While the Turnbull government will continue to enjoy bragging about the fact 400,000 jobs were created over 2017, there are some worrying signs in yesterday’s national accounts data, especially for a government that has just over a year until an election.
Overall, economic growth slowed in the December quarter, down from 0.7% in the September quarter to 0.4%. Over 2017, growth was 2.3%, compared to 2.9% in the year to September. Year-on-year, per capita GDP growth was just 0.8%. This is a continuation of the tepid growth we’ve had since 2013, and seemingly at odds with the 400,000 jobs — but we’ll come to that in a moment.
In the bush, however, things are worse. Rural goods exports fell 9.7% in the December quarter, and according to the National Australia Bank’s analysis, farm GDP fell 3.3% in the December quarter after a 6.5% slide in the three months to December, to be down 10% for 2017. In the wider economy, that would be called a technical recession.
It illustrates why, for all the relentless focus on Barnaby Joyce’s private life by the media, the real problem with Joyce was always that he was an absolute dud as a minister and leader. A 10% fall in farm GDP is Barnaby Joyce’s legacy to the people of rural Australia from his time as agriculture minister, and a testament to how badly out-of-touch the party of the bush is supposed to be.
Then there’s labour productivity. GDP per hour worked went backwards in the quarter, by 0.8%, and fell by 1% in net terms across the year. Gross value-added per hour worked in the market sector fell for a third quarter in a row. This is the flip side of having a low-growth economy that’s producing lots of jobs: hours worked must outstrip growth until growth picks up or hours worked falls back again. Moreover, much of the growth in jobs has come in health and education, the two sectors hardest to measure in terms of labour productivity.
Ditto with wages growth, or lack thereof. As AMP’s Shane Oliver pointed out yesterday, the overall growth in total compensation of employees of 4.8% in 2017 was because of jobs growth, not wages growth. There were a lot more jobs, but average compensation per employee grew just 1.6% over the year. That was lower than the recent 2.1% wage price index (WPI) result because low-paid jobs are growing more rapidly than high-paid jobs.
At least that meant a rise in household consumption — 1.0% for the quarter and 2.9% for the year. But we already know that’s not going to last into this current March quarter, because retail sales figures for January showed a miserable 0.1% growth.
The positive for the government is growing investment outside housing construction and mining — even if it rather contradicts the “tax cuts are needed for investment” fantasy it peddles. But its continuing refusal to face up to wages stagnation — witness the current demonisation of the CFMEU-MUA merger as ushering in the Four Horsemen of the IR Apocalypse — and a recession in the bush does not augur well for a government that has to face the voters sooner than it would like.
Thank you for this story on ‘bush’ issues. Before the destruction of RN we used to have the BookShow with Ramona K followed by Bush Telegraph for an hour. This placed the large audience for books next to ‘the bush’ show. You just kind of kept listening and it was mostly brilliant. As people start to move out of bloated cities what is happening beyond them will, as connectivity diminishes as an issue, become of greater interest to those who want to live a financially manageable life.
The sooner country people realise that the national party no longer represents them the sooner things will turn around in the bush, today`s national party represents big mining and big and mostly foreign agricultural interests, the mere fact that former leader Joyce and Rhinehart are so close should send alarm bells ringing, here`s a multi millionaire that suggests workers should only be paid $2 a day and who flies the former deputy prime minister Joyce all over the country to promote her interests, a man and a party who voted for the slashing of workers penalty rates and cuts to retirees incomes incomes and are constant advocates for the Adani mine that will shut down 4 nsw upper hunter coal mines and throw hundreds out of work and will employ very few if any queenslanders as a result, and a party that pushes for the government to fund the building of a private railway at taxpayers expense, one that Rhinehart can then utilise for her massive companies at no cost to her, the national party has been bought and paid for by big minin, big cotton g and foreign interests, just because your grandaddy always voted country party doesn`t mean todays rural voter should, because that country party of old did represent grandads and their families, todays national party doesn`t.
John Howard has referred to the inescapable arithmetic of politics in the past. Here’s an arithmetical question. If unemployment was 5.5% a year ago and is still 5.5%, can someone please explain why the creation of those jobs has had no effect on the unemployment rate?
Here’s a non answer.
If we have this magical wonderful amazing jobs growth – described by Bernard recently as ‘massive’ – how come we have had Australians working less hours – by 27 million hours – last month compared to the previous and that month itself had a decline in many millions of hours worked compared to it’s previous month.
Two consecutive months where Australians have had less work to do.
More jobs = less working hours.
Something is dreadfully wrong.
Population growth.
‘A 10% fall in farm GDP is Barnaby Joyce’s legacy to the people of rural Australia…’
For this remarkable achievement Gina Rinehart described him as a ‘champion’ of agriculture worthy of her cheque for $40K. Imagine how generous she might have been had Cousin Jethro overseen only 5% fall in farm GDP.
Cousin Jethro is the Elmer Gantry/Brother Justin Crowe of rural politics, saying all the right things – articulating and playing their insecurities and trepidation, being so far from the action, their boy on the Canberra farm – the congregation doesn’t want to look at what has been going on behind the scenes.
The iconography of what he did with the M-DBA doesn’t bear thinking about – that that could be indicative of his real considerations, his sort of “pragmatic politics” where top table (donors) get all the cream – so they don’t.