Hoocoodanode? Not Victorian Treasurer Ponzi Pallas, via Domain:
Victoria’s high proportion of job losses is due to the nature of the state’s economy, rather than a failure of government stimulus, Treasurer Tim Pallas says.
“The reason why Victoria in particular is likely to suffer a difficult period is because … we have a high level of services in the economy,” he said.
About 77 per cent of Victoria’s economy is connected with services, Mr Pallas said, with the state relying on a significant proportion of jobs in hospitality, major events, tourism and international education.
Here’s the chart:
I’m afraid Ponzi Pallas is at fault. It’s all well and good to whine about the structure of Victoria’s services anus economy now. But for years we have warned and mocked it for being little more than a mass immigration Ponzi scheme which has driven up input costs and the Australian dollar such that anything other than the population-fed fluff economy could not compete. Manufacturing has flown out the door (to China) while the return “export” of education added no value. Literally nothing to its percentage of growth. What did take market share of GDP was banking, construction, health and professionals (think massage parlours and hairdressers) that have surged, beautifully illustrating all that matters to the mass immigration model. Warm bodies not to teach but leach off:
This left ordinary Victorians running desperately on the spot as their standards of living were crush-loaded through a lost decade:
Recall my post of several years ago, passing through the anus of the services economy:
It struck me as I sat there that it was wonderfully convenient to have a Thai massage joint just around the corner, especially given my local shops are not very large. I briefly surveyed the other shops and realised swiftly that what I was looking at was the lion’s share of the Australian services economy supply chain. Nearly all of it was directed not at the production of anything, nor the supply of anything, nor the inputs to some factory, but at servicing my person. Specifically, it was mostly targeted at various components of my body. There was an inordinately expensive organic grocer for my stomach. A retro barber for my head. A manicurist for my nails. A tatooist for my ink. A specialist wine purveyor for my tongue. A gift store for my birthday. A shop front personal trainer for my flab. An Asian tailor and presser for my clothes. Any number of cafes of course. And a real estate agent on every corner.
I realised that it was I that was the factory. My body, or more to the point, my mind, my intellectual property, was being supported my an extensive supply chain of services that plumped, fattened, thinned, preened, pressed, fluffed, trimmed and massaged me into the ongoing production of ideas.
There was one thing more that was obvious. These various services were not just the slapdash Aussies of yesteryear. There were no lackadaisical loafers working for the man and hanging for a smoko. Each of the services on display was a finely crafted specialist, an artisan in his and her craft, immensely serious with extraordinary attention to detail. The massage offered a limitless array of options right down to your chosen incense and its specific impact upon your chakras. The barber wore a perfect replica suit from the 1920s and sported enormous mustaches to match. The personal trainer rippled in the window. The grocer glowed with ruddy peasant health and one could almost smell the fresh loam on her fingers. The cafe’s were a rival for Tate Modern in their timberwork and ceramics, and one could literally choose a vintage decolletage in which to hang as if riding in a time machine.
The amount of effort and innovation going into finding a competitive edge for the privilege of servicing my sagging flesh was spectacular.
And that’s the thing. All of these local shops are a hive entrepreneurial beavering. But all of them are directed inwards in an endlessly dividing paradox of insignificance. None of them is tradable, as services mostly are not, so none has the chance to flower much beyond the local shops, let alone nationally or internationally. That poses a problem for the economy because if all you ever do is service one another in more elaborately infinitesimal detail then there is no actual wealth generation going on. There was no organic capital generation, no capital deepening nor breakthrough’s in efficiency. The capital that drives this machine by definition comes from outside of it in the form of a visitor, a new buyer of a local asset or someone that has borrowed to invest.
And so, here VIC is today, destiny complete, as the external capital driver is disrupted. As it always is eventually. A prolapsed anus services economy, with mass unemployment, and no capital depth with which to suck it up!
While some will argue that the policies were national not Victorian, Ponzi Pallas massaged the aperture fulsomely throughout.
