascoe notes, “is that the nation faces the “Paradox of Thrift” – while it makes sense for the individual to tighten the belt, it becomes a vicious cycle for the nation if everyone does it.”