the adult in charge .....
The Abbott Government has been in power for less than six months, but rather than creating employment and business confidence, the nation appears to be in economic decline. Peter Wicks from Wixxyleaks reports.
It seems like an eternity ago, but it was only a few months back, on 7 September 2013, that Tony Abbott declared Australia was now “Open for Business” after the previous Government defeated in the Federal election.
Finally Australia was going to be put on track, because the Liberal Party understood business, and furthermore there was the promise of the creation of one million jobs and two million within a decade from the incoming Prime Minister.
So, how are we tracking on the jobs front and how is being now open for business going now that the Coalition have been in power for roughly 20% of what is likely to be their single term if the polls are to be believed?
Let’s have a look at business investment now that the sign on our door reads “open”. I’ll use figures from the Bureau Of Statistics, as reported by Fairfax, as the Bureau are an unbiased and reliable source.
As it turns out, immediately after the Coalition victory, in the final three months of 2013, business investment in Australia dropped 5.2% - the highest drop in level since the Global Financial Crisis.
The Bureau Of Statistics also reports that the estimates for the 2013-2014 financial year have been downgraded from a year ago to the tune of 17%. With a 17% plummet in business investment within a year, it is so good we not have “the adults in charge”.
It will probably come as no surprise that forecasts show manufacturing investment is down 20%.
ANZ reported to its clients that business investment may drop up to 11% and described the financial implications of the new direction the country has taken since the "grown-ups" took over as:
“Over the cliff we go."
What is eye-opening though is that mining industry investment is also forecast to be down a colossal 25%. This is the industry that really pushed hard for Abbott and the Coalition to be put into government; with a 25% drop in business investment, they must be feeling like they backed the donkey in the Melbourne Cup.
So how about employment, how is that tracking?
Well despite a huge spike in the number of spin doctors employed by a Minister For Immigration Scott “No Comment” Morrison we have yet to see the million jobs that the Coalition promised to deliver.
Instead, the numbers of jobs seems to be falling off the same cliff ANZ’s investors jumped off.
Perhaps the one job that should definitely be lost is that of Employment Minister Eric Abetz. Rarely have we seen a Minister fail in their role so dramatically in such a short period of time.
Unemployment has risen approximately 20% since the Coalition came into power, with the unemployment rate in February hitting 6% the first time in over a decade. It should be noted that the unemployment rate never hit this rate through the entire time the previous Labor Government was in power - not even during the Global Financial Crisis, which decimated western economies right around the world.
In fact, the last time unemployment was this high in Australia was under the Coalition back in July 2003, when we had another lacklustre employment minister — the current Prime Minister Tony Abbott.
Those who think that a jump of 20% in unemployment is a failure better brace themselves for what is yet to come, which some would describe as catastrophic. This rate of 6% does not yet take into account some of what we know is yet to come.
In recent news, we have seen that Qantas is set to slash its workforce by 5,000.
Joe Hockey displayed his understanding of economics when he tried to blame the carbon price for the closure of two Alcoa smelters in a move that will cost another 1,000 their jobs. Alcoa, as it turned out, made a tidy little profit of around $46 million after it traded its carbon permits on the market, however that received far less press than Hockey's false claims.
The Federal Government were spared the embarrassment of having to explain further why they would bail out foreign confectionary company Cadbury and at the same time let Australian farmers and the fruit industry suffer by not assisting SPC Ardmona. The extraordinary attack on SPC and its workers led by Eric Abetz and Tony Abbott was exposed as nothing more than lies by a member of their own Party. The government were spared only because the Victorian Coalition, in a state of sheer desperation in the lead up to the forthcoming election and craving good news to report, ended up coughing up the cash.
We are also yet to feel the brunt of the usual wave of privatisation that comes with a Coalition government, although we know Medibank Private is on the list.
Perhaps the biggest shock that is yet to come will be the death of the Australian car industry, which employs approximately 50,000 workers. That is 50,000 families that will suddenly be down an income.
With unemployment climbing and set to go through the roof it seems timely that the government is now looking at welfare reform also.
The flow on effect from the drastic rise in unemployment is a vicious cycle as the impact reaches other sectors of the economy. First to feel the impact will be the retail sector as families cut back on spending. Also rapidly impacted will be the travel and hospitality industries, and the result of this will be more unemployment as employers cut costs.
Those of you who were hoping for the double dissolution election Abbott promised to remove the Carbon Tax he promised to immediately legislate to remove – a promise he has already broken – will be hoping in vain. With polling the way it is at present, you'd have a better chance of spotting Salman Rushdie loitering outside a Mosque in Islamabad than seeing a double dissolution election.
So there you have it, Abbott’s words versus Abbott’s actions.
If this is what the adults call “open for business” then I’m sorry, but those adults must be smoking crack.
Then again, if things keep up like this maybe we’ll all end up smoking it...