Crikey



Ignore the anecdotes — jobs growth is returning

Once again the doom and gloomsters and the Hanrahans will have to eat their jobs statistics and reflect on their beliefs about the Australian economy. Strong jobs data from the Australian Bureau of Statistics backs the Reserve Bank’s decision last week not to cut its cash rate. Unless there’s a significant worsening in Europe or the local jobs market in the next few months, you can just about rule out any more rate cuts. In fact, a rate rise might be in the offing later in the year if we get more months like January for jobs

The figures out this morning show that a total of 46,300 full and part-time jobs were added last month, more than offsetting the loss of 29,000 in December that brought forth a wave of handwringing and grim predictions. That was the largest number of jobs for over a year.

The employment data adds to the growing impression that the Australian economy is gathering pace after being whacked last year by the floods and cyclone Yasi in January, the uncertainty from Europe and a slide in business and consumer confidence.

There were strong performance right across the country. A big fall in the unemployment rate in NSW — down from 5.6% to 5.2% — is great news from the country’s biggest state that for so long has underperformed courtesy of a disastrous Labor government. Victoria was steady at 5.1%. Queensland was also steady at 5.4% but there was a big rise in participation, nearly half a percentage point, led by a surge in female participation. WA was also steady — and still the best in the country — at 4.1% but that also saw a big rise in participation, 0.7%.

The unemployment rate, seasonally adjusted, dipped to 5.1% (5.2% on the smoothing trend basis).

There’s been incessant publicity about job losses lately — the 500 jobs lost Qantas today and the 1000 at the ANZ earlier in the week are the latest examples. AAP even produced a table of recent job losses this morning showing roughly 6000 jobs lost or could be lost. Every one of those losses have generated headlines, grim productions, moans and groans from unions, employers and those involved. And everyone represents a real person facing dislocation.

But as Ross Gittins pointed out in an excellent piece yesterday, anecdotes don’t tell anything like the full story. Compare those 6000 to the 12,300 full-time jobs created in January and the more than 46,000 new jobs for the month. There are no anecdotes floating around about those.

The jobs market is weak in sectors like finance, retailing and some areas of manufacturing. But it is strong in others (and sometimes it’s strong in some sub-sectors of retailing and manufacturing, too). That is constantly overlooked by the jobs alarmists who overcook the numbers or the trends in the economy.

The January numbers also reversed the trend in December, when it was the absence (or, rather, non-seasonal appearance) of part-time jobs for females in the group 15 to 24 that helped produced the sharp drop in that month. “The increase in seasonally adjusted part-time was driven by an increase in female part-time employment whereas the increase full time employment was driven by an increase in male full-time employment,” the ABS said.

The ABS reported an increase in the labour force participation rate, which has been trending lower since the end of 2010: 0.1 percentage points in January to 65.3%. In fact, the economy generally has started 2012 much stronger than a year ago when it was flattened by the supply shock and boost to inflation delivered by the floods and cyclone.

While Europe is still a big concern (and why the market tanked this morning), the economy is solid, as new RBA Deputy Governor Phil Lowe said in his first speech for 2012 in Sydney:

… the Australian economy started 2012 in relatively good shape. Growth has been around trend and inflation is consistent with the target, and there are reasonable prospects for this to continue. We also have much more flexibility to deal with unfolding events than almost any other developed economy.”

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61 Responses

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  1. Good work. Thanks B, G.

    by Bob Robson on Feb 16, 2012 at 2:04 pm

  2. The great challenge of this area of economic management is that it is better for everyone if resources can move to to where the need is but the people whose role is redundant bear all the pain. And they’re the ones covered forensically on the evening news. The pain suffered by redundant workers is what gives economic rationalists a bad name. The economic benefit whish is greater than the loss but spread across many people is not so apparent.

    It is the government’s role to manage the transition as it affects communities. As industries have their heyday and then decline we should not resist the change but manage it.

    by David Hand on Feb 16, 2012 at 2:49 pm

  3. I agree with Gittins and yourselves that sensational staffing cut stories don’t indicate much of anything. But neither, I submit does ABS unemployment figures. These have been comprehensively rorted over the years to under report the issue. For example, if ABS survey respondents have been employed in a paid or unpaid capacity for as little as one hour in the previous fortnight, they’re counted as “employed”.

    Also, people who may have been retrenched or have otherwise lost their job who have a working spouse on average wages and, perhaps, a few thousand in assets and savings probably won’t (or can’t) register as unemployed because they’re not entitled to any income support or employment service support. The same applies for recent school leavers and young people up to the age of 25 who reside with working parents. Substantial numbers of people in those situations won’t be registered as unemployed so they won’t influence the participation rate making the unemployment rate will look artificially small.

    It’s one thing to ask people not to draw conclusions from sensational headlines, but let’s not swallow the little ABS employment statistics tell us uncritically and ask us to believe we’ve never had it so good.

    by Damien on Feb 16, 2012 at 2:51 pm

  4. Perhaps the coalition have forgotten that Ansett Airways completely closed down during their watch? Now how many jobs did that cost?

    … It is found that due to sectoral multiplier and flow-on effects each job lost in such an important sector leads to a loss of approximately 3 extra jobs in the economy as a whole. The empirical results are broadly consistent with previous studies. Overall, the Ansett collapse brought about an indirect loss of 54880 jobs in 105 sectors of the Australian economy”

    See - Ansett? Discussion Paper No. 137
    By Valadkhani, Abbas
    Google it!

    by David Allen on Feb 16, 2012 at 2:54 pm

  5. small thing - ‘employment data adds’ should be ‘employment data add’. You say anachronistic pedant I say Orwell.

    by SBH on Feb 16, 2012 at 3:07 pm

  6. Senior Treasury officials in estimates just said a similar thing today in response to Greens Senator Larissa Waters questioning of mining industry claims of them having a ‘jobs multiplier effect’.

    Dr David Gruen, Executive Director of the Macro Economic Group, stated;

    In a well-functioning economy like ours, with unemployment close to its lowest sustainable rate, it is not the case that individual industries are creating jobs, they are simply re-distributing them… there really isn’t a multiplier.”

    by Modus Ponens on Feb 16, 2012 at 3:18 pm

  7. Who are the circulator’s of negative anecdotes prey tell? The usual culprits? I am surprised that this story at least attempts to set the record straight despite the expected standard facetious barbs. No good news story without a few put-downs.

    by GocomSys on Feb 16, 2012 at 3:21 pm

  8. What my be lost on some is that the Oz economy is undergoing a transformation that may end up making Keating’s re-modelling look pedestrian in hindsight.

    There are three significant factor, viz; the economic mess of most of the developed nations, the resources boom and its effects on our dollar and consequently every exposed industry, and fundamental change brought about by technology, largely the internet.

    The days of relying on housing and retail are long gone, and should not be missed. Relying on housing is unsustainable, relying on retail to supply largely unskilled labour is not going to see us enriched as a nation. I won’t be lamenting their reduced impact on the economy.

    Manufacturing is a different proposition. While not subscribing to the idea that we must have a car industry, just because, it seems reasonable to think that a country that can’t manufacture anything is going to find itself in trouble one day, when the mines run out and the farms are barren.

    As others have said, we shouldn’t be stopping it, but we should be supporting those who are suffering in the transition. Most of us will be there one day.

    And in all of this, the most politically inept government for many a day just continues to produce the best policy and reform outcomes that we have seen since Keating, and comparable to no other govt since the war.

    Again, we are the lucky country, muddling through in spite of ourselves, in spite of a hung parliament, a bereft Labor party and a clueless opposition.

    How? I don’t have a clue.

    by Dogs breakfast on Feb 16, 2012 at 4:17 pm

  9. But…but…but…

    Tony Abbott, the Liberals and many political correspondents told me the ECONOMY WAS ROONED!

    by Bobalot on Feb 16, 2012 at 4:19 pm

  10. But don’t let our good fortune stop the whinging and the whining, or blowing up when we have to pay for our own health insurance because we earn a quarter of a million dollars per annum.

    Keeping a head held high and being thankful for what we have, well that would be positively unaustralian.

    by Dogs breakfast on Feb 16, 2012 at 4:21 pm

  11. news of the decrease in unemployement on ABC radio (classic FM) actually had the opening line along the lines of… “homeowners hoping for an interest rate cut are set to be dissapointed as lower unemployment figures….”

    by jaywhar on Feb 16, 2012 at 4:38 pm

  12. Yes. Aunty has become an audio video version of the Murdoch crapsheets.

    by David Allen on Feb 16, 2012 at 4:45 pm

  13. Modus Ponens.

    I know that, you know that but, heck,this is politics and i have modelling…

    by David Allen on Feb 16, 2012 at 4:48 pm

  14. Hey Jaywhar,
    Yes it’s depressing isn’t it. Typical news coverage says, “Inflation fears as dollar falls!!” on one day followed by “Unemployment fears as dollar rises!!” the next.

    They’re pathetic. Thay of course think they’re clever bcause bad news gets attention but what actually happens is that they’re taken less seriously.

    by David Hand on Feb 16, 2012 at 5:03 pm

  15. On the other hand,I subcontract for three different retailers with five outlets.These outlets span northern/central Adelaide and forty kilometres south into the hills.So far this year I’ve had scattered days that add up to roughly a fat week,worst start to a year in the twenty years I’ve been in Adelaide. I could do with another GFC.This is worse.

    by floorer on Feb 16, 2012 at 5:04 pm

  16. Bernard,

    Before everyone gets too excited, the ABS now includes anyone working 1 hour a week as employed.

    There were 23 million less hours worked in the reporting period.

    by Suzanne Blake on Feb 16, 2012 at 5:52 pm

  17. BOBALOT….and so does Tony for that matter…i also heard from world renowned expert on everything, Eric Abetz, that these figures represent bad news for everybody. Thank God for the thruth from such a sage as eric.

    by colin skene on Feb 16, 2012 at 6:31 pm

  18. Far be it from me, of all people, to invoke argumentum ad verecundiam but, Dr David Gruen, Executive Director of the Macro Economic Group… with unemployment close to its lowest sustainable rate, and yet the polls show the MM is preferred over the government for economic management!?!??
    A large proportion of this country’s electorate have O/S rels. and connections so they know how fortunate they are to be here and how those rels. would do anything to be able to come here . and yet… and yet…
    A long bow perhaps but I feel it’ll be the soi disant Nu Oz who might save this government - they know, or have heard, what societal collapse means and would be highly unlikely to usher it in here.

    by AR on Feb 16, 2012 at 7:19 pm

  19. @Suzanne Blake: The official definition of “Unemployment” hasn’t changed like you are implying. It’s definition has been the standard for measuring unemployment since about the end of World War 1 when the ILO was formed.

    There are 6 different types of unemployment measured (U1…U6) and the U3 definition for unemployment is pretty much the standard definition for unemployment rate. U3 is (per the ILO definition) occurs when people are without jobs and they have actively looked for work within the past four weeks. This is the International standard for measuring unemployment.

    The only thing that has changed is the name of the unemployment type used as the standard for unemployment. Before 1994 there were actually 8 different forms of measuring unemployment and U5 was the type considered to be the “official rate.”

    In 1994 U3 and U4 were removed and U5 was renamed U3, U6 became U4 and so on.

    The definition of what is now referred to as U3 is identical to the definition of what used to be called U5 and U3 is now considered to be the Official unemployment rate of any country just as it used to be when it was called U5.

    So your attempt to try and portray the name change as some sort of insidious Leftist plot to make the Labor Government’s figures look better has no basis in truth whatsoever.

    U6 is the only form of official measurement of unemployment that includes people working part-time that would like to work full-time. It is still measured by the ABS but at no point will they ever refer to it as the “Official Unemployment Rate” (and it has never been the official rate) because every country on the planet has agreed that the term “Official Unemployment Rate” refers to people without work that have tried to get a job in the last 4 weeks and have done so since World War 1.

    I eagerly await your backpedal or attempt to claim the UN has been fudging the figures to make Labor look good. It ought to be good for a laugh.

    by Steven Warren on Feb 16, 2012 at 7:25 pm

  20. Suzanne Blake,

    It was your hero , John Howard, who changed the definition of “work” to what it is now.

    by Bobalot on Feb 16, 2012 at 8:05 pm

  21. @Bobalot it may be that the definition changed while on Howards watch, but it does not change the fact that there was less work available in January compared to December.

    by Khan on Feb 16, 2012 at 8:15 pm

  22. Right you are Bernard. I triple guarantee you, there are no American soldiers in Baghdad. We have them surrounded in their tanks. And similarly, all this talk about household debt bubbles and the high Australian dollar is just alarmism.
    Seriously, you should read Alan Koehler, your fellow columnist’s piece from yesterday, he has nailed the issue.
    And I recommend reading This Time is Different by Reinhart and Rogoff.

    by Chess C on Feb 16, 2012 at 8:29 pm

  23. @Bobalot + Khan: The definition of work didn’t change.

    It has been the same since the end of World War 1.

    The UN changed the designation for what is called the “Official Unemployment Rate” from it’s old label “U5” to its new label “U3” in 1994 but the definition stayed the exactly the same.

    Anyone who doesn’t have a job and has looked for work in the last 4 weeks is considered to be unemployed no matter where in the world you are.

    John Howard, the ABS, Julia Gillard, the “Guv’mint,” etc. aren’t responsible for this, the UN is.

    More specifically the ILO - which is the UN body charged with defining what the term unemployment means - is responsible and they haven’t changed their mind on what employment means since World War 1.

    @Khan the article clearly states that there were 46,300 extra jobs in January. So there was more work available in January than in December not the other way around. In fact there was more work available in January than in November too.

    by Steven Warren on Feb 16, 2012 at 8:40 pm

  24. @Steve Warren the ABS page itself ( http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0 ) states “Aggregate monthly hours worked decreased 23.1 million hours to 1,593.9 million hours”. In my understanding that’s less work being done no matter how many people are doing it.

    by Khan on Feb 16, 2012 at 8:44 pm

  25. Chess C re: Alan Kohler’s piece,agree.It’s hard to overestimate the psychological effect of a rates cut.Right now my gut feeling is people need a morale boost.

    by floorer on Feb 16, 2012 at 9:03 pm

  26. The definition of work might not(?)have changed but it has been massaged.

    by floorer on Feb 16, 2012 at 9:54 pm

  27. Hey Suzanne…. here is the video of Kim Sattler(Union Heavy) telling Barbara Shaw(Aboriginal Representative) about false comments attributed to Tony Abbott supplied to her by Gillard’s media wing: http :/ /video.theaustralian.com.au/?2196542421 (minus the space)

    Whats the punishment for inciting a riot again? Prison time isn’t it?

    by GeeWizz on Feb 16, 2012 at 10:17 pm

  28. … youth unemployment is three times higher and … nobody talks about it … nobody does anything at all about it … and in the regions … is it even measured?

    by DeeToo on Feb 16, 2012 at 10:18 pm

  29. Darn crikey moderation filter.

    Suzanne, video of the Gillard Media Wing incited riot and Kim Sattlers(Union Heavy) part in it:
    video.theaustralian.com.au/?2196542421

    by GeeWizz on Feb 16, 2012 at 10:20 pm

  30. Unemployment might be down, but the hours worked has decreased for the fifth month straight. Not a good sign.

    by drsmithy on Feb 17, 2012 at 12:31 am

  31. @ Geewizz

    Suzanne, video of the Gillard Media Wing incited riot and Kim Sattlers(Union Heavy) part in it:

    video.theaustralian.com.au/?2196542421”

    Yes its an open and shut case. Gillard’s Office with her knowledge or without, deliberately wound up Sattler and possibly Shaw, if not directly, certainly indirectly, to create a race riot situation.

    She refused to answer questions in Parliament since this new video emerged, saying she has already made her statement to the public and Partliament and hiding behind the AFP.

    She is now showing more signs of guilt and cover up. I met she was shocked when this new video emerged.

    Shameless ly ing again.

    by Suzanne Blake on Feb 17, 2012 at 7:47 am

  32. If you believe that then i am convinced you all believe in fairies!

    by Johnfromplanetearth on Feb 17, 2012 at 8:01 am

  33. Bernard,

    I’ve put some comments on this issue in response to your editorial. Worth a skim if I say so myself.

    Averages Bernard … and yes there are jobs coming through in mining - my goodness there should be. The hole in the ground sector is going like the clappers.

    Nothing else is.

    This economy should be having major labor shortages, “totally unjustifiable” wage pressure and soaring inflation to boot. But it’s not. Thank heavens.

    There are labor shortages, and wage pressures and obscene living cost hikes … near the mines.

    It is not that unemployment - as an overall total - is rising. It’s not dropping… not in any meaningful lumps. And if ever it was going to drop it would be now.

    You CAN have a booming economy where simultaneously the very boom and its effects exacerbate the existing pressures for structural change in the old, industrialised less efficient sectors. Trade exposed locals and exporters get hammered. It is in effect a reduction in the protectionist cover provided by the exchange rate. It shuts down the steam driven economy.

    And those impacts are not felt as an average. They are felt as a regional, localised, personalised wallop. They are sectoral. The devil is in the detail.

    Bit like market research really. Numbers and generalities can bury a lot of angst in recording improving or static averages. And where that angst is - and on whom these inexplicable changes are imposed - is very politically significant. Labor heartlands. And the aspirational suburbs of subcontractors whose Macmortgages are bolted to the vulnerable and trade exposed industries.

    by Peter Ormonde on Feb 17, 2012 at 8:43 am

  34. @ GeeWizz

    Hey Suzanne…. here is the video of Kim Sattler(Union Heavy) telling Barbara Shaw(Aboriginal Representative) about false comments attributed to Tony Abbott supplied to her by Gillard’s media wing: http :/ /video.theaustralian.com.au/?2196542421 (minus the space)

    Whats the punishment for inciting a riot again? Prison time isn’t it?”

    which is why Gillard refuses to comment now.

    by Suzanne Blake on Feb 17, 2012 at 8:44 am

  35. The statistics are one thing, but what of the quality of the ‘jobs’, rather, careers current and likely to be available in the future? Will they mostly be ‘service’ sector employment? What is it like for older people finding employment? Perhaps questions to ponder in a ongoing article?

    by ZA on Feb 17, 2012 at 9:19 am

  36. SB and Geewhizz,
    I know this is a complete waste of time but, THERE WAS NO RIOT. The only damage done to the building was done by the police. THERE WAS NO RIOT. If inciting a protest is now going to be a criminal offence then this is a sad day for democracy. The only upside would be seeing Alan Jones and friends go to jail for organising the convoy of incompetence. THERE WAS NO RIOT.

    by Nick the Hippy on Feb 17, 2012 at 9:49 am

  37. Nick did you watch the video??

    Kim Sattler deliberately attempted to incite a confrontation with Tony Abbott based on mistruths.

    It’s clear for all to see in the video. What is it with Union Heavies and walking the fine edge of the law?

    by GeeWizz on Feb 17, 2012 at 10:04 am

  38. But there was no riot. By the way, do you actually have a view on the strong employment figures? It was the basic point of this thread.

    by Nick the Hippy on Feb 17, 2012 at 10:45 am

  39. dear nick the hippy,
    please see the attempt at a change of subject as the ploy that it is, to sidetrack the discussion and have it focus on irrelevant things, which are seen as damaging to the government. these posts have nothing to do with the economy or employment, but as the employment figures show the economy is not doing too badly. the neo-cons have no answers for this and cannot use good news to hammer the government so they need to distract and nullify the discussion. i emplore you (and others) to ignore this obvious ploy.

    by tido wales on Feb 17, 2012 at 12:22 pm

  40. The economy is doing quite well, all things considered.

    The problem is that it’s going to turn pretty sour sometime in the fairly near future, just like the rest of the world, and our current Government is not doing a lot to prepare for that outcome, because they’ve apparently bought the same bullshit line everyone else has: “Australia is different”. We’re not different, we’ve just been (fortunately) held up getting to the party by Mining Boom 2.0. The problem is Mining Boom 2.0 is never going to employ more than a few percent of the population and sends most of the wealth it generates overseas.

    Admittedly Labor are doing a better job than the Liberals, who spent a decade squandering the biggest opportunity this country has ever (and probably will ever) had for prosperity on fostering a real estate bubble and middle class welfare, when they could have been building world-leading public infrastructure and creating a SWF to spread the benefits of the mining boom out over the whole population for a timespan of decades.

    But not being as bad as the last guy doesn’t make you good. It just makes you less worse. Labor don’t have the same opportunities now as the Liberals did, but they’re squandering them nearly as badly.

    by drsmithy on Feb 17, 2012 at 12:34 pm

  41. Suzanne Blake is correct (for once) but overall Australia is surviving quite well compared to the rest of the world as exampled by Spain which is now being plunged into mass unemployment.

    We all benefit from the mineral’s boom but that is more reason why we should all share in the profits ala a tax that can be used by the government for infrastructure projects etc.

    However surely this article diverts from the real news of the decade- will he or won’t he (as in Kevin Rudd )?.

    The SMH is now frothing at the mouth and unless this question is answered heads will begin to explode in news rooms all over the country. It’s their story and they want an answer.

    Although one question has never been asked : why would a minority government risk changing leaders when they must rely on 3 Independents for their vote and no-one has bothered to ask them whether they share the love for Kevin?.

    by Oscar Jones on Feb 17, 2012 at 1:16 pm

  42. GeeWhiz you are right.

    The spectacle of rioting foul mouthed AFP officers…someone should pay.

    by Oscar Jones on Feb 17, 2012 at 1:39 pm

  43. Less worse is about the size of it DrSmithy.

    The Coalition’s history of squandering revenue while watching infrastructure struggle to cope with growing demands is a worry for many voters. Using a Senate majority to pass WorkChoices legislation in it’s most strictest form without taking it to the election is an indication that Coalition ethics is also not much to be desired despite all the blubberings about the Carbon Tax ‘lie’ (even ignoring Abbott posed the possibility of a CT or ETS previously).

    The Labour Government has also wasted tax dollars in the disastrous pink batts affair while there were many more projects screaming out to be funded and the elusive VFT remains just that - as elusive as under Howard.

    More evidence that the political landscape in Oz is about smoke and mirrors. Abetz’s performance is just another tick in that box just as almost any politician avoiding answering questions honestly.

    There really is not much choice in such a sad political line-up but it could be worse. Both Lib and Labs have not woken up to the reason why the last election resulted in a minority government, other than blaming the ‘voters’. Is it too negative to say it really is pitiful.

    by bluepoppy on Feb 18, 2012 at 9:40 am

  44. Whoops ‘labour’ should be Labor. Must have been working too hard on that one.

    by bluepoppy on Feb 18, 2012 at 9:41 am

  45. Bluepoppy…

    While there were obvious problems with the delivery of the stimulus package - mostly arising from severely underestimating the number of shonks and grifters that would flock to a government teat - as a point of economic pedantry the outcomes of emergency government spending are rather unimportant.

    Would be nice if we got something useful out of it - but that is not essential. Economically speaking.

    Most of us remember Keynes’ enthusiasm for building pyramids. He also suggested a more culturally appropriate stimulus package:

    If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.” General Theory Book III S VI

    A curiously biblical layout to Mr Keynes isn’t there? … chapter and verse.

    Now if I was a knuckle-scraping Friedmanite - a consistent enthusiast for Hockeynomics, say - I’d be running the argument that it is actually far preferable for the government to waste money - bury it in old pits - than risk investing in an industry, product or service which would exclude private investors.

    If they were real freemarketeers, they would be far more concerned with the total collapse of the private roof insulation business in the wake of the Canberra batts torrent than any minor political scandals that can be conflated in the gutter press. Young Aussie battlers - crushed by a massive government stimulus. Compensate them - the real victims of this spectacularly successful scandal. Try selling a batt in Queensland today.

    A serious free-marketeer - those concerned with defending their virtue - would be demanding that the government restrict it’s stimulating to the economic extremities and keep it’s hands off the private sector.

    But they’re not serious. They’re politicians.

    by Peter Ormonde on Feb 18, 2012 at 10:50 am

  46. Economically speaking you are correct Peter Ormonde, if viewing these sorts of programs as purely a mechanism of stimulating growth - but at what cost.

    A stimulus should at least attempt to produce a benefit (other than just a stimulus), and preferably not wasteful. The reality is Australia was already well placed to offset the GFC due to better regulatory mechanisms and a booming mining sector albeit the benefits not felt across all sectors.

    The building industry has always been deemed the most appropriate target, having the widest spin-off effects but I reckon this is short sighted and hardly a wise approach to using resources or as a base to re-thinking our economic approaches in terms of sustainability and free-market blind faith.

    Why not use the money more wisely in other infrastructure and community projects (roads, public transport, measures to ease traffic congestion, reducing elective surgery cues, disability sector, dental care for low income earners etc). These would create a stimulus across a number of sectors.

    Throwing money at consumers ($600) to stimulate the retail sector was equally short sighted and any stimulus would be equivalent to a Christmas run-on that is all over before it starts. Nothing in that stimulus promoted the touted long term goals of job security. It was largely irrelevant in terms of the GFC.

    The schools projects as a stimulus at least provided some schools with long overdue improvements to accommodation even if the lack of oversight and planning led to the same queue of shonks and grifters; and a few projects that could be deemed unecessary.

    However, these sorts of stimulus packages as well as some subsidies tend to create more problems in the long term that I wonder if the short term gains are really worth the pain.

    I am more Keynesian than Friedman (heaven forbid) but it does not have to be all one and none of the other. There is a case for governments staying out of the private sector in many aspects, but a place for governments in providing critical ‘collective’ services which assist in maintaining a higher standard of living. In my experience subsidies such as relate to environmental incentives are well meant but have the side effect of pushing up prices. Much better to contract these services out at a set agreed price if governments must go down the ‘incentivisation’ pathway.

    Equally, many industry-saving subsidies are more of a vote buying exercise in many cases and do not address any of the real economic elephants in the room. These sorts of subsidies tend to favour manufacturing for obvious reasons given the global economic landscape works against these sorts of industries in the developed world. It is bandaid solutions on weeping sores, basically.

    PS: I am not sure Hockey knows exactly what he is - didn’t he advocate for government interference in the highly independent and overpaid Reserve Bank.

    by bluepoppy on Feb 19, 2012 at 11:35 am

  47. Spoken like the slavering socialist you obviously are Poppy!!!!

    When has government spending EVER produced social benefits? It enslaved and impoverishes the middle class, robs us of incentive and grinds our hopes and dreams into a fine paste. And even then we have to have private health cover and send the kiddies to boarding school around the corner.

    For us Orstrayan Tea-baggers, taxation - other than for the purposes of protecting my life and my property - (razor wire, weapons, coppers and the like) is theft. Someone said that once - or was it “property is theft” - yes, that was it. Either way I’m not having that red-haired vixen doing her smash and grab act on me or my property for nuffin! Home invasion!!!!

    …It was largely irrelevant in terms of the GFC.” You got any evidence for that?
    I reckon Gerry Harvey would be of a different view. So would the kids who got jobs there. Now they are losing them.

    As in the quote above from the prophet Keynes, it’s not what you do with it - its how much you splash about. Some of it - like cash payments - sloshes about quickly and spreads like ripples on a pond. Especially payments to pensioners with all that pent up demand for flatscreens and the baubles of the 21st century. You still whingeing Gerry?

    If you want job security - import a capitalist class from somewhere who knows when they are onto a good thing… who can do something other than manufacture excuses and go begging for handouts when they fall over… again. Someone who knows how to work an edge. You won’t find any here. We don’t do that any more. We just find stuff and dig it up.

    We are typecasting ourselves - or have been typecast - as the world’s quarry… a wide brown Nauru… and as a result we are seeing a pressurewave - a tsunami of global competition - smash into our manufacturing sector - what’s left of it.

    We sell them rocks - they sell us plasmas. That’s a market for you. Dreadful innit?

    by Peter Ormonde on Feb 19, 2012 at 12:01 pm

  48. More Australians are in work than any time in our history.

    True so long as your definition of “in work” doesn’t include “at work”.

    Hours worked have been dropping steadily for months. More people might have jobs, but less work is being done.

    by drsmithy on Feb 19, 2012 at 5:14 pm

  49. Naaaah…not a socialist, more a social democrat and sometimes utilitarian. I could go off on a real tangent and further put it to you that all this talk about jobs is missing the point. Communities are about accessing goods and services and jobs were created to provide those goods and services, first through bartering then along came money. Some of the modern jobs do not produce or create anything, or provide a service.

    Many of them just shuffle non-existent capital around. Remember the 60s and 70s where all the talk of advancements in technology were predicted to improve lives by reducing the number of working hours. What happened?! We are working longer hours due to oft-touted shareholder investment pressures and perceived importance of profits (even if obscene) where staff that have not been downsized are attempting to get the same amount of work done with fewer people. If they are lucky enough to have their jobs and they have not been outsourced OS.

    God help us (if he/she is out there) should we have to fall back on some form of self reliance whether it be manufacturing or agriculture.

    by bluepoppy on Feb 19, 2012 at 5:42 pm

  50. Social democrat! Strewth it just gets worse and worse.

    They don’t just shuffle non-existent capital about. They repackaged debt as an asset and sold it to the mugs like it was actually worth something. And the greedy mugs bought it. And Standard and Poor gave it an AAA credit rating. Who would know? Who could guess? And then when it all fell over they went running off to the governments for protection.

    And they are still sitting there - these “assets” - waiting to be written down to the new worthless value… lurking in the notes to balance sheets.

    That’s a bit of a problem with your modern social democracy if you don’t mind me saying. The more you look at it it looks like a strangely corporate sort of socialism … a welfare state for failed capitalists. A modicum of the readies gets sprinkled about amongst the rabble - just enough to keep everything steady - but the great beneficiaries of the State - those with their snouts most firmly in the trough - wear suits and inhabit skyscrapers.

    And all the while we become more unequal… in everything from income to working hours… less fair and more selfish in how we see the world.

    by Peter Ormonde on Feb 19, 2012 at 6:00 pm

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