PETER VAN ONSELEN: The shocking statistic that tells you everything you need to know about Labor’s economic management and the dire state of the economy
According to the latest quarterly economic figures, government spending grew seven times faster than the national economy.
That tells you all you need to know about the untenable mismatch between Labor’s economic strategy and the current state of the national economy.
And that excessive spending leads to inflation. That’s why the Reserve Bank of Australia (RBA) isn’t cutting interest rates to help Australians struggling with high living costs.
The economy grew by a meager 0.2 percent in the last quarter, while government spending rose by 1.4 percent.
It is no wonder that the RBA believes that government spending is the problem. The bank is sticking to its guns despite childish attacks from Chancellor of the Exchequer Jim Chalmers, who is trying to shift the blame away from himself.
And all this is happening amid the Australian economy’s lowest annual growth since the 1991 recession, barring the global blow of the pandemic of course.
Chalmers would have you believe that he has to overspend for economic reasons, but in reality his reasons for doing so are purely political.
The Labour Party must win the elections and hopes to buy your vote.
RBA Governor Michele Bullock wants state and federal governments to rein in spending to reduce inflation. Without their help, she will not cut interest rates for the time being.
And by the way, the latest economic figures show again that productivity is declining.
Finance Minister Jim Chalmers (pictured) is trying to shift blame from himself as Australia’s economy continues to falter
RBA Governor Michele Bullock (pictured) won’t cut interest rates unless governments stop overspending
I hope this Labour government appreciates irony. The latest economic data proves once again that the only reason we are not in a technical recession is high immigration.
Without that extra workforce, the economy would have been declining month after month for years.
The recession would last so long that it would be a depression if unemployment were not so low.
Yet the Labour Party is keen to tell anyone who will listen that it wants to reduce immigration in the coming years in a desperate attempt to ease the pressure on the housing market.
The Labour union has pledged to build 1.25 million new homes, but there is no chance they will meet that target in time.
Maybe lowering immigration is a good thing, maybe not. Either way, fewer immigrants increase the likelihood of a recession.
Not that Australians need a technical recession to feel the pinch. That’s already happening.
We must hope that unemployment does not rise in these times of low productivity, because if it does, the economic pain we are now feeling will only be worse.