Last week’s national accounts confirm Australia is back on a sound economic path, as Alan Austin reports.
WE NOW HAVE the September quarter growth numbers for gross domestic product (GDP) for 35 developed OECD members. Only three have had annual GDP growth increase steadily over each of the last four quarters: Austria, the Czech Republic and Australia.
Only three have had uninterrupted quarterly growth for the last four years: Belgium, Spain and Australia. Australia is still the only economy in the world with triple-A credit ratings, its jobless rate below 4.5% and median wealth per person above $250,000.
Australia’s economy grew 0.39% over the September quarter and 2.05% over the full year. That annual rate now ranks 13th in the OECD, up from 30th four years ago under the hapless Coalition. Australia is not at the top just yet, as it was under Kevin Rudd and Julia Gillard, but it is getting there.
Global situation continues to deteriorate
Examining the fortunes of the other 34 comparable Western democracies shows that times are tougher for economic growth than Australian commentators are acknowledging.
Some obvious causes of this are the war in Ukraine, the impact of U.S. President Trump’s destructive tariffs on global trade, the uncertainty generated by Trump’s constant threats and then chickening out, and the wholesale wrecking of the U.S. economy by the criminals in the White House as they plunder its wealth for the benefit of Trump’s family and his mates.
Just how bad the economy has become in the USA this year is impossible to measure, now that Trump has sacked the inspectors general and professional statisticians and has refused to allow critical indicators to be published.
The U.S. economy reported quarterly growth of negative 0.6% for this year’s March quarter, then a huge improvement of positive 3.8% in the June quarter. No serious observers believe that to be remotely accurate in view of all the other indicators of steadily deteriorating economic fortunes. Rather than post another fake figure for September, Trump has stopped reporting this number altogether, which some consider an admission that the economy is in deep recession.
The flow-on effects of this can be seen worldwide. Traditionally strong economies Japan, Ireland, Chile and Switzerland all recorded negative GDP growth in September, ending a strong period of robust growth for all of them.
Ireland has been the world’s stand-out economic success since the Global Financial Crisis, being the only OECD member to sail through the COVID downturn without one quarter of negative annual GDP growth. Australia copped three; most OECD members copped four or five. So to see Ireland go backwards is a bit of a jolt.
Germany recorded zero growth following a negative March quarter. Hungary and Lithuania both registered zero growth. Finland and Iceland recorded their second consecutive contractions, confirming they are in full recession along with the USA.
Productivity? No problem
Australia’s productivity continues to advance steadily, as proven by ever-increasing wages and profits. Neither would be expanding if productivity were stagnant or declining. Doomsayers in the mainstream newsrooms can be ignored.
The actual measure of productivity in the national accounts continues to show stagnation, but that line – as IA has endeavoured to show here, here and here – no longer measures productivity accurately. The closest proxy is overall consumption expenditure, including households and corporations, shown in column CJ of table 2 of last week’s national accounts. This has steadily increased since September 2021, reaching a new all-time high every quarter. See chart below.
(Data source: ABS)
How do Albo and Dr Jim do it?
Australia’s economic trajectories since the 2022 change of government confirm the analysis of multiple authorities going back to the early days of recorded history — that looking after the disadvantaged first and foremost is the key to building a strong economy for everyone, not just the bottom end.
IA now has six real-time indicators of reducing hardship across the nation:
The increase in the standard age pension in September to $28,072 brought this up above 35% of average earnings in Australia for the first time. This was below 33% under the Coalition.
The increase in the adult jobless rate in September to $20,634 maintains this above 25% of average earnings, where it has been for the last eight quarters. This fluctuated between 21% and 23% for most of the Coalition period.
The September quarter of this year saw more Australians travelling overseas than in any September quarter on record. Anecdotal evidence suggests these include more welfare beneficiaries than ever. The number – 3,227,300 – was 4.6% higher than the next highest September quarter.
The National Debt Helpline (NDH) has just released the number of emergency calls for the month of November, which was 12,086. This is the lowest November total since 2022 and the second-lowest this calendar year. The lowest was 11,554 in April. These are raw numbers from the NDH, so relative to population, the trend is even more emphatic.
The economy continues to create jobs at a cracking rate, with 42,200 jobs added in October and a thumping 160,300 created since the beginning of the year. Australia has now had its jobless rate below 4.6% for an impressive 47 months.
And finally, Australia’s national income increased over the September quarter, as it has done for all but two quarters since the 2022 Election.
More importantly, the Albanese Government has ensured that an ever-increasing proportion of this goes to wage and salary earners, and the excessive share handed to corporate profits by Coalition governments is being trimmed back.
The share of total national income going to wage and salary earners rose to 54.2%, the highest in more than nine years. That’s up from 49% at the time of the 2022 election. See chart below.
(Data source: ABS)
Treasurer Jim Chalmers is increasingly being emulated by other treasurers and finance ministers. We can see why.
Alan Austin is an Independent Australia columnist and freelance journalist. You can follow him on Twitter @alanaustin001.
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