Thursday, 4 June 2009
If the coalition had a real economic attack on the government, yesterday’s GDP figure would not have caused problems for it.
But since they don’t, it did. In a way, the coalition’s problem with the headline GDP growth in the March quarter was not so much that it was positive, but that it wasn’t positive enough. If it had been, then Turnbull would have been able to say that the government had thrown the country into debt for nothing as the economy was growing anyway. As it was, it was just positive enough for the government to claim it had made a difference and just weak enough that the modest impact of the stimulus had made the difference between going forward and going backward.
In reality, the economy is going backward. Stevens wasn’t making it up. Of the 0.4% growth recorded in Q1, the largest contributor (1.6%) was from the slump in imports (down 7%), which a little confusingly, perhaps, translates to a positive movement in GDP. As Stephen Long commented on Lateline, a major part of this comes from a collapse in business demand for capital goods, with machinery and equipment investment down a hefty 10%. Real national disposable income, a broader sign of the economic health of the nation was down 1.0%. The best that could be said from these numbers is that although Australia’s industrial capacity, like the rest of the developed world, is hollowing out, exports are at least getting some benefit from the one major country where it is not, China. But as far as business goes, the numbers look like a recession and a fairly nasty one at that.
So why didn’t the coalition point that out? At yesterday’s press conference, Turnbull tried to make a feeble attempt of saying the figures weren’t as good as they seem, with some little graph on a bit of paper that hardly anyone could read. Unfortunately, there is little purpose in pointing out the economy is not looking great as they have no solution to fix it. Instead the Great Economic Debate has been between the battle of which you are more afraid of: the recession now or the debt later. When the news was really grim, Labor’s hand-outs were OK, when the economy seemed to be not too bad, the coalition’s debt worries gained more ground.
Where that real economic debate has disappeared to was highlighted elsewhere in the government, with Gillard’s slap-down of the unions. The unions got the roll-back of WorkChoices, a minor reform that business never used anyway. What they will never get back is collective bargaining and their relevance. ACTU secretary Jeff Lawrence warned that the Labor Government had to play its role if it wanted a partnership with the unions. What for? As shown by the steady fall in labour unit costs and the first decline in wages and salaries in nearly two decades, the government is getting employees to take the strain without even needing the unions to do the work for them. Victorian Trades Hall Council secretary Brian Boyd said that Labor couldn’t rely on the “mass mobilisation of workers” at the last election to be repeated at the next. Ah, the delusions of the dying. The only role “workers” played in the last election were on the telly as Workchoice victims, a tactic only possible when the unions were a spent force.
But if the unions have no role, neither do the parties that called on them, or opposed them. Labor put a positive gloss on the numbers yesterday, but ironically so did the coalition. Neither could talk about the downturn being anymore than a passing unpleasantness because neither have anything to say if it is not. So we get the true meaning of spin: carrying on with the message when in reality there is nothing to say.
Posted by The Piping Shrike on Thursday, 4 June 2009.Filed under State of the parties