The Economic Outlook? We’re screwed in 2017

February 7, 2017

As economists debate whether this year will be economically better or worse for Australia, one thing is certain: we will all get screwed even more this year.

Last week, BusinessDay Scope economic survey for 2017 issued its survey of 27 leading economists from financial institutions, academia and consultancies.

This year, the survey predicts economic growth of 2.4%; an unemployment rate of 5.8%; unchanged terms of trade; an Australian dollar exchanged at US72 cents; and an increase of real net disposable income by 1.5%. Inflation is expected to be lower than wage growth, and interest rates are expected to stay the same at 1.4%. House prices in Sydney and Melbourne are expected to grow by 4.9% and 4.3% respectively.

In summary, most economists are expecting this year to be slightly worse than last year, with one economist predicting a recession.

It is interesting to reflect on this message in the context of the capitalist economy we live under. By sending the message of economic stability, capitalism attempts to reassure us that things are under control, that business will continue as usual, that workers will continue to be exploited and that profits will continue to roll in. It is a reaffirmation of neoliberal hegemony and increased wealth and power to the ruling class.

To ordinary workers, the material reality is very different. Demographic and social reports continue to confirm the widening of the gap between rich and poor. Last year's McCrindle Report found that the average household income of $107,000 is half that of the top 2 million households and 12 times more than the $22,000 earned by the bottom 20% of households.

The gap in net wealth is worse, with the top 20% of households owning 71 times that of the lowest 20%. The recent Oxfam report confirmed that the eight richest men in the world owned as much as the bottom half of the world.

In terms of housing affordability, median house prices in Sydney and Melbourne continue to hover around the $1 million mark. House price growth over the past 20 years completely outstripped income growth over the same period. Last year’s Household, Income and Labour Dynamics in Australia (HILDA) report confirmed that renters now outnumber homeowners for the first time in Australian history.

The year ahead looks even worse for indigenous people, job seekers, the unemployed, single mothers, refugees, the homeless and people living at the margins of society. This is with the government continuing its austerity program through welfare cuts, cruel systems of debt recovery, attacks on unions, students and almost everyone in society except multinationals, mining companies and banks.

With such a bleak year ahead, the real question is where will people turn for answers? Recent polls show One Nation steadily rising in popularity. At the global level, the world now lives under the reality of a Donald Trump US presidency.

As the economists do their crystal ball gazing, the reality is that ordinary people will continue to suffer in 2017.

It is now more than ever that we need to get our message out that the real answer to all of this is to replace the capitalist system with one that puts people and the environment first. We continue to do this through the Green Left Weekly. But we need your support.

You can contribute to the Green Left Weekly 2017 Fighting Fund online. Otherwise, you can send a cheque or money order to PO Box 515, Broadway NSW 2007 or donate on the toll-free line at 1800 634 206 (within Australia).

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