Amid all the shouting and backslapping about the growth figures in the March quarter’s national accounts, Treasurer Peter Costello had this to say.
Business profitability, as measured by corporate gross operating surplus, rose by 4.4% in the quarter to be 13.9% higher than a year ago. Profitability is strong in a number of industries including manufacturing and retail trade. At 28.1%, the profit share of the economy is at a record level.
That’s something you haven’t heard the likes of the Business Council’s Michael Chaney, Peter Hendy of the ACCI, or any other spruiker for business trumpeting, especially with the damage being wrought on the reputations of the Howard Government and business by WorkChoices.
Perhaps you also didn’t read the following observations from the National Accounts: The Wages Share of National Income has fallen to its lowest level since 1979 at 53.2%; nor this point: that since 2001 wages share had fallen three percentage points.
Nor was this bit of analysis included: real unit-labour costs fell sharply in the non-farm sector, down 1.4% on the March quarter of the 2006 financial year, and down 2.1% year-on-year.
The figures show that with the combination of very strong sales, up 2.1% March quarter, on March quarter, there’s been a sharp expansion in profit margins, which in turn has generated a booming profit result that is showing few signs of easing.
No wonder the profit share of the economy is at record levels. Funny how you don’t hear that from Cossie and his mates in business: is profit suddenly a dirty word in an election year?