Cognac for some, Claytons for others
Porsche sales are up: evidence, surely, of the the much eulogised economic recovery. Good news too on profit margins: they are forecast to rise 20% this year. And by year's end unemployment is expected to ... well, remain the same. Oh well, two out of three ain't bad — for some.
Open any suburban newspaper, switch TV channels and the news is the same: the latest Australian Bureau of Statistics figures uncover further evidence of economic growth. An apparent paradox appears in subsequent reports of lay-offs here, closures there and cuts in working conditions somewhere else. The news that goes unreported is that while the economy is experiencing growth, the benefits of the "recovery" are limited largely to that section of the population that lives, and very nicely thank you, from profits.
The job recovery is a manufactured mirage (see page 11). New jobs aren't so much being created as old jobs are being casualised — 25% of Australians now work part time, for part-time pay and with none of benefits of full-time work, such as leave entitlements.
"While we should welcome the return of optimism, we should retain our capacity for self-criticism and a distrust of those who think success will quickly and easily fall into our hands", cautions Reserve Bank deputy governor Ian Macfarlane, while calling on working people to work harder for less. These calls will continue. As the battle on the waterfront shows, the more concession workers give, the more employers demand of them.
The fizz of the newspaper banner headline — proclaiming housing loan figures a boost to recovery — loses its effervescence as we read on: a 13.6% rise in housing finance approvals in December turns into a drop of 8% in January. The headline goes positively flat when we learn that the Reserve Bank will step in and possibly raise interest rates after August if demand continues in the housing market.
So while there is no doubt that the economy is growing, it is also the case that it is coming off the bottom of the worst recession since the 1930s. The point, however, is who is benefiting and who is being asked to pay for the recovery.
Even the current level of economic activity in Australia is threatened by the trade dispute between the US and Japan. If pressure on Japan to open its market still further is successful, that economy, suffering its worst recession since the war, will be retarded. One result of this will be lower levels of Japanese demand for goods from Australia.
Regardless of the outcome of the spat between the US and Japan, before the end of the decade the "normal" business cycle will plunge the economy back into an even deeper recession. The pattern since the early '70s has been for each recovery in the economic cycle to be weaker and shorter than the last. This is pushing working people gradually into a murky gloom of greater unemployment, lower living standards and social decay.
This is the much vaunted market economy at work; its one and only aim is to make the rich richer. That this makes the rest of us poorer is an "unfortunate", but inevitable, side effect.