Brutal economic facts face government


Parliament returns Monday and it will be interesting to hear whether obedient Government back benchers take up the chant which has become familiar during Question Time.

Like a well-programmed Greek chorus they praise the Government’s “stable and certain budget management” and asked minister whether by chance they agree with the assessment.

Invariably they do.

However, it will be difficult to justify the chant should it resume Monday for the final two weeks of Parliament.

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Stability and certainty are not prominent economic features at the moment and a welter of changes have made some projections in the budget in April look like betrayed wishful thinking.

There have been three cuts in official interest rates and another is tipped for the start of next year.

The Government has brought forward $3.8 billion in capital works — a relatively small outlay more for show than substantial economic stimulus.

The marketing element saw Prime Minister Scott Morrison give four interviews and issue five press releases promoting the move — all in the one day, Wednesday.

Other factors are denting the boast of stability and certainty.

What economic issues? Picture: Mick Tsikas/AAPSource:AAP

There is unprecedented household debt; some $7 billion in tax rebates at the start of the financial year had provided a glancing blow for the economy, well short of a salvation for families struggling with expenses.

Since the May 18 election the Reserve Bank of Australia has cut interest rates three times to a history-making 0.75 per cent. And there continues to be speculation another is possible.

Further, the central bank believes strong wage growth is a significant way off.

Unemployment is at an unsatisfactory 5.3 per cent.

Economic growth is at a speed which would be embarrassingly slow for a tectonic plate.

But point this out and you are a panic merchant, according to the government’s economic front of Mr Morrison, Treasurer Josh Frydenberg and Finance Minister Mathias Cormann — all of whom have been sounding the alarm on alarmists since about September.

However, all the back bench chanting and sneering at panickers will not alter the brutal economic facts facing Australia.

Talk now recession is absurd, but suggestions the economy is not behaving as the Government would like you to think it is will strengthen.



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