Coalition pledges weak jobs, lower wages and higher taxes

PM Scummo begins his re-election pitch today with a speech based upon fantasy:

Labor said we would fail, but we nailed it – 1.1 million jobs within five years and we are now past 1.2 million jobs.

Today, I am making a new jobs pledge for our government, to see 1.25 million jobs created over the next five years.

…[with] continued good management, our debt can be eliminated within the decade.

At this next election, only half of those of voting age will have experienced a recession during their working lives.

So it is important to remind all of us that our economy cannot be taken for granted.

Over five years, we have repaired Australia’s fiscal position. We did this without slowing the economy or harming jobs growth.

You’ll be deciding the economy you and your families – your children and grandchildren – will live in for the next decade. And the consequences will be real.

Labor and Mr Shorten are offering you a weaker economy to live in, held back by higher taxes.

The jobs pledge is a nothing benchmark. As we pointed out during the Abbott years, the one million pledge is weak jobs growth amounting to barely enough to absorb population growth:

Job growth since September 2013 has averaged 18,200 a month, which is marginally above the 17,230 jobs per month created in the decade to September 2013, which also included the fallout from the Global Financial Crisis.

However, this level of jobs creation is off a much bigger base than was experienced previously. That is, there were 12,173,000 people in the labour market in September 2013, versus 11,253,900 in September 2008 and 9,985,900 in September 2003.

Australia’s population is also growing quickly, which (other things equal) means that employment must grow faster to absorb the additional workers.

At current rates there will be another 800k foreign workers in Australia over the next five years leaving a paltry 200k to split between the existing population.

As we have observed for the past five years, this level of influx of foreign workers destroys industrial relations rules. It is no wonder then that the underemployment rates was virtually unchanged from November 2013 to November 2018 – i.e. 13.8% versus 13.4% – nowhere near low enough to generate wages growth.

The second pledge of paying down net debt is preposterous, especially so when coupled with employment commitment. Over the next five years China will almost certainly slow and commodity prices fall, as well as the world experience a shock of some kind necessitating greater fiscal spending and deficits. This is underlined by the fact that in the past year government created 304,500 jobs, whereas private sector employment contracted by 92,700 jobs. There are no private sector drivers for jobs growth with mining carrying over-capacity and the much vaunted services economy paralysed by deleveraging and the RBA out of bullets.

As that process intensifies and the private sector retrenches, if government runs larger surpluses while Australia runs external deficits then the basic calculus of GDP guarantees that growth, jobs and budget revenue will fall. Yet somehow Scummo is pledging to find an additional 35bn per annum to pay off the $350bn in net debt.

It is also a straight lie that the Coalition has not raised taxes since 2013, they have marched higher, via Gerard Minack:

And they will continue to do so thanks to bracket creep and a Coalition schedule of tax cuts that heavily favour the wealthy.

The one pledge that we can expect the Scummo Government to deliver on in spades is a boom in economic lies.

Comments

  1. “1.25m jobs”
    — utter BS. Any jobs the Govt creates will be of the ‘make-work’ variety i.e. useless, little more than a form of welfare

    “…[with] continued good management, our debt can be eliminated within the decade.”

    — What a croc. The chances of anyone alive today seeing even a dollar of debt reduction is somewhere between zero and f*ck all. Govt and State debt is headed to the moon and will end only with the implosion of the existing monetary system. Period.

    • Gov debt is not an issue
      What they are going to do with explosion of household debt?
      Make credit even more loose

      • Govt debt is not an issue …. until it is.

        The day it becomes an issue will be the end. It’s that binary.

      • It only becomes an issue when economy collapses for some other reason but it cannot hurt otherwise fine economy (hurts only when economy is driven by gov deficit spending only)

    • Total gov debt is around $550 million. That’s around $22,000 per Australian. It’s a lot to pay back.

      • TailorTrashMEMBER

        Rent out the garage on ABNB …work nights as a dabbawallah for Uber eats …..easy mate !

      • Throw in State debt and the number is a lot larger. The Debt Clock reckons $850bn, but not to worry, we have immigration to help with that

  2. NOM of 200,000 per year over 5 years means he’s found jobs for the 1 million migrants. This excludes ~2 million already here on temporary, bridging and “student” visas.

    • truthisfashionable

      I assume it would also exclude the Australian born kids turning 18 or graduating uni over those same years. The numbers either don’t add up, or are just absolutely horrifying for an economy.

  3. TailorTrashMEMBER

    Every courier driver that drops anything on my door step these days is an Indian…..Scomo will need to create more courier driver jobs to match his immigration policy
    ….as will Bill.

    • I’ve had the same African chap deliver a few times and he is actually a lovely, pleasant and charming fellow.
      Though he seems to be the exception.

    • That’s ok because more couriers means more petrol stations and that means more jobs for Indian males as they are the ONLY people capable of working in petrol stations in this country (seriously since moving back to oz 2 years ago I have only ever seen Indian males working in servos)

  4. In september 2013 when Coalition got in there were 697k unemployed people, now there are 667k
    so in 5 and a half years of unprecented housing and credit boom they mannaged to create only 30k jobs more than just to keep where Labor left.
    if we dig abit deeper we will see more part time and more slave jobs like deliveroo and uber, and less manufacturing jobs

    and to do this poor job of creating 30k extra jobs they managed to increase household debt by $600b corporate debt by $1.2t and government debt by $150b

    so each extra job costed around $65m to create
    well done

  5. Youth employment runs at 20 % plus (If my memory serves me correctly) .

    My Millennium Man (Born in 2000i)

    Is Clucked.

    • I’m starting to think that’s one way out of this without becoming Argentina, Ireland, etc in a fair way and using the money for some nation building projects (i.e water infrastructure around Australia, HSR to replace airport fare around the capital cities, etc). Would mean a boost in wages and with incentives to pay off debts over time would repair the household balance sheet. Totally uneconomic projects due to their initial cost but could pay off for many decades for future generations. Most inventions we enjoy today weren’t economic initially either (e.g electricity grid, sewerage, etc) but became economic over time. The other way of course is to loosen lending standards to the limit of serviceability again and make sure that new entrants keep coming in to offload the new debt to (i.e. the old equilibrium) keeping the debt to gdp ratio constant while actual debt levels (and therefore money as income) rise. Different winners and losers though.