The national accounts for the June quarter do not support the popular narrative of a severe cost of living crisis, as Alan Austin reports. IN HER PUBLIC COMMENTS on last Wednesday’s (4 September 2024) national accounts , Katherine Keenan said: ' The Australian economy grew for the 11th consecutive quarter, although growth slowed over the 2023-24 financial year. ' What the head of national accounts at the Australian Bureau of Statistics ( ABS ) could have added, but may not have known, was that only two economies of all the advanced democracies can boast that record — Australia and Belgium .
Last week’s numbers look pretty ordinary on their own. The quarterly increase in gross domestic product (GDP) was 0.22% and the annual rise was 1.
49%. Both are low compared with the strong growth numbers since the economic transformation of the 1980s. Global data confirms this is now a low growth era.
Of the 32 OECD member countries to have reported quarterly data for June, eight reported zero or negative growth. These include normally robust economies Germany, Sweden, Austria and South Korea. Another 21 countries, including Australia, recorded positive growth below 1%.
These include powerhouses Japan, Switzerland, Denmark, Britain and the USA. So sluggish GDP growth is now normal, even in well-managed economies. The entire world has been impacted by the war in Ukraine, China’s slowdown , global inflation , famines , refugee movements and increased focus on non-economic growth .
Annual GDP growth low worldwide Among those 32 OECD members, annual growth averaged just 1.19%, historically quite low. See chart below.
Australia currently ranks 14th among those 32 developed economies. That’s much lower than first, where Australia was placed during the Rudd / Gillard years, but a vast improvement on 30th which was the ranking under Scott Morrison . For more than a year now Australia has been the only economy in the world with top credit ratings, inflation below four per cent and continuous positive economic growth.
Looking after the workers Criticisms that the Albanese Government is not redressing the inequalities are answered by the national accounts file showing the percentage of the nation’s total income going to employees’ wages (ABS file 5206 table 7). See chart below. The workers’ proportion increased through the early Coalition period reaching a creditable 55.
2% in March 2016. Soon after Scott Morrison became treasurer, this dipped substantially and then continued to decline to an all-time low of 49.0% in June 2022, the quarter when Labor replaced the Coalition.
Since then, the share has risen steadily to reach a four-year high of 52.6% in last week’s figures, as shown in red on the chart. Mirroring that trajectory is the percentage going to corporate profits, shown in the green line.
This declined for a while under the Coalition, then steadily increased to a June 2022 high, and is now declining again. Most households managing well There is no support in the June accounts for any cost of living crisis, which is the current false narrative of the Coalition and its sycophants in the mainstream newsrooms. Household spending remains strong, despite a minuscule reduction in the June quarter.
See graph below. As the chart confirms, household spending is a remarkably stable variable. Claiming the Government is failing because the June outcome was fractionally below expectations, as did ABC News , the Nine newspapers and others, is just tawdry politics.
More important than the June quarter household expenditure was the full year to June, which was another record high. In fact since this ABS series began in 1959, the only year which wasn’t a fresh record was 2019-20 when the Morrison Government badly mismanaged the COVID downturn. ABC News abandons objectivity and truth The national broadcaster’s unhinged diatribe last Wednesday would have been rejected by Sky News as being too rabidly anti-Labor.
It asserted: ‘Westpac senior economist Pat Bustamante said the exceptional weakness in consumer spending in the quarter was a "big surprise".’ Exceptional weakness? Let’s see Actual consumer spending for the June quarter came in at $304,335 million, seasonally adjusted. That was the second highest in Australia’s history and only 0.
17% lower than the highest – which was $304,859 million in the previous quarter. If the fall had been 1.07% as in December 1978 when John Howard was treasurer, it might be called significant.
If it had been 4.65% down as in September 2021 when Josh Frydenberg was treasurer, it could be regarded as substantial. Or down 12.
81% as in June 2020 also under the last regime, that is arguably exceptional. But a decline of 0.17% from the all-time high is absolutely not "exceptional weakness".
June spending this year was $1,639 million higher than June last year and a thumping $8,027 million above June 2022, during the last failed regime. The ABC’s anecdotal evidence of business “doing it tough” came from a fruit shop owner. Evidently, they couldn’t find a video rental store.
Crisis well and truly over Of course, some families are struggling, as treasurer Jim Chalmers readily admits. But the proportion of the population in that parlous situation is currently lower than at any time in history. That’s confirmed by the published data on real wages , retail sales to GDP, the proportion of retail sales spent on luxuries, jobs numbers and percentages, underemployment and underutilisation rates, overseas flights, the number of new home loans , the value of new home loans, moderate demand for emergency accommodation , national debt hotline counselling figures and multiple other datasets.
Productivity remains a troubling outcome, as has been the reality for eight years now. Moves are currently in place to fix this. We shall see if they are effective in December.
And we shall see then if the economy expands for a 12th consecutive quarter — alone in the world with Belgium. Chalmers on track to join Keating and Swan as world’s best treasurer The latest economic news confirms the Albanese Government is responding to uncertain times remarkably well, as Alan Austin reports. Alan Austin is an Independent Australia columnist and freelance journalist.
You can follow him on Twitter @alanaustin001 . Related Articles Albo knows the price of yum cha in Marrickville Albanese's plan for 2024 should keep Labor ahead of Opposition While the media lies and distorts, Chalmers gets on with the job News Corp denies Albanese Government any credit for success As challenges mount, so does criticism of Albanese This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License Support independent journalism Subscribe to IA.
POLITICS BUSINESS MEDIA ECONOMICS ANTHONY ALBANESE Jim Chalmers #Auspol John Howard Scott Morrison Josh Frydenberg Alan Austin federal government Katherine Keenan GDP Share Article.
