This would come as no surprise to most working Australians. Between 2012 and 2018, real net national disposable income per capita barely rose. And if the average didn’t rise much, then the incomes of the majority of Australians probably didn’t rise at all.
This explains why voters are saying that, despite all the Morrison government’s boasts about the strength of the economy under its stewardship, the economy just isn’t working for them. They complain about the cost of living, yet inflation is low by historical standards. Their real grievance is that they are struggling to make ends meet, as wages barely keep pace with inflation. It seems a long time ago when they last received a substantial wage rise.
It is highly unusual for an IMF report to comment on the policies of Australian opposition parties. Yet the IMF indicated that Labor’s policies of lowering of the capital gains tax discount and applying limits on negative gearing would be worthy reforms – in the context of a broader tax reform. But if the Morrison government’s hysteria about these worthy reforms – abetted by vested interests and a complicit News Corp media – is any yardstick, the hopes for comprehensive tax reform are forlorn.
The party that wins the coming election will have its work cut out for it if the IMF’s projections about material living standards are any guide. Shirking hard decisions in favour of populism will, ironically, fail to gain popular support, as workers continue to struggle on flat wages in a slowing domestic and global economy.
If Australia is to continue its world-beating run of recession-free economic growth, it will need a new, productivity-raising economic reform program whose benefits are fairly shared. Yet the energies of the present government seem to be devoted to ensuring that, come what may, its ministers get their fair share and a few cherries on top.
Craig Emerson is managing director of Craig Emerson Economics, a Distinguished Fellow at the ANU and adjunct professor at Victoria University’s College of Business.
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