Audience whoops at Joe the GDP clown

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From the AFR late yesterday:

Asked by shadow Treasurer Chris Bowen why Australian living standards were falling, Mr Hockey said “that is a ridiculous statement, and it’s wrong … because we have got asset values going up in Australia.

…”The incomes of Australian families are under significant pressure and the Treasurer hasn’t bothered to acquaint himself with the facts,” Mr Bowen said. “Mr Hockey should ask Treasury for a briefing on real net national disposable income per capita.”

…Saul Eslake, an economist at Bank of America Merrill Lynch, said it was “reasonable” to describe living standards as having fallen after four quarters of contraction in net national disposable income per capita.

“It’s a better measure of living standards than per-capita GDP because it takes account of change in Australians’ command over goods and services produced by foreigners as a result of changes in the terms of trade,” he said.

…”What Hockey’s doing is in essence confusing income statements with balance sheets,” Mr Eslake said.

Yes he is. And here is the chart:

ScreenHunter_7578 Jun. 03 15.21

That’s you getting poorer for almost four years! Even the sluggish AFR editorial can see it:

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Mr Hockey on Thursday claimed that rising asset prices meant it was ridiculous to suggest that living standards are falling. But that just reflects what his own Treasury secretary suggests is an unsustainable house-price bubble that has been inflated by record low interest rates. Mr Hockey’s dissembling here makes him start to sound like Wayne Swan.

Better find another horn to toot, Joe. Here’s one:

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.