Tag: Ross Gittens

Informed Comment

Big business cries poor on wages even as profits mount – Pearls and Irritations

Businessman figurine looking at the growth of stacked coins. Saving money for finance accounting.

Because they are so low-paid, and mainly part-time, these people account for only about 11 per cent of the nation’s total wage bill. So, as the commission says, the pay rise ‘‘will make only a modest contribution to total wages growth in 2023-24 and will consequently not cause or contribute to any wage-spiral’’.

But that’s not the impression you’d get from all the wailing and gnashing of teeth by the main employer group, the Australian Chamber of Commerce and Industry. It claims ‘‘an arbitrary increase of this magnitude consigns Australia to high inflation, mounting interest rates and fewer jobs’’.

 

Source: Big business cries poor on wages even as profits mount – Pearls and Irritations

LNP Government

PwC Scandal: Accountants used to be boring, then the government asked them to do its job

Illustration: Simon Letch.

One of the attractions of paying outside consultants for advice is that, to ensure repeat business, they tend to tell you what they think you want to hear. Whether in auditing or consulting, the notion that anyone can buy genuinely independent advice is a delusion.

Somehow or other, the “smaller government” policies of recent decades have left many businesses believing they are no longer required to obey the law.

 

Source: PwC Scandal: Accountants used to be boring, then the government asked them to do its job

Informed Comment

We’ve got more, but are we better off?

It probably won’t surprise you that the Productivity Commission is always writing reports about … productivity. Its latest is a glittering advertisement for the manifold benefits of capitalism which, we’re told, holds The Key to Prosperity.

We’ve got more, but are we better off?
Informed Comment

Federal budget 2021: Josh Frydenberg, Scott Morrison’s good effort at marketing misses main chance

Treasurer Josh Frydenberg and Prime Minister Scott Morrison in the House of Representatives.

Politically, this budget had to offer a convincing response to the report of the royal commission on aged care. Reports have suggested fixing the broken system would take extra spending of about $10 billion a year. He settled for spending an extra $3.5 billion a year. Major patch-up at best. The scandals will continue. Politically, Morrison had to make this a women-friendly budget, to prove he valued women’s contribution to the economy and remove impediments to their economic security. Making childcare free  would have been a big help to young families, as well as greatly increasing employment. That would have cost about $2 billion a year. Morrison settled for $600 million a year, or one childcare-using family in four by excluding the great majority, who have only one child in care.

The truth is, at this stage the economy is still running on the stored heat of last year’s massive budgetary stimulus, much of which has still to be spent. The purpose of public-sector stimulus is to get the private sector – households and businesses – up to ignition point, so it keeps going under its own steam.

That hasn’t happened yet. So the purpose of the further stimulus in this year’s budget is to keep the kick-starting going until the private sector’s engine gets going.

Source: Federal budget 2021: Josh Frydenberg, Scott Morrison’s good effort at marketing misses main chance

Informed Comment

There’s no excuse, we need full employment now
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Government needs to create jobs to lower unemployment and raise wages. It’s interest however to keep unemployment and keep wages low. Then blame the unemployed

And here’s something else to remember: the Reserve has begun warning that we won’t get back to meaningful real wage growth until we get back to full employment.

There’s no excuse, we need full employment now
LNP, LNP Economic Management, LNP Government

Budget 2020: Josh Frydenberg’s two-class tax cut is like no other we’ve seen

Lower income earners will get a smaller cut which will be temporary.

Frydenberg will be remembered as the inventor of the two-class tax cut.

Budget 2020: Josh Frydenberg’s two-class tax cut is like no other we’ve seen
Informed Comment

Frydenberg has changed his tune in a very Liberal way
The Treasurer has changed his tune on using the 'dirty' word stimulus.

And you see that this “Liberal values” business-directed, tax-reducing approach to fiscal stimulus explains why the budget didn’t include the two measures economists most wanted to see because they’d do most to boost consumer spending and jobs: a big spend on social housing (a no-no under the rules of Smaller Government) and a permanent increase in unemployment benefits (almost every cent of which would have been spent). The risk with Frydenberg’s politically correct stimulus is that too much of it will be saved. He needs to bone up on Keynes’ warning about the “paradox of thrift”.

Frydenberg has changed his tune in a very Liberal way
Informed Comment

Thinking economists are grappling with why their profession has made our lives worse
Illustration: Andrew Dyson

By sanctifying selfishness, it has undermined community-mindedness and the role of co-operation in advancing our mutual interests. Voting has become a simple matter of “what’s in it for me and mine”, while businesses and industries have been licensed to lobby for preferment at the expense of everyone else. “In recent decades the balance between these instincts [of competition and co-operation] has become dangerously skewed: mutuality has been undermined by an extreme individualism which has weakened co-operation and polarised our politics,”

Since the late 1970s, however, Americans have talked less about the common good and more about self-aggrandisement; less “we’re all in it together” and more “you’re on your own”. There’s been “growing cynicism and distrust toward all the basic institutions of American society – governments, the media, corporations” and more.

Thinking economists are grappling with why their profession has made our lives worse
Informed Comment

Coronavirus: Pandemic could kill off governments’ credit rating bogeyman
Reserve Bank governor Philip Lowe during a Senate select committee hearing.

At the parliamentary hearing, he said: “From my perspective, creating jobs for people is much more important than preserving the credit ratings. I have no concerns at all about the state governments being able to borrow more money at low interest rates. The Reserve Bank is making sure that’s the case.” At one level, this is a sign of the momentous times we live in. Governments around the world are borrowing massively as the only way they can think of to overcome the coronacession. With interest rates on long-term government borrowing at unprecedented lows, what have they go to fear?

Coronavirus: Pandemic could kill off governments’ credit rating bogeyman
Informed Comment, Uncategorized

Tribal prejudices about wages guarantee a weak recovery

Wage growth has recorded its lowest growth since records were kept. Illustration: Greg Newington

 

Wage growth has recorded its lowest growth since records were kept. Illustration: Greg NewingtonCredit:

 

Wage growth is the key to recovery because wages are the greatest single driver of economic activity and employment. But rather than thinking of ways to get wages up, both sides are working on ways to slow them further.

Not that private sector employers will need any help. They always skip pay rises during recessions because, afraid of losing their jobs, workers know they’re in no position to argue.

But, while as individuals, firms benefit from cutting the real value of the wages they pay, especially when all of them do it at the same time, they all suffer because the nation’s households have less money to spend on the products of the nation’s businesses.
Robbing Peter to pay Paul ain’t stimulus

via Tribal prejudices about wages guarantee a weak recovery

LNP Economic Management, LNP Government, Uncategorized

Morrison’s not doing nearly enough to secure our future

Treasurer Josh Frydenberg and Prime Minister Scott Morrison will need to spend more for longer.

via Morrison’s not doing nearly enough to secure our future

Fight against Fake News, Fighting Fake News, Uncategorized

Old Dog Thoughts- LNP is reverting to form

Who is Josh Frydenberg kidding? Margaret Thatcher and Ronald Reagan.

Fighting Fake News with REAL; 29/7/20; Ross Gittens, Racial treatment of 10 year olds;

Informed Comment, Uncategorized

COVID setbacks in Sydney and Melbourne mean Morrison must keep the money flowing

Illustration: Simon Letch

via COVID setbacks in Sydney and Melbourne mean Morrison must keep the money flowing

Fight against Fake News, Fighting Fake News, Uncategorized

Old Dog Thoughts- Morrison denies it a Duck

Fighting Fake News with REAL; Humour, Truth in Humour; Foreign Profit off Australians; Scott Morrison’s Duck No Cuts to the ABC

Informed Comment, Uncategorized

Productivity problem? Start at the bottom, not the top

Look to Australia's largest businesses rather than government when it comes to productivity.

Since 2002, Quinn showed, the most productive Australian firms (the top 5 per cent) had not kept pace with the most productive firms globally. In fact, Australia’s ‘productivity frontier’ has slipped back by about one-third. The best of ‘Made in Australia’ hasn’t kept pace with the best of ‘Made in Germany’, ‘Made in the Netherlands’ or even ‘Made in America’.”

And then there’s the other 95 per cent. In the past two decades, their output per hour worked has barely risen. So 19 out of 20 Australian firms don’t produce much more per hour than they did when Sydney hosted the Olympics.

A Productivity Commission study has found that half the slowdown in productivity improvement in the market economy in recent years is accounted for by manufacturing. A separate survey of management practices in manufacturing firms found that Australia’s managers rank below those in Canada, Sweden, Japan, Germany and the US.

The drop we’ve experienced is “not the fault of employees: there are simply fewer good opportunities available. According to Treasury’s analysis, much of the drop in job-switching is because workers are less likely to transition from mature firms to young firms. With fewer start-up firms, it stands to reason that there are fewer start-up jobs.”

Productivity problem? Start at the bottom, not the top

Informed Comment, Uncategorized

Don’t bank on actually seeing the promised budget surpluses

Business as usual? Illustration: Matt Davidson

via Don’t bank on actually seeing the promised budget surpluses

Informed Comment

The great diversion: election arguments about tax

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The great diversion: election arguments about tax

Informed Comment

The one great drawback from 27 years of economic sunshine

When Ross Gittens offers Morrison a narrative against perception(ODT)

via The one great drawback from 27 years of economic sunshine

Informed Comment

Why so many businesses are behaving badly

“Entitlement: When the Rich and Powerful feel it’s their Right” (ODT)

It’s an important, though sensitive, question for economists since their simple “neo-classical” model of markets predicts firms won’t mistreat their customers because, if they did, they’d lose them to a competitor.

Sims offers seven reasons for this evident “market failure” – a term economists use to acknowledge when real world markets fail to deliver the benefits the textbook model promises.
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via Why so many businesses are behaving badly

Informed Comment

The social sciences: so essential we neglect them

This is what  ultra-Conservatives rail against and want our universities to be rid off HASS Humanities and Social Science degrees. They were poison to the Nazis as well the  Catholic Church which banned Catholics from studying or reading Sociology it’s too dangerous for them the Curch that is. In fact the social sciences can cause individuals to break down. Sociology likens  social life of men as sitting on a mop bucket and caught by the balls. When trying to stand putting ones foot on the pedal each time trapped. By revealing the mop buckets of our social life social science has the ability to set one free and that for conservatives is dangerous. (ODT)

It makes no sense. As Senator Arthur Sinodinos said while minister for industry, innovation and science, “the advancement of the Australian economy relies on robust research from physical science and social science alike.

Not being ones to boast, the social scientists would like you to know their former students pretty much run the world. They’ve produced the majority of ASX-listed chief executives. Probably just as true of the public service and politicians.

Add the arts and humanities, and most of the tertiary-educated workers in Australia have HASS degrees. Almost three-quarters of university students are in HASS courses. Most of the overseas students paying full freight for their degrees – and now constituting one of our top export earners – do HASS courses, particularly business courses.

The social sciences: so essential we neglect them

Jobs Jobs

Let’s put the hype aside, jobs growth shifts from extraordinary to ordinary

But while we’re deflating the government’s triumphalism, its critics also need taking down a peg. They like to remind us that the official unemployment rate understates the true extent of worklessness. Specifically, it fails to take account of under-employment – people with part-time jobs who’d like to work more hours.

All that’s true. But when you correct the unemployment rate (for May) of 5.4 per cent by adding the underemployment rate of 8.5 per cent to give a broader measure of labour “underutilisation” of 13.9 per cent (as, admittedly, the bureau encourages you to do), you’ve gone from understating the problem to overstating it.

via Let’s put the hype aside, jobs growth shifts from extraordinary to ordinary

Informed Comment

Budget 2018: This budget is too good to be true

Much of this rapid return to “the old normal” rests on the government’s forecast that the past four or five years of exceptionally weak growth in wages will end next month. Wage rises will be a lot higher in 2018-19, higher again the following year and still higher, at 3.5 per cent a year, in the following two years and for the remaining years out to 2028-29.

I think this is the basic explanation for the budget’s forecasts and projections, prepared by that well-known Italian economist, Rosie Scenario.

via Budget 2018: This budget is too good to be true

Informed Comment, Uncategorized

Banking royal commission: Misbehaviour shows power of KPI’s

 

Amid all the reluctant truth-telling at the banking royal commission, one big lie has yet to be apprehended: shame-faced witnesses keep admitting they put their shareholders’ interests ahead of their customers’. Don’t believe it.

via Banking royal commission: Misbehaviour shows power of KPI’s

Informed Comment

A bigger, better public sector will secure our future

 

The strong growth in construction employment can be attributed mainly to a boom in infrastructure spending by the ...

via A bigger, better public sector will secure our future

Informed Comment

Ross Gittins: ‘Why the cost of living is not as high as you think’

When the consumer price index is dissected, the real problem is the rate of increases.

Source: Ross Gittins: ‘Why the cost of living is not as high as you think’

Neoliberalism

The neoliberalism of Margaret Thatcher and Ronald Reagan has run its course

You can see it overseas in the electoral popularity of Bernie Sanders and Jeremy Corbyn, and the anti-establishment revolts in the Brexit vote and the election of Donald Trump.

Source: The neoliberalism of Margaret Thatcher and Ronald Reagan has run its course