Holding ever tighter to his Canberra bubble, Peter Hartcher again misled over the demise of Malcolm Turnbull on the weekend:
The former prime minister set out the basics during his appearance on the ABC’s Q&A show on Thursday: “The economy was strong. It’s one of the things I’m most proud of. When I became prime minister, I said I would deliver economic leadership.
“In the 2016 election, I campaigned on delivering jobs and growth. And we delivered both. Record jobs growth. The strongest jobs growth, in fact, in our nation’s history. Strong economic growth – the envy of the developed world.”
…Yet here was Turnbull, forced out of the leadership by his own party in the midst of this success. How could they? He professed to be baffled. He shouldn’t have been.
Economic good times have been insufficient qualification for prime ministers to hold their jobs and for governments to hold power in Australia for a decade now.
Beginning in 2007, every prime ministerial coup, every electoral loss in Australia has taken place against the same backdrop of economic success. Until Australia casually discarded the Howard government, the voters had rewarded every postwar government that presided over good economic conditions.
This is really poor analysis. A straw man, in fact. All the more so since MB has already pointed it out. When is it going to penetrate the thick skull of Canberra that there is NO ECONOMIC BOOM for households and than that is what is killing PMs?
Strong headline GDP no longer “trickles down”. According to the ABS, the real average compensation per employee fell another 0.4% in the year to June 2018 to be 4.2% lower since March 2012:
The below chart tracks quarterly real per capita HDI:
As you can see, quarterly real per capita HDI has fallen by 0.8% since June 2012!
Below is the same chart presented on a 4QMA basis:
Here, real per capita HDI fell by 0.3% in the year to June 2018 and has fallen by 0.2% since June 2012.
To add further insult to injury, the growth in real per capita HDI so far this decade remains anaemic at just 0.60% per annum, which is lower than the 1960s (2.34%), 1970s (1.86%), 1980s (0.90%), 1990s (1.30%), and 2000s (3.18%):
Why? Partly it has been the fall in the terms of trade. Secondly, the policy response has been terrible. At every turn it has treated a structural adjustment with cyclical remedies such as mass immigration which has jammed all of the adjustment down household’s throats via historically weak wages while capital got off free. The results are a political disaster.
The truth is households have not gone anywhere for six years and have hardly budged in ten. This is unprecedented in modern history and coming on the end of a boom is a slap in the face to a polity with high expectations.
Moreover, this is a fatal disconnect between Canberra (including Pete Hartcher) and the polity as the former only chases policies that keeps the headline boom running while the lived experience of falling living standards is first distressing then angering for voters when it is denied.
No political party can hold support for long under these conditions and PMs keep getting necked as result. Internecine party politics then makes it worse but they are symptom not cause.