"Australia's GDP per capita went backwards in the June quarter, sliding by 0.2 per cent. Reports that it increased depend on the use of "population creep". GDP increased by 0.2 per cent, but that was only due to population growth, and GDP per capita, which is a far more accurate guide to living standards than GDP, declined.
Not surprisingly, then, real net national disposable income per head, which is the best measure of living standards, slid by 1.2 per cent in the three months to June. The Fairfax economist Peter Martin says this is the fifth consecutive slide in real net disposable income per head, which is now 5 per cent below its peak in 2011." (The Hon. Kelvin Thomson, Federal Member for Wills, 3rd September 2015).
Our economic growth rate is lower than the US, the European Union, Britain and Greece.
But the geniuses who have dug us into this hole want us to keep digging. They say that flat growth means we should ratify the China Free Trade Agreement. The fact is that we have recently entered into the Korea and Japan Free Trade Agreements, and yet our real income per capita is declining. The fact is that in the past decade we have entered into Free Trade Agreements with the US, Thailand, Singapore, Malaysia, New Zealand, Chile, Japan and Korea. If Free Trade Agreements are good for us, why are we going backwards?
For the past thirty years Australia has been undergoing an experiment. Free market liberalism. Its hallmarks have been globalisation, privatisation, deregulation, free movement of goods and free movement of people. Its advocates said it would strengthen the Australian economy, and make us resilient to external shocks.
But far from making our economy more diverse and resilient, we have become narrow and vulnerable. The economist Saul Eslake has expressly described our economy as vulnerable to external shocks.
We have much higher levels of unemployment than we did thirty years ago. We have much higher levels of youth unemployment, much worse long-term unemployment, and serious problems of underemployment. We have much larger foreign debt and much larger budget deficits. The distribution of wealth between rich and poor is becoming less equal. And the social problems generated by frustrated ambition - drugs, crime, mental health problems, homelessness - are on the rise too.
If Bilateral Trade Agreements were the way to go, this would not be happening. But it is. Much of our manufacturing has disappeared offshore, and much of our research and development with it. The hi-tech industries have largely passed Australia by. We put our eggs in the mining basket, and are now paying the price.
The flat GDP also shows the folly of rapid population growth. In the past decade we have trebled our net annual migration and claimed that this would drive economic growth, but it is a con job. "Population creep" is used to make the figures look better, but GDP per capita doesn't improve at all. In fact we have higher unemployment, skills shortages and infrastructure backlogs. Population growth reduces productivity per person, the very thing that economists claim to be desperate to increase.
And the third thing the flat GDP does is show what nonsense Joe Hockey has been talking about the economy for the last two years. When they were in Opposition the Liberal Party said there would be no excuses. Now there is a list of excuses as long as your arm. Then at the G20 Conference in Australia last year he trumpeted that there would be an extra 2 per cent global growth! And this year he ridiculed as "clowns" commentators who expressed concern about the direction of Australia's GDP.
Who is wearing the red nose now?
Source of article: Press Release from Kelvin Thomson, Federal MP for Wills