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Feb 17, 2014

Not transitioning, drowning

Crikey readers talk wages growth, Fairfax deadlines and the coal companies getting government money.

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Yesterday’s news

Kim Lockwood writes: Re. “Hearing crickets on the sports pages” (Friday). It’s not just the SMH with an early deadline. The Age — because it’s printed in Ballarat? — seems to go to bed about 6pm. The South African cricket stories are carefully worded (p)reviews.

In Friday’s Age we learned that the hard hitting of Mitchell Johnson had kept the visitors on track — after a night in which Johnson’s bowling had devastated them! They’re a day behind.

On the edge of economic free fall

Les Heimann writes: Re. “Wages non-growth and austerity potential traps for the economy” (Thursday). Yes folks, once again “wages are too high” is the clarion call of the business moguls as they rattle the cages of their parliamentary underlings; the Australian Tea Party look-alike. One of these, Joe Hockey, currently federal Treasurer, at the Press Club last week extolled his and his fellow conservatives’ “plan” to transition the economy.

Have you heard it before? Get rid of the carbon tax, mining tax, everyone has to help themselves, abolish the age of entitlement, bring back the Australian Building and Construction Commissioner, and when asked just what was his plan to increase employment, well, as he said that he had told us his plan, get rid of the carbon tax …

We have this strange description of the Australian economy that, in reality, is teetering on the very edge of disaster, as being “in transition”. We know where we are, we feel we know what’s in store, and that’s going to be exacerbated by Joe Hockey and his crew, but where are we transitioning to?

If the “plan” by those in charge is to assist in depressing our economy, and with no new industries and no real job creation, then we are not “in transition”, we are about to be in economic free fall.

Increased unemployment means reduced demand, and coupled with a reduction in welfare payments that means the exact opposite of what Labor did to successfully counter the GFC. On top of all this is “reduce labour costs — it’s all the workers’ fault”.

No, it is not. This stupid capitalist assertion that prices follow wages needs to be attacked. There are libraries full of evidence that always in an equal economy wages go up if prices go up.

Wages can and will decrease if prices go down. Prices can go down if profit margins go down. Wages will, of course, go down with rising unemployment. Wait a minute — that’s what this is all about. A conspiracy to bring down wages!

Subsidies for coal

Peter Burnett writes: Re. “Let the market decide” (Wednesday). In comments, Tamas Calderwood says: “The only thing governments can do is stand back and let the market decide — to grow an industry, shrink an industry, innovate and from time-to-time, sideswipe an incumbent.” From that, I presume he is opposed to the government’s massive subsidy of the mining industry (diesel fuel rebates, research and development subsidies, “clean coal” funding, etc). C’mon, let’s see you stick the boot into Gina, Clive and all the coal parasites sucking the government teat.

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