On this episode of Dollars & Sense, Greg and Elinor discuss the latest GDP growth figures, how rate increases have damaged the economy and what might come next.
Greg Jericho is Chief Economist at the Australia Institute and the Centre for Future Work and popular columnist of Grogonomics with Guardian Australia. Each week on Dollars & Sense, Greg dives into the latest economic figures to explain what they can tell us about what’s happening in the economy, how it will impact you and where things are headed.
Host: Greg Jericho, Chief Economist, the Australia Institute and Centre for Future Work // @GrogsGamut
Host: Elinor Johnston-Leek, Senior Content Producer, the Australia Institute // @ElinorJ_L
Plans to import LNG to Australia reveal the extraordinary failure of consecutive Australian governments to stand up to multinational gas corporations, the Australia Institute has said.
Key Points:
Australia is one of the biggest exporters of gas in the world, alongside Qatar.
Around 80% of Australia’s gas is exported as liquefied natural gas (LNG).
Over half (56%) of gas exported from Australia attracts zero royalty payments, effectively giving a public resource to multinational corporations for free.
Across the country, gas and oil extraction employs just 21,200 workers — less than half of one percent (0.15%) of the 14 million people employed in Australia
“This is pure farce,” said Rod Campbell, Research Director at the Australia Institute.
“We produce, burn and export a staggering amount of gas in this country. The gas industry itself is the biggest user of gas in Australia due to the gas it burns to process LNG exports. To suggest there is a shortage is absurd.
“The fact of the matter is that we have allowed multinational gas companies to take us for a ride by giving away our resources tax free and locking us into unsustainable export contracts.
“When facing a genuine resource shortage, the usual first step is to reduce usage, but that is far from what’s happening here.
“Heavily subsidised multinational corporations have been driving up the cost of gas in Australia by forcing us to bid against the international market for our own resources.
A significant proportion of young Australians say attending live music is important to them, but rising costs are a major barrier to young peoples’ attendance at live music, a first-of-its-kind national survey conducted by The Australia Institute and commissioned by The Push has found.
As the live music industry in Australia continues to struggle financially, the survey found there is strong support among young Australians for policies that would both support the sector and encourage more young people to engage with live music events.
The Australia Institute, commissioned by The Push, surveyed 1,009 Australians between the age of 16 and 25 between 9 and 15 August 2024. The survey has a margin of error of plus or minus 3%.
Today’s national account figures show that GDP per capita fell by 0.4% during the June quarter. This is the 6th consecutive quarter of negative GDP per capita growth, showing that Australia is in a per capita recession amid an ongoing inequality crisis.
Key Points:
GDP per capita growth of –0.4% represents the 6th consecutive quarter of negative per capita growth in Australia while total GDP growth of 0.2% is historically weak.
Household consumption fell by 0.2%, the weakest growth rate since the COVID-19 lockdowns in the September quarter of 2021.
Government expenditure contributed 0.3% to GDP growth.
Interest rates are a blunt instrument that are causing normal Australians significant financial pain while the tax system is turbocharging wealth inequality.
“Today’s figures show that Australia’s economy has gone backwards for a record six consecutive quarters once you take into account population growth,” said Greg Jericho, Chief Economist at The Australia Institute.
“They confirm that households have been smashed by high interest rates despite our research showing that inflation has been mostly driven by company profits and supply-side factors. Fortunately, government spending has helped stop the economy from shrinking.
“Today’s figures highlight again how necessary the change to the Stage 3 tax cuts were, which will deliver some much-needed relief to low- and middle-income households rather than overwhelmingly benefit the rich.
GDP growth figures released today show the economy almost grinding to a halt. The economy grew by only 0.2% for the quarter and just 1% over the last year. The release of these GDP figures shows that the Reserve Bank is wrong when it says, “the economy is running a bit hot” and it is time to start cutting interest rates.
The only reason the economy has seen any growth is because of the contribution of government spending. Without this contribution the economy would have shrunk by 0.2% this quarter. Worst still, without the government’s contribution the economy wouldn’t have grown at all over the last year.
This highlights just how weak the private sector is right now. Household spending is down. Business investment is down. The private sector has been smashed by the rapid rise in interest rates, demand has dried up and production is grinding to a halt.
The current economic conditions highlight how close the Australian economy is to recession and how damaging high interest rates have been to the economy. With inflation falling in Australia and around the world it is time for the Reserve Bank to follow other central banks and cut interest rates.
On this episode of Follow the Money, Ebony Bennett discusses the latest in federal politics with Professor Mark Kenny, former Chief Political Correspondent for The Sydney Morning Herald, The Age and The Canberra Times.
This discussion was recorded on Tuesday 3 September 2024 and things may have changed since recording.
Guest: Mark Kenny, Director, ANU Australian Studies Institute // @markgkenny
Host: Ebony Bennett, the Australia Institute // @ebony_bennett
Repeat delays are testament to how fiendishly difficult it is to get changes to electoral law right. The most recent delay has been attributed to constitutional concerns: how to design laws that limit political finance without violating freedom of political expression, which is protected by the constitution.
The High Court has reined in legislative overreach, and may get another chance to do so: last month former state independent candidates wrote to Premier Jacinta Allan arguing the carveout in Victoria’s political donation laws for the major parties’ funding vehicles is unconstitutional. Victoria introduced strict donations caps ahead of the last election. There were three independent MPs in the state’s lower house. After the election, none remained.
Only in politics does the winning team get to change the rules of the game. The risk is that MPs may vote to skew the electoral system to their own benefit, at the expense of a level playing field.
The Albanese government has given some clues of its plans, including a cap on donations, and a cap on spending of somewhat less than $1 million per candidate. One million dollars sounds like an eyewatering sum, but putting up a viable challenge to a sitting MP does not come cheap. The Australia Institute calculates each MP enjoys almost $3 million in incumbency advantages, plus non-financial benefits.
Four decades ago, faced with a series of economic, political and social crises, business and government leaders in Australia and many other nations were convinced by a well organised ideological insurgency of the need for what at first was presented as a series of technical changes in economic policy. However, neoliberalism quickly became a revolutionary agenda for re-ordering the social democratic state.
Captured: How neoliberalism transformed the Australian state directs attention to the central role of state power not just to remake markets, but also to remake a broad swathe of political life, social policy and citizenship.
Republicans have tried to pin the Vice-President as ‘Comrade Kamala’, but are her economic policies all that radical? On this special After America and Dollars & Sense crossover episode, Dr Emma Shortis and Dr Greg Jericho discuss Harris’ economic agenda.
This discussion was recorded on Friday 30 August 2024 and things may have changed since recording.
To mark PPE@10 this feature starts a series of posts to celebrate ten years of Progress in Political Economy (PPE) as a blog that has addressed the worldliness of critical political economy issues since 2014.
Last month, BlackRock, the world’s largest asset manager, made headlines as its support for shareholder proposals on environmental, social and governance (ESG) issues tanked at 4%, down from a peak of 47% in 2021.
This looks like an extraordinary pivot because in 2020 BlackRock became infamous as a posterchild for ESG investing. In his open letters to investors and companies that year, BlackRock CEO Larry Fink declared a ‘fundamental reshaping of finance’ whereby long term company profits would be dependent on ‘embracing purpose and considering the needs of a broad range of stakeholders’. He claimed this would involve putting sustainability at the heart of BlackRock’s investment strategy and integrating ESG factors into its investment decision making.
Chinese electric vehicles are transforming Australia’s car market. Are we getting a good deal? Sanjoy Paul and Priyabrata Chowdhury China’s electric vehicle (EV) manufacturers are…
In a free market, drugs are cheap Government-granted patent monopolies make them expensive Dean Baker This simple point was left out of a Washington Post…
“Economics”, our master narrative manufacturing our demise Richard Parker If economists could manage to get themselves thought of as humble, competent people on a level…
