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article imageOp-Ed: Old economics — Australia’s macro policies are a bad joke

By Paul Wallis     May 28, 2011 in World
Canberra - If you’ve been thinking that governments, media and business are hopelessly out of touch about how people live and work, you don’t have to look hard for proof. Everything about living is now different, and policies are still coming from the 1950s.
In Australia, the retail sector is a case in point. Australia's retailers have been incredibly slow to get the message. They cut their own throats on a daily basis. The shop rents are excruciating. Commuters pay literally by the millimetre for travel, parking, and anything else anyone can dream up before they even get into the malls.
So it’s no great surprise that a lot of Australian online retailers are now getting huge market share. The bricks-and-mortar retailers are crying foul, complaining about people buying online from overseas, and don’t even seem to be aware of the large number of local online businesses.
Nor are the Australian media paying a lot of attention to the new retailers. For the last year, the talk has all been about buying from outside Australia, and not one single word about local online retailers has been mentioned in all that time. It’s like the world stopped in 1980, and these new-fangled things are unknown.
Arguably infinitely stupider, but undeniably far less productively, economists are now warning about high savings levels, now up to about 9.8% nationally. Apparently those nasty Baby Boomers, having realized that they don’t have enough money to retire, are daring to save their own money for their own purposes. They should, obviously, be keeping large corporations comfortable by spending mindlessly on overpriced things they can get elsewhere much more cheaply.
The Baby Boomer retirement issue is ridiculous enough. Australian governments were warned back in the 1970s about the inevitable effects of the Baby Boomer retirement years, and warned repeatedly afterwards. They did nothing. They didn’t take the tax off super, so Australian super is charged at 15% tax over the course of a policy. That’s as high as a credit card. Cumulatively, it takes a lot of hard cash out of a policy over 20-30 years, and now people are “surprised” that the Baby Boomers don’t have enough money.
A lot of figures have been used to define the “average median income” and other baseline numbers used to calculate economic parameters for policy purposes. As per usual, typical figures create averages out of a mix of Australia’s very healthy population of millionaires and everyone else.
According to the Australian Council of Social Services, about 10% of Australians are below the poverty line. They have never, ever, figured in any form of economic planning. Another 20% can be assumed to be borderline, “working poor”. So 40% of the population have always been effectively out of the game for all these highly sculpted analyses. Large numbers of people over 40 can’t get jobs, because employers simply won’t hire them. So there’s a very large pool of under-employed, experienced people, able to be retrained, and to train others, and we want to bring in foreign workers to do the jobs they should be doing?
These are the figures and “ideas” being used to make policy. Thinking isn’t one of the fortes of Australian politicians, and it’s definitely not the strong point of the people who write policy, either.
Home prices have exploded in Australia since the 1980s, and the market is now stagnant. Who wants to pay $500,000 for a cardboard box? A lot of private capital, which could have been out in the economy generating business, is stuck in mortgages and titles. People trying to get into the market have been kept out, and those in the market have been hit with boom prices which have meant if they sell, they’ve had to buy into a rising market, draining more free cash.
So the “experts” are worried about inflation. They warn that the Reserve Bank will have to raise rates from their current infantile level, set during the recession to help our bunny businesses stay in the game. They’re also worried about revenue, saying that because so many people are retiring, more people will have to be brought into the country to provide a tax base. A figure currently running around is a total population of 35 million, up from the current level of 23 million.
This is sophistry of the worst sort. It’s not only wrong after the event, it was wrong before the event:
If we bring in more people revenue will take a huge hit in infrastructure costs. Sydney, Melbourne and Brisbane are already creaking at the seams, and there’s no infrastructure outside the big cities worthy of the name.
The lack of skilled workers (we actually have a skilled labour shortage in Australia) is a reflection of decades of comatose education policies, and a much larger population means more education facilities, therefore more costs to government. People have been screaming at the tops of their voices since the 1960s for more skilled workers, and it just hasn’t happened.
The job situation isn’t much more impressive than this tale of ignorance, either. Full time jobs have been getting hammered for various reasons, not least of which is the total lack of comprehension of the office-bound idiots living in the 1950s. I was offered a writing/site editing job for which I would have had to put several contracts on hold to come into town twice a week to do something I could have done remotely from my own desk. That meant I would have had to spend a significant amount of money to dislocate my own work, which is worth far more, two days a week, for an entirely unnecessary job which I could have done in about 4 hours a week from home.
Employers aren’t thinking about working smarter. They’re thinking like treadmills, and it’s expensive. Australia has more computers and more computer-literate people than the US, and we’re still putting cars on the road and having the workforce scuttling around for hours a day, to do things that could be done from a mobile phone?
The workforce in Australia is 10 million or so people, more or less. That means, in theory, anything up to 20 million man-hours per day, 5 days a week, are being wasted, at least in theory, because people want to sit in offices and pay a fortune for parking and petrol? Get real.
Putting all those people on the road creates its own problems, particularly under a big population increase scenario. The logistics of putting more cars on the road alone would cost billions under the increased migration policy. Sydney is currently bumper to bumper from east to west and north to south, and all these morons can think of is more people to “make” money? It’d cost far more than it could make over time.
Meanwhile, Australia’s staggeringly inefficient energy industry has suddenly come out of its coma and realized that it needs more capacity. The result has been to add 20% and more to energy costs to pay for something they should have been doing since the 1970s. Business is going to take a hit, even at wholesale prices, and consumers, surprise, surprise, are going to have a lot less to spend. Will that impact the domestic economy, wombats? Australia, for those interested in arcane facts, is an energy exporter, on a very large scale.
There are solutions to all these problems. They should be obvious. There are ways of getting costs of services down. There are ways of training people without having to practically reshuffle the country to do it. There are ways of getting consumers to spend without them going broke in the process. There are much better revenue options than dragging people into the country and gouging them to make up for the mistakes of the past while simultaneously ignoring the needs of the Australian public for disposable cash.
I’ll put this in the Australian colloquial for those that need some advice:
Get your heads out of your arses, you bludgers, and try to find out what you’re talking about before you start giving advice to Buckley’s extended family in Canberra. There are no excuses for this mess. The answers are right under your noses, where they’ve always been. Starts earning your bloody keep for a change, and look at the likely results of these feeble, outdated, primitive do-nothing-useful-at-great-expense ideas before you start calling them policies.
For the retailers, financial and commercial sectors- While you’re at it, take a look at the date. It’s 2011, not 1811. Instead of killing demand with charges and dodging the realities of your own costs by passing them on to consumers, start creating demand with better business practices and removing charges.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
More about australia economcy, australian council of social services, Working poor, Australia infrastructure, australian population policy
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