Comment: Sorry, Scott, the economy can't grow much without higher wages | 1RossGittins
I usually pooh-pooh all alleged recessions that have to be qualified with an adjective. With recessions, it’s the whole economy or nothing. But I’ll make an exception for the "household recession" – which tells you why this week’s news of continuing weakness in the economy provides no support for Scott Morrison’s refusal to stimulate it.
That took the annual growth in real GDP up from a 1.6 per cent over the year to June, to 1.7 per cent over the year to September. Morrison needed a lot better than that to convince anyone bar his my-party-right-or-wrong supporters that a response to the Reserve Bank’s repeated pleas for budgetary stimulus could be delayed until the budget in May.To see how weak that is, remember our economy’s estimated "trend" or average rate of growth over medium term is 2.
It’s possible people will get around to spending more of their tax cut but, with household debt at record levels after years of rising house prices, and continuing weak wage growth, it’s not hard to believe they’re too worried to spend up at a time when the economy's hardly onward-and-upward.They may be intending to pay down some debt, just as it’s likely many people with mortgages have allowed the fall in the interest rates they’re being charged just to speed up their repayment of the loan.
So if the biggest part of the economy has done next to nothing to generate what little growth we’ve seen, where’s it coming from? By contrast, public sector spending – the thing Morrison & Co profess to disapprove of – is going strong, with government consumption spending up by 0.9 per cent in the quarter, and 6 per cent over the year, mainly because of the continuing rollout of the National Disability Insurance Scheme.Public investment in infrastructure – mainly by the state governments – grew 5.4 per cent in the quarter, to be 2.1 per cent up on a year earlier.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Sorry, Scott, the economy can't grow much without higher wagesI usually pooh-pooh all alleged recessions that have to be qualified with an adjective. But I’ll make an exception for the 'household recession' | OPINION by Ross Gittins
Read more »
Reality TV builder Scott Cam's $300k government paydayCelebrity builder and The Block host Scott Cam will take home more than $300,000 to spruik trades careers to young people, but the Opposition says hiring ambassadors makes no sense at all if TAFE budgets are being cut.
Read more »
TV tradie Scott Cam to be paid $345,000 for government role
Read more »
Scott Morrison keeps quiet on indigenous DV survivor fundingScott Morrison has refused to confirm whether the peak body representing indigenous survivors of domestic violence will continue to receive funding.
Read more »
Arts community mobilises against Scott Morrison after federal arts department axedA battle of words between Australia's arts community and Prime Minister Scott Morrison is taking shape.
Read more »
TV tradie Scott Cam's government pay packet revealedThe host of The Block earlier this year inked a deal to become the federal government's national careers ambassador in a bid to get more young people on the tools.
Read more »