MORRISON AND FRYDENBERG DESERVE AN ‘F’ FOR ECONOMIC MANAGEMENT
December 13, 2019
The Morrison Government’s biggest failure this year has been on the economy.
With 2019 coming to a close and the mid-year budget update on Monday, and after promising a “stronger economy” at the election, the Morrison Government’s actual economic record is defined by slow growth, higher unemployment, stagnant wages, pathetic productivity and business investment, and record household and public debt.
The Liberals and Nationals end the year with annual economic growth below average, below forecasts, below what it was before the election, below what it was before Scott Morrison and Josh Frydenberg took over, and below what it was when Labor left office in 2013.
Since the Budget:
- GDP and wages growth have fallen well below Budget forecasts;
- The unemployment rate has increased above Budget forecasts;
- The RBA has downgraded its growth forecasts three times;
- The IMF has downgraded Australia’s growth forecasts, with downgrades for this year four times bigger than for advanced economies; and
- The OECD has downgraded Australia’s growth forecasts, with downgrades for this year twice as large as for global growth and G20 economies.
Since the election:
- Economic growth for 2018-19 has deteriorated to its slowest pace since the Global Financial Crisis;
- Wages growth has continued to stagnate;
- Retail trade volumes recorded their worst result since the 1990s recession;
- Business investment fell to its lowest levels since the 1990s recession;
- Household debt rocketed to record highs of nearly 200 per cent of disposable incomes;
- Net debt has skyrocketed to new record highs;
- Consumer confidence has collapsed to be well below average and is down 6.1 per cent since the election; and
- The RBA has cut the official interest rate three times, to be one quarter of what it was during the ‘emergency lows’ of the Global Financial Crisis.
In the last month alone:
- The economy slowed further in the September quarter, with annual growth well below trend;
- GDP per capita has stalled, with the economy barely growing faster than the population;
- The private domestic economy is going backwards and has experienced the biggest decline since the Global Financial Crisis;
- Consumption is barely growing, recording its slowest growth since the Global Financial Crisis;
- Total private business investment is going backwards;
- Multifactor productivity fell for the first time in eight years and labour productivity declined for the first time on record;
- Weak wages growth has slowed further to 2.2 per cent;
- The RBA has said weak growth under the Liberals is the “new normal” and has contemplated unconventional monetary policies; and
- Monthly retail trade deteriorated further in October after a poor September quarter result.
Scott Morrison and Josh Frydenberg’s claims that the “the fundamentals of the economy are strong” only look more out of touch by the day.
Ordinary Australians are paying the price for the Liberals’ and Nationals’ incompetence and inaction.
The Morrison Government can and should support the economy without jeopardising the surplus.
Monday’s MYEFO is Scott Morrison and Josh Frydenberg’s chance to develop a comprehensive plan to support Australian families and pensioners, and to get things moving again.