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Issue No. 238 | 17 September 2004 |
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Going Gangbusters?
Interview: True Matilda Politics: State of Play Industrial: Capital Dilemmas Unions: Rhodes Scholars National Focus: Rennovating the Lodge International: People Power Economics: A Bit Rich History: Mine Shafts Safety: Sick Of Fighting Organising: Building a Wave Poetry: Anger In The Bush(es) Review: The Battle Of Algiers Culture: The Word On The Street
The Soapbox Politics Postcard The Locker Room Postcard
 The Abbott YouthInvest In Dignity!
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Editorial Going Gangbusters?
Both the Coalition's positive and negative advertising is focused on the holy trinity of low unemployment, low interest rates and low inflation. With the economy going gangbusters, why change horses? But how well is the economy working? Are these the indicators that reality define a healthy modern economy? And if we are going so well, why do so many Australians feel so squeezed? Let's start with the credentials - the indicators traditionally used to define a healthy economy Yes, unemployment is down; but this may have a bit to do with the way we define the unemployed; the Howard government has culled the ranks of the unemployed, not by finding them work, but by kicking them off the dole. It also defined as 'employed' anyone working even a couple of hours a week, even if they want to be working longer. It is also true that inflation was the scurge of the seventies, the dying days of fixed currencies. It is also true that inflation looks good in 2004, but it's low everywhere because in the absence protectionist policies and a floating dollar there's nowhere for the dollar to go. As for interest rates - the real issue is interest on what? The level of personal debt in Australia has sky-rocketed under Howard, while household savings rates have plummeted. Australians borrow more to own their home and, emboldened by the rising property process, then borrow even more against this value. We are now at a point where even a small increase in interest rates will be disastrous - thanks to Howard Government policies that have actively encouraged speculation and debt. As for the national debt, our current account makes the householders of Australia look thrifty - up 93 per cent since John Howard came top power. Where interest rates were once a lever of economic policy, they are now a national straight-jacket, ensuring we all remain in hoc to the finance sector. And Howard and Costello have the gall to trot it out as a reason to vote for them. And then there is tax - the Howard Government has imposed more than 32 new taxes and levies since 1996, the highest taxing government in Australia's history - putting the socialists to shame. But there's strong economic growth, the Coalition insists. Again, there is a story behind the statistics - and this is where the Howard Government should really stand condemned. Because under Howard and Costello, the years of prosperity have shifted the balance between wages and profits profoundly - wage as a proportion of the overall economy has fallen to its lowest level in a decade. Growth has been a boon for big business and executives who have pocketed millions; for wage-earners the story is different; working longer and harder to service the debt that delivers the profits back to the top end of town. It is this vicious cycle that leaves many Australian feeling they are on a treadmill and fast losing the race; if the economy is going so well, they wonder, why do I feel so squeezed? The answer to their question can't contained in an economic indicator or a five-second grab - which is why it is so hard to counter the Howard Government's biggest lie. The reality is that the economy of the 21st century is a highly complex and volatile beast, whose health can not be defined by a couple of economic indicators. And the key point of difference that tends to get lost in the statistics is that economies do not just run themselves. The policy differences between the ALP and the Coalition are significant - where Howard takes his hands off the lever, Latham wants to take responsibility. Initiatives like a Manufacturing Council to give direction to industry policy, support for working families, an Industrial Relations Commission that has some bite and curbs on executive excess are all part of the Labor mix. The shiny suits in the boardrooms may be panicking, but for working people a government that looked at the national economy as more than just a set of numbers would be a welcome relief. Peter Lewis Editor
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