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Bare bones budget for jobseekers

Just as well the Commonwealth Government Budget wasn’t tabled last week – that would have been too much of a mixed message.

A nation’s budget is all about redistribution of wealth, a concept worth keeping in mind at a time when £100 million of British taxpayers’ money was spent on an unnecessary coronation pageant.

As has been repeatedly pointed out, Prince Charles became King by default on September 8, 2022, on the death of his mother, Queen Elizabeth II. There was no pressing reason to stage a mediaeval pageant, however splendidly well done.

This week, the media’s attention swung back to the King’s southern hemisphere colony, as Treasurer Jim Chalmer presented his budget.

So much had been flagged already that one does have to question is there a critical reason for the media embargo till 7.30pm on Tuesday.

As I started writing this on Tuesday morning, much of the Budget’s headline measures had already been revealed. This included a $15 billion spend on cost-of-living relief; $1.5 billion of it in electricity bill relief for 5.5 million households and 1 million small businesses. I should point out that this is from an ABC article published on Tuesday morning. The ABC’s business reporters Ian Verrender and Gareth Hutchens were all over it.

One of the other measures flagged earlier aimed to change the dispensing rules at pharmacies. Australians will be able to buy two months’ worth of medicines on a single prescription, with the change affecting more than 300 common medicines. This overrides the current rule that only 30 days’ supply of medicine can be applied to one prescription.

The ABC and other media outlets also seemed confident, ahead of the Budget, that Chalmers would produce a surplus and indeed he did. You can’t please everyone, though. Greens leader Adam Bandt said the government had prioritised delivering a ($4.5 billion) surplus over supporting people in poverty.

“Labor’s second budget is a betrayal of people who were promised that no one would be left behind,” he said in a tweet on social media.

Other leaked or pre-announced budget measures included cheaper child care and a (long overdue) pay rise for aged care workers. Welfare recipients received higher payments, but nowhere near the level asked for by lobbyists.

The Budget is a document which sets out how taxes paid by Australian businesses and individuals will be spent. It is a massive number, equating to 29% of GDP. In 2021-2022, $683 billion was raised in taxes across all levels of government. This was 15.2% higher than the previous year. A table prepared by the Australian Bureau of Statistics shows an upward trajectory for taxation revenue. The slight blip in 2019-2020 was due to disruption to employment by the onset of Covid-19 and its attendant lockdowns. Total tax revenue includes all Commonwealth, State and Territory taxes, GST, those indirect taxes that still exist and excises imposed on alcohol, tobacco and fuel.

The cost-of-living package is one thing, but the government has been under enormous pressure to raise the level of unemployment benefit. The Australian Council of Social Service (ACOSS) last month presented a detailed brief to Treasurer Jim Chalmers. A former Commonwealth Treasury head, Ken Henry, appeared on television as the ACOSS brief’s anointed spokesman. In a call to raise the level of NewStart and Youth Allowance, ACOSS said some 750,000 people in communities across Australia live on unemployment and student payments that do not cover the cost of housing, food, transport and healthcare.

The single rate of Newstart is (or was) less than $40 per day and living on Newstart and Youth Allowance presents the biggest risk to living in poverty. ACOSS wanted the rate raised to within 90% of the aged pension, so were almost certain to be disappointed.

In an open letter to the Prime Minister, ACOSS said 80% of people receiving JobSeeker payments have been receiving the benefit for more than 12 months. The same research found that seven in ten people on income support were eating less or reporting difficulty getting medicine or care. In December 2022, Anglicare found that there were 15 Jobseekers competing for each entry-level role.

“The longer people remain on income support, the harder it is to transition back into paid work,” the letter said.

ACOSS chief executive officer, Dr Cassandra Goldie, said post-Budget that while the $20 per week pay rise was welcome, it did not go far enough.

“The (increase) to JobSeeker and related payments is well below the Economic Inclusion Advisory Committee’s findings. The committee said that it needs to rise by at least $128 a week to ensure people can cover the basics.”

ACOSS and others are right to complain. Australia has the lowest rate of unemployment payment in the OECD. One in four people on Newstart have only a partial capacity to work because of illness or disability.

The ABC’s business reporter Gareth Hutchens wrote an intriguing analysis in May 2021 about the ‘full employment’ policies of governments prior to the 1970s. Then followed a policy aimed at creating a permanent pool of unemployed as a means of promoting economic growth and making Australia more globally competitive. Along with rising unemployment came a political ploy to blame the victim. The term ‘dole bludger’ emerged, first used by Liberal MP Bert Kelly, a pioneer of “New Right” political ideas. But the phrase was also promoted by Clyde Cameron, minister for labour in Gough Whitlam’s Labor government (1972-1975).

As unemployment soared in the mid-1970s, being without a job was recast as the fault of workers for being ‘too lazy’. There was much debate about the need for ‘overly generous’ income support. (Anyone who has ever been on it would dispute its ‘overgenerosity’. Ed)

Policymakers from the early 1980s started using an unemployment rate of 5% as a deliberate policy tool.

“How could everyone be expected to find a job,” Hutchens wrote. “There haven’t been enough jobs to go around, by design.”

Now, almost 50 years later, the long-term unemployed are still being victimised over a deliberate policy to keep them out of work.

If I may hark back to a FOMM from 2018 when we speculated about what one could do were one made King for a Day:

King Bob decreed: “I’d single out the dysfunctional tax and welfare systems and propose the following reforms:

Introduction of a universal basic income for all adults: $25k a year, indexed, no strings attached. Adults are free to earn money over and above the $25k but will be taxed on a sliding scale to the maximum rate for anyone earning more than, say, $100k.

In my Kingdom, all forms of social welfare would be replaced by a new regime, overseen by the Office of Financial and Social Opportunity and Incentivisation (NOOFASOI). The office would oversee payment of the UBI and iron out the inevitable wrinkles in a new and untested system.”

In the real world, countries as diverse as Finland, France, Ireland, Norway, the US, Canada, New Zealand, Holland, Iceland, India and Brazil are either talking about a UBI or trialling it in one form or another. In 2016, the Parliament of Australia published this comprehensive yet concise policy paper by Don Henry, for those who want to find out more.

While I leave you to make of that what you will, I’ll be delving into the 997-page Budget, seeing what’s in it for me. As we all do.

Squeezed between inflation and interest rates

inflation-interest-rates — The Australian cash rate since 1998 (Reserve Bank of Australia chart)

I just happened to be reading a novel set in the Edwardian era at the same time as the media was going bonkers (again) about the Reserve Bank raising interest rates by 0.25% to 3.6%. In Louis de Bernieres’s* book, The Dust That Falls from Dreams, one of the characters is holding forth about the sudden rise in the bank rate and subsequent collapse of the share market in 1914.

Hamilton McCosh, a daring entrepreneur and investor, is at first delighted when the bank rate goes to 4% because he has ‘a few bob invested here and there’. Then the rate doubles to 8% and quickly rises to 10%.

“Just as I was gleefully rubbing my hands the blighters closed the Stock Exchange”, he tells his pals at the Atheneum, a gentlemen’s club.

This is late July 1914, you gather, a few weeks before World War I broke out. McCosh didn’t know then that the stock market would stay closed for five months. Rather than cause inflation, this financial crisis functioned like the ultimate credit squeeze. Inflation stayed low, well at least until 1915, when it rose rapidly to 12% then to 25% in 1917.

In the pre-war period, De Bernieres’s McCosh is aghast – you can’t get credit anywhere and there’s a rout on the stock market. “What’s Serbia got to do with us?” he complains.

In 2023 you could insert “Ukraine’“and immediately realise that we have seen cycles like this before. In times of war, the supply of money is tested, oil is expensive and hard to source, there is much unemployment, securities can’t be sold and supplies of necessities are dwindling.

The 1914 financial crisis in the City was a liquidity crisis of massive proportion, the likes of which was not seen again until 2007/2008. Amidst much intervention by the government and the Bank of England, the day was ultimately saved.

In De Bernieres’s novel, McCosh regroups and singles out two stocks he thinks will do well – Malacca Rubber and Shell Oil (as he calculates where money will be spent in the war effort).

Self-interest and venality arises quickly whenever a country’s financial welfare is threatened. Survival of the shiftiest is the order of the day.

At this point in time, many of Australia’s mortgage holders must be in a state of anxiety as yet again the goal posts are moved.

Not that the RBA had any option. Monetary policy is under pressure from forces beyond the Reserve Bank’s control. We are not the only country where inflation and interest rates have risen sharply. You can chart the increases in Australia back to the onset of a pandemic in March 2020, then steeply rising since Russia’s invasion of Ukraine, in February 2022.

The impact of Covid is what initially sent the cost of living index soaring. From March 2020, when it was 2.2%. Inflation rose steadily through the Covid years, driven up by stock shortages, the impact of bushfires and floods on production, disruptions to supply chains and the ever-rising cost of fuel.

Inflation reached 7.3% in the September quarter of 2022, about six months after Russia invaded Ukraine. The RBA now thinks inflation may have peaked (at 7.8% in December 2022). But as ABC business reporter Peter Ryan observed, the March quarter figure will be the one to clarify matters when released on April 23. Wherever it rests, Australia’s inflation rate is a long way north of the 2%-3% range promised in 2019.

When inflation rises, central banks almost always use monetary policy to beat it into submission. This week’s interest rate rise – the 10^th in a row, takes the official cash rate to 3.6%.

As Peter Martin observed in a timely piece for The Conversation, Tuesday’s interest rate hike was the culmination of a process that has added $1,080 to the monthly cost of payments on a $600,000 variable mortgage.

Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University, calculated this increase ($12,960 per year) by comparing payments on the National Australia Bank’s base variable mortgage rate before the Reserve Bank started its series of hikes in May 2022.

Before the Reserve Bank began raising the cash rate, the base variable rate was 2.19%. It’s about to be 5.49%, pushing up the monthly payment on a $600,000 mortgage from $2,600 to $3,680.

The Reserve Bank acknowledges it is a “painful squeeze”, but hints it might not need to squeeze much harder.

There’s more pain across the ditch. NZStats revealed that the annual inflation rate for 2022 reached 7.2%. Housing and household utilities was the largest contributor to the annual inflation rate. This was due to a 14% hike in the cost of building a house and rentals also rose.

As if to demonstrate its independence from the government of the day, New Zealand’s Reserve Bank pretty much ignored the impact of Cyclone Gabrielle. While all around people were shovelling silt out of their houses, the RBNZ increased the cash rate from 4.25% to 4.75% on February 22. This was a more dramatic increase than seen this week in Australia. But New Zealand is anxious to suppress the spiralling cost of housing. You’d think a country which is over-endowed with pine forests would have this covered, eh?

I guess the new UK prime minister will want to take credit for the drop in inflation recorded in January (8.8%) compared with 9.7% in December 2022. The Bank of England Governor has warned that it may need to raise rates again if inflation re-asserts itself. After 10 successive increases since December 2021, the official rate is at 4%. Meanwhile in the US, the Federal Reserve is flagging higher and faster rates rises (4.75% in February), despite inflation dropping below 7%.

Why does all this matter and who does it matter to? If you are young, working and buying your own home, yet another 0.25% increase in the cash rate wrecks your household budget. Those who borrowed their deposit (from the Bank of Mum and Dad) will be desperate for another pay rise, as inflation eats into the recent 4.5% increase in wages.

As The Guardian reported just last month, almost 25% of borrowers were at risk of mortgage stress as of December 2022. Another 800,000 borrowers face higher repayments as fixed loans end later this year and revert to the variable rate.

Tim Lawless, research director at CoreLogic, says the clear reason for mortgage stress is that interest rates increased faster and earlier than anyone was thinking. (Whatever happened to the notion of buying a modest first home then upgrading as finances permit?Ed.)

“We are expecting that the rate of mortgage stress will push higher into 2023,” Lawless told The Guardian, “partly because of higher interest rates, but also because of the cost of living.”

Theo Chambers, chief executive of Shore Financial added: “People probably borrowed more than they could have today. With borrowing capacities down almost 35% from 12 months ago, these people wouldn’t get approved today.”

As for De Bernieres’s Hamilton McCosh, how is he supposed to earn a living in Edwardian Britain, he fumes, saddled with four children, a truculent wife and two mistresses current (one retired), all of whom have children to feed?

As the Norwegian playwright Henrik Ibsen once said, “Home life ceases to be free and beautiful as soon as it is founded on borrowing and debt“.

*author of Captain Corellli’s Mandolin

Hoarding cash in a cashless society

hoarding-cash-cashless — Image by S. Hermann and F. Richter, Pixabay.com

Australians have been hoarding cash, particularly through the first year of Covid-19, despite forecasts that we will be a 98% cashless society by 2024. Even if this prediction from global payments giant FIS comes to pass, some 540,000 Australians will still prefer to use cash.

You may recall a flurry of news stories on this topic in March. The research commented on the effect of a de facto ban on cash during the first year of Covid-19. Even now, merchants are discouraging the use of cash at point of sale.

The topic was prompted when Professor Steve Worthington of Swinburne University’s business school sent me an article he prepared for the ANZ Bank publication, Blue Notes. The topic was ‘Can cash survive the digital tide?’

Prof Worthington says the key issue with the domination of electronic transactions is that it excludes people who either rely on cash or prefer to use it. He argues that physical cash should be classified as an essential service (designated as a Public Good).

It may not surprise to learn that Australia’s high cash users are likely to be older people, have lower household incomes, live in regional areas and are less likely to have access to the Internet.

As you’d know, banks offer their customers internet banking, but you need a secure internet link to do so.

The Australian Bureau of Statistics (ABS) estimates that two million Australians do not have access to the Internet. Many Australians use public internet, most commonly at public libraries – not the most secure method of conducting Internet banking.

Prof Worthington notes that there is now more cash in Australia than ever before, with record growth in 2020. But it is not showing up in the Reserve Bank of Australia’s statistics as being circulated.

A cash payments study by the RBA in June last year confirmed that Australian consumers were continuing to switch to electronic payment methods in preference to cash. The share of in-person cash payments was still substantial; at 32% by number and 19% by value in 2019, down from 43% and 30% respectively in 2016. But generally, we have taken to tapping and going.

Meanwhile, the RBA is mystified by the rising demand for cash, which does not show up in circulation data. Cash (notes issued in excess of those returned), soared 17% during 2020. The average in the decade prior was 5% a year. The Reserve Bank went to its contingency fund twice during 2020, such was the demand for $50 and $100 notes. There are now 36 $50 notes and 16 $100 notes in circulation for every person in the country.

(“Where are mine?” – She Who Keeps Coins in a Tin for Christmas).

Tabloid newspapers and current affairs programmes go to the ‘stashed under the mattress’ cliche when reporting on this curious social trend. Given the meagre returns available on term deposits and the comparatively low cost of domestic safes, it is fair to assume some people have a stash of cash at home.

There could be many reasons for this apart from convenience; like hiding one’s income from the tax office, Centrelink or the ex.

I’m from the pounds shillings and pence era when shops would not cash a cheque unless they had previously done business with the person presenting it. Cash was definitely King then.

My Dad used to call hard currency ‘filthy lucre’ and while he took cash over the counter in the bakery shop, he always washed his hands before handling food. The term ‘filthy lucre’ does not mean that banknotes are dirty – it’s a biblical reference to ill-gotten gains. But I digress.

Australians have gravitated big time to electronic banking solutions. The biggest clue is the absence of queues at ATM machines and mass withdrawal of ATMs in city suburbs – 2,500 gone in 2020 alone.

Forecasts that Australia would be a virtual cashless society by 2024 were drawn from a new report by financial giant FIS Global. Mike Kresse, head of global payments at FIS, believes cash will be virtually retired by 2030.

“From individual consumers and small businesses to the largest clients, cash can’t compete with rising expectations for fast, safe and easy payments,” he said when launching FIS Global’s annual report.

“The smartphone was already transforming payments, and the pandemic brought the future faster, accelerating the trends.”

FIS forecast that by 2024, Australia will be the fourth most cash-averse economy in the world after Sweden, Denmark and Hong Kong.

Prof Worthington says Australian authorities need to work on establishing a way to include people who still want to use cash, hence his plea to consider cash as an essential service.

“We are using less cash as a payment system, but today people still need access to cash. That may be because of a desire for privacy, convenience or as a backup payment option when all else fails.”

Cash is still the preferred payment option of many small traders and sub contractors. The Australian Taxation Office (ATO ) occasionally has a blitz on companies thought to be under-reporting income, one year targeting 45,000 small businesses.

“We use a range of tools to identify and take action against people and businesses that may not be correctly meeting their obligations,” the ATO says.

“Through data matching, we can identify businesses that don’t have electronic payment facilities.

“These businesses often advertise as ‘cash only’ or mainly deal in cash transactions. When businesses do this, they are more likely to make mistakes or don’t keep thorough records.”

It’s comforting to know that the ATO differentiates between the cash economy, the ‘shadow’ economy and the ‘black’ economy, the latter run by organised crime groups dealing in drugs, prostitution and people smuggling.

This topic got me thinking about the day in 1984 when I was locked in a secure room with a million dollars. Our chief of staff had been asked to send a reporter and photographer to a bank branch in Toowoomba. The occasion was the arrival of Australia’s first $100 note – in this instance 10,000 notes delivered in a square block. The cash was transported by train from the Reserve Bank mint at Craigieburn in Victoria. Secrecy was paramount and we were not told when the photo opportunity would happen until half an hour prior.

I have to tell you, a million dollars in $100 notes takes up a lot of space in a room. Our photographer fitted a wide angle lens to best capture the great block of notes and obligatory men in suits.

These days, I almost always carry cash in my wallet and feel naked if I run out. Despite having a debit card and a credit card, it somehow just isn’t the same. Even during Covid in 2020, when retailers looked askance at people tendering banknotes, I slipped the odd five or ten across the counter. Cash will always be an attractive option for some people because (a) it is anonymous and (b) does not leave an electronic trail.

After all, until the day when marijuana is decriminalised, regular users will turn up at the usual location with $300 or so in cash. There are many such occasions when consumers are unlikely to use buy now-pay later options.

No sooner had I written that, an ad for Safepay popped up on my screen! How do they do that?

A Special Day For Accountants – And Mike Tyson

accountant-beancounter-June 30 — Beancounter is a term used to describe accountants and economists chiefly concerned with fiscal matters and budgets

I might not have thought about this tax topic had not a reader emailed to gently remind me that Barnaby Joyce is not a farmer, as I said last week, but an accountant.

I could be forgiven for being lured in to that way of thinking by the way Barnaby portrays himself to the electorate. He loves a photo opportunity down on the farm, wearing the big hat and looking suitably weather-beaten. Barnaby does come from a large family of sheep and cattle farmers, but he did indeed go to university and study to become a Certified Practising Accountant (CPA). He founded his own firm in St George and ran it from 1991 to 2005.

So he might even now have some muscle memory of the tension that bean counters suffer as June 30 approaches. As we all should know, that is the lucky last day to finalise business books for the year and start afresh on the morrow.

It’s called a fiscal year, this aberration which ignores the orthodox calender and creates a ‘financial year’. In Australia and a dozen other countries, the fiscal year runs from July 1 to June 30. We are in a minority, however. Fiscal years in other parts of the world run from October to September (US), April 6 to April 5 (UK), January to December (much of Europe), April to March or variations on the theme. Some countries (New Zealand and Singapore for example), use different dates for government and other taxpayers.

Fiscal years are set by Federal governments and most State and local governments and companies follow suit.

It’s not mandatory, though. Some Australian companies stick to a January-December fiscal regime, in the main to line up with overseas partners or subsidiaries.

June 30 is the big stick held over trustees of Australia’s 595,000 self managed super funds, the carrot being the opportunity to draw a pension on July 1. The stick is meant to encourage trustees to do the right thing, less they be audited, fined or penalised for operating outside the terms of the trust deed.

But perhaps your super is in one of the 220 large super funds regulated by APRA and you can leave the detail to someone else. Lucky you.

More comebacks than Mike Tyson

Accounting standards aside, we could mark June 30 for a variety of different reasons, such as birthdays. Retired boxer Mike Tyson, former AFL player Ben Cousins and decorated US swimmer Michael Phelps shared a birthday on Wednesday.

On June 30, 1937, the world’s first emergency phone number (999) was launched in London. In 1990, June 30 saw the merging of East and West Berlin’s economies. In 1997, the UK transferred sovereignty of Hong Kong to China, ushering in an era of political instability and domestic anxiety. In 2019, Donald Trump became the first US president to visit North Korea: to what end was never fully explained.

The end of the fiscal year also ushers in a few predictable campaigns by charities, urging their benefactors to give generously (so you can claim a tax deduction). Likewise, the retail sector gears up for EOFY sales. This time round, the Delta strain of Covid-10 is playing havoc with the sales campaigns of Sydney and Brisbane retailers.

As June 30 approached, you may have noticed a rise in the level of 7pm nuisance calls from numbers started with 02 something. Scammers were out and about in June, pretending to be the ATO, pretending to be from the national broadband network (yep, she’s still out there), or just being prats.

Wikipedia has a voluminous entry (5,000 words or so) dedicated to the fiscal year as it is interpreted in different countries.

Just why Australia chose July 1-June 30 is a mystery, although one could hazard a guess. Australians tend to slack off after the running of the Melbourne Cup (on the first Tuesday in November). So I just can’t see Australians poring over their household or business accounts on Christmas Eve, can you?

The song and dance about the June 30 tax deadline is ever-so misleading. Taxpayers have until October 31 to lodge their personal returns. Individuals, businesses and SMSFs using a tax agent can postpone it as late as May the following year.

A government investigation in 2009 estimated that between 1.2 million and 1.5 million taxpayers (9% of individual taxpayers), were up to three years behind in lodging tax returns. Independent researchers Colmar Brunton found there were three basic misunderstandings which accounted for much of this non-compliance:

People thought they were below the income threshold;
They were unemployed and not working and therefore believed there was no need to lodge;
They were on a pension or receiving Centrelink payments and therefore believed there was no need to lodge (Some pensioners and Centrelink recipients do need to lodge a return and some don’t, hence the confusion.Ed).

Although the research is 12 years old, it’s a fair bet those three key misunderstandings are very much in play today.

The impact of Australia’s bush fires (2019-2020) and the onset of a global pandemic certainly shows up in the ATO’s 2019-2020 annual report. Commissioner Chris Jordan said net tax collections of $405 billion was down $21 billion (5%) over the previous year.

Natural disasters and pandemics not withstanding, the ATO is a money generating machine. In 2019-2020 the organisation collected gross tax of around $537 billion, and provided refunds of around $132 billion. The ATO employs 910,000 people to deal with a formidable workload. At June 30, 2020 its client base included 11.5 million individual taxpayers (not in business), 205,000 not-for-profit organisations, 36,000 public and multinational businesses, 4.2 million small businesses (including sole traders), 595,000 superannuation funds and 178,500 privately owned and wealthy groups (linked to 856,000 entities).

Not only that, 36,000 registered tax and BAS agents interacted with the ATO on behalf of their clients. And in 2020, the ATO took on responsibility for overseeing the JobKeeper scheme, early super fund redemptions and the Covid stimulus payments scheduled by Parliament. So, if you were having a hard time getting through to the ATO hotline, bear that in mind.

The ATO says 3.01 million calls were answered in the tax period (July 1 – October 31), almost double the calls received in the previous year. Of these calls, 207,741 were abandoned (6% of calls) and 485,348 calls were blocked. The average time for a call to be answered was (yes) five minutes.The ATO exceeded its phone service benchmark of 80% (87%).

Australians spend about $1 billion a year employing accountants to manage their tax affairs. The ATO has arguably made it easier to do it yourself, with much of the information (like bank interest, pensions, benefits etc), already pre-entered through data-matching. Every year at this time, law-abiding taxpayers fret about making mistakes or being late lodging their returns; or whether they will be one of the 175,000 ABNs cancelled for lack of activity.

But clearly the organisation has its sights set on much bigger targets. In 2019-2020, more than $2.4 billion was collected in cash and another $3.7 billion in tax liabilities as various task forces investigated tax avoidance, fraud, ‘Phoenix’ companies and the black (cash) economy.

So now you can see why we (Mum and Dad taxpayers), were first asked (in 1986-1987), to ‘self-assess’ when lodging individual tax returns. It’s like hiring 11.8 million staff for a one-off (unpaid) job.

And then we get to worry about it.

FOMM Back Pages (interesting to see how the ATO workforce has grown over six years.

When Rome Counted its Citizens

Census-Romans — Census taker visits a family of Indigenous Dutch Travellers living in a caravan in 1925. Wikipedia CC

You may not immediately deduce from the headline that we are about to embark upon a discourse about the Census, which will happen in Australia on or about August 10, 2021.

I say on or about because the online version of the head count can be filled in electronically on or a few days after August 10. You just have to declare where you actually were on Census night.

As you will recall, the Australian Bureau of Statistics (ABS) held its first online census in 2016. There was a major glitch on Census night (August 9) when the ABS website crashed, leaving millions of citizens perplexed. In October 2019, a Census test was held across 100,000 households to assess ‘end-to-end operational readiness’ for the 2021 Census.

In 2016, about 37% of people opted to fill in the paperwork and wait for an official collector to come calling. This time the ABS says it expects a better than 63% online response, given research that shows Australians prefer to complete the census online.

Taking a once in five years snapshot of the country’s population is an expensive exercise, budgeted at $565 million. The ABS is in the process of recruiting 22,456 field staff and managers.

Named after the Latin word ‘censere‘, meaning estimate, the Roman census was the most developed of any in the ancient world. The Romans (Ed: what did they ever do for us?), conducted their census every five years. The Roman Empire used this information to extract duties from its citizens.

An ABS history page says the first known census was taken by the Babylonians in 3,800 BC, nearly 6,000 years ago.

“Records suggest that it was taken every six or seven years and counted the number of people, livestock, quantities of butter, honey, milk, wool and vegetables.”

So yes, there is an historical precedent for the (compulsory) collection of personal data from every household in the country.

You may remember Tony Abbott, who was Prime Minister for two and a half footie seasons (2013-2015), tried to axe the census to save money. It didn’t happen (such change requiring a new Act of Parliament). To be fair to Abbott, both the Fraser and Keating governments sought to abolish the census for the same reason.

Sydney Morning Herald journalist Peter Martin unearthed this little-known fact in 2013 while writing about other countries which had tinkered with changes.

As Martin noted, Britain had for a long time been trying to abolish its census (held once a decade since 1801). The government held an inquiry in 2013 to find ways to update the way the UK collects data. This year’s census will be the last. Thereafter, the UK will ‘harvest the data people generate in their everyday lives’.

Apolitical, a social network for civil servants, observed that other countries are moving in this direction or have already done so, including the US, Norway and Finland.

“Rather than survey citizens, statisticians would collect the data traces left behind by people’s everyday interactions with government. Data is collected from welfare and tax departments, housing and vehicle registrations or our health records.”

Apolitical says statisticians can glean more from the aggregating of all this information (and anonymising it to protect citizens’ privacy).

In 2010, Canada’s Harper government tried to replace its census with a voluntary survey, prompting the shock resignation of Canada’s chief statistician, Munir Sheikh.

Following his resignation, Dr Sheikh, once described by a colleague as ‘the best economist in Canada’, expressed his disapproval of the government’s decision, saying that a voluntary survey could not replace a census.

Following the reinstatement of the mandatory census in 2015, Canada is preparing to hire 32,000 census enumerators and crew leaders to survey its vast country in 2021. Canada, like Australia, uses data from the census to share resources fairly and accurately among its widely-scattered provinces..

New Zealand also considered replacing its census, using data from government departments to determine its population. The country’s last census was in 2018 but it is already gearing up for 2023.

Some governments have encountered deep social opposition to certain questions. Former President Trump wanted a Citizenship question in the 2020 Census. He backed off after a wave of hostilities that included a threatened boycott.

In July 2019, he realised there was no time left to have the question included in the 2020 Census papers. So he issued an executive order calling on agencies to turn over citizenship data to the Commerce Department.

In the first few days of his administration, President Biden rescinded this directive. Litigation about this issue argued that citizenship data could have politically benefited Republicans when voting districts are redrawn.

The other controversial question on census forms is the one about religion. In 2001, the UK re-introduced the question (not asked since 1851), largely as an attempt to calculate the size of the Muslim population. Accordingly, some 390,000 people in England listed their ‘religion’ as Jedi, a response which occurred in Australia too, with 70,000 recorded in 2001. In 2016, 48,000 people entered Jedi as their religion. New Zealand had the highest per capita Jedi response (53,000) in 2001). Statistics New Zealand’s response was: ‘Answer understood but not recorded’.

The US does not ask the question (nor does Scotland), though the US asks about race and ethnicity. In Australia, the religion question has been ‘optional’ since the first Census in 1911. The box ‘no religion’ is a recent addition.

Curiously (well, we think it is curious), the ABS confirmed that 90% of people have answered the question in recent censuses. If your religion is not listed, the form provides space to enter the data. Because of this response, the ABS holds data on 150 religions in Australia.

The idea of trying to run a country without a census horrifies Peter McDonald, Emeritus Professor of Demography at The Australian National University. He thinks scrapping the census would be ‘a nightmare for planners and governments’.

“The problem in Australia is that we have no reasonable alternative to the census,” he told FOMM this week. “From an accuracy (and privacy) perspective, the census is better by a long way than trying to combine various administrative data bases. Without the census, the States would continually claim that their population was larger than it actually was. And every other group that received funding on a population basis would do likewise.”

Statistics is a dry subject, but one we encounter every day of our lives, so let’s leave you with this. Mathematician Joey Scaminaci’s clever rap ‘Statistics’ attempts to teach the basics in three and a half minutes. It impressed one fan who commented:

“From Australia I thank you, this is very helpful! Gonna ace my big exam”.

Clean Jobs Plan Tackles Climate Change

climate-clean-jobs — Image by enriquelopezgarre, Pixabay

Three big topics of 2021 – Covid-19, Climate Change and Job Creation, are inextricably linked to the future of the planet.

The official climate report is in for 2020, with global temperatures tying with 2016 as the hottest ever recorded.

Although Australians sweltered through an early November heatwave, the summer so far has not been too hard to endure.(except SA,Victoria and NSW are likely to see temperatures exceeding 40C this weekend. Ed

The data cited by the EU’s Copernicus Climate Change Service seemed at odds with images of Madrid enduring its worst snowfall in 50 years. The mercury in Madrid plunged to -10, compared with the January average of 3 degrees.

The New York Times said the heavy snowstorm presented complications for the Spanish government, still struggling with a rising Coronavirus caseload, more than 499,000 in Madrid alone. Spain’s Covid-19 death toll, more than 51,000, is one of the highest in Europe. The government warned residents to stay home, well aware of the temptation for people to venture outdoors.

That’s the nature of climate change, however; extremes in summer and winter and shifting weather patterns in the autumn and spring.

Spain is also struggling with the impact of Covid-19 on its workforce. More than one million jobs were lost during the worst months of the pandemic. Despite short-time work schemes and a third quarter rebound, Spain’s unemployment rate is still around 13%.

Youth unemployment (under 25’s) is 40%.

While Australia’s latest unemployment rate of 6.6% (December) looks good by comparison, the short-term nature of Spain’s jobs policy sounds depressingly familiar.

The International Monetary Fund estimated that in April and May up to a fifth of Spain’s workers were on short-term contracts. Possibly in an attempt to sway the government towards ‘green’ job creation, the IMF revealed that Spain’s housing sector is one of the most energy inefficient in the EU. It accounts for about 16% of Spain’s Emissions Trading System emissions.

“Residential housing would benefit from labor-intensive, climate-compatible public investment,” an IMF report said.

As the IMF observes, a focus on green buildings can provide a demand boost to support recovery, while closing gaps in green infrastructure and human capital.

“This will accelerate the transition to a low-carbon economy and strengthen the economy,” the IMF’s report on Spain said.

It’s no different Down Under, with the built environment said to account for 25% of Australia’s CO2 emissions. Attempts to regulate the building industry to make buildings more energy efficient have been inadequate.

The Climate Council listed energy efficient buildings and urban green spaces as part of its ‘Clean Jobs’ policy paper.

The Climate Council commissioned AlphaBeta, a consultancy specialising in advanced data analysis, resulting in a plan to create 76,000 ‘clean’ jobs.

The 68-page document (with four pages of references), sets out 12 opportunities to put Australians back to work, restart the economy and tackle climate change. The jobs include 15,000 installing utility-scale renewable energy (solar and wind farms, transmission infrastructure and utility-scale batteries). The plan also includes 12,000 jobs in targeted ecosystem restoration, and 12,000 in public and active transport constructions. Another 37,000 jobs are projected to be created in other projects across Australia, including in organic waste, energy efficiency in buildings, urban green spaces and community-scale storage.

This alternative solution to the 840,000 jobs lost to Covid-19 requires less than 0.5% of GDP. Every dollar of public spending is estimated to attract $1.10 in private investment.

The Climate Council’s paper was widely reported in alternative energy circles, but few mainstream media outlets covered the story. This is despite the Climate Council claims it would help people and industries that have been hit hardest by the COVID-19 crisis, especially in regional Australia.

“One in three job openings would require minimal training, meaning that displaced workers, from hospitality workers in Victoria to tourism operators in Cairns, could be rapidly employed.”

The Climate Council ran Clean Jobs briefing sessions with State government representatives after its launch in July. A spokeswoman told FOMM that meaningful actions were taken and worked into State budget announcements.

“We are in the midst of strategising for how we will revitalise the report for 2021, ensuring maximum impact and continuing on its success.”

The latest Australian employment data released yesterday shows an improvement in both the unemployment rate (down -0.2%) and the labour participation rate. Nevertheless, youth unemployment is still up 2.3% for the calendar year, at 13.9%.

Youth unemployment is as high as 25% in some parts of regional Australia. While the under-25’s are being propped up by the Jobseeker scheme, which effectively doubled the NewStart payment, this funding will end on March 21.

An ACTU submission to the Jobs for the future in Regional Australia Inquiry canvassed Australia’s rate of underemployment (8.5% from 9.4% in November). This far outstrips the OECD average, with ANZ describing the underemployment crisis as “widespread” throughout the country.

“Precarious work is increasingly becoming the norm, which makes it more difficult for workers to argue for fair pay and conditions.”

Underemployed workers are more likely to exhibit lower job satisfaction, higher job turnover, poorer mental and physical health and persistently lower income.

The Climate Council’s Clean Jobs paper reminds us that the Australian economy is vulnerable to escalating climate risks.

Property prices are liable to fall up to $571 billion and agricultural and labour productivity by $19 billion in the next decade. Flow-on effects will be felt across the country, and will worsen unless emissions are lowered.

These claims are corroborated by the Reserve Bank of Australia, which has stated that more severe, persistent climate-related shocks could threaten the stability of the Australian economy. The Australian Securities and Investments Commission has labelled climate change a “systemic risk” and the Australian Prudential Regulation Authority has said the financial risks of climate change are “foreseeable, material and actionable now”.

While Australia’s unemployment rate is trending down after hitting 7.5% in July, we should remember that a third of the labour force works less than 40 hours a week. The latest data from the Australian Bureau of Statistics shows the share of part-time employment rose to 32.1% for the year to December (4.149 million).

The Federal Government is pinning its hopes on improving the lot of young Australians through its JobMaker subsidy.

The JobMaker Hiring Credit will be available to employers for each new job they create over the next 12 months for eligible young people aged 16 to 35. The scheme started on October 7, 2020, with eligible employers able to claim $200 a week for each additional eligible employee they hire (aged 16 to 29) and $100 a week for employees aged 30 to 35.

Much noise has been made by and on behalf of the over-35 cohort, arguing discrimination, predicting the JobMaker scheme will further marginalise the long-term unemployed.

Ah well, at least young people who are hired on this basis will be able to afford a portable air conditioner. And here’s hoping everyone, including those hired under JobMaker, will be able to take paid sick leave if they are ill or are quarantining owing to Covid-19 testing

When Aussie families lived in kerosene tin huts

This week we are leaving president-elect Joe Biden to struggle with his Disunited States, to reflect on a time in Australia’s history when homeless people were forced to build kerosene tin huts. This Depression-era story may also give us pause for contemplation as the year-long corona virus pandemic sends many nations into deep recession. No-one wants to use the D-word but also no-one can predict how long countries will have to deal with Covid lock-down periods.

As you may already know, if you also subscribe to our Goodwills Music page, we wrote a song about it. I had the idea couple of years ago when visiting Morven, in south-west Queensland. The show piece of the historical village there is a Depression-era kerosene tin hut. It was built by the late Bob Johnson, whose widow Ethel runs the village.

A sharp-witted reader wanted to know if I was ‘trumpeting’ the new song in last week’s piece about Nellie the Elephant and the price of democracy. I prefer to think of it as drollery (listing it as one of the news stories you may have missed because of the mass media preoccupation with the US election).

Sometimes I have an idea for a song and it loses momentum because I can’t match the lyric to a tune (or maybe I’d rather watch Grey’s Anatomy). Kerosene Tin Hut sat in the drawer for a year or so until She Who Now Also Writes Songs helped me stitch the lyrics together.

As you may gather, we were brought up by parents who lived through the Great Depression (and WWII). They were frugal, good at recycling before it was a thing and were fond of sayings like “never a borrower or a lender be”. Goods could be bought on lay-by, but never on ‘tick’.

That generation was good at saving to buy a particular item deemed necessary for a family – like a fridge, or a washing machine (once the copper and the mangle went to historical villages). I remember once complaining about not having a wardrobe in my bedroom. Dad brought home three wooden butter boxes from the bakery. He stacked them one on top of the other and Mum made a curtain to hang on the front. This is where I stashed my Famous Five collection (I’d grown out of them), and recently collected Mad magazines.

People who battled through the Great Depression (1929-1939), became adept at “making a muckle out of a mickle” as Mum and Dad would say.

Not much has been written about that period in Australia when shanty towns were developed on common land, usually on the outskirts of towns and cities. This happened as unemployed families were either evicted from rented dwellings or worse, lost the homes they were struggling to buy. Small communities formed on Crown land, where the inhabitants did not have to pay rent or rates. They erected corrugated tin huts or, more commonly, kerosene tin huts.

Maleny reader Mike Foale remembers the kerosene tin era, but for different reasons. He contacted me after I’d sent the new song around to a mailing list.

Like others, he asked the obvious question – where did the kerosene tins come from? Kerosene was widely used in the 1920s for cooking, lighting and refrigeration, but also provided cheap fuel for tractors.

Mike recalled from his days growing up on a farm in the Mallee that the early tractors of the 1920s to the 1950s ran on kerosene, as did other stationary engines used on farms.

“Kero was imported in four gallon (20 litre) square-top tins, with a box around the tin for travel security.

“On our farm, the boxes were converted into shelf units. Dad had to sell the early tractor off (a Caterpillar) for lack of maintenance services in the Mallee. So I grew up in the 1940s with draft horses doing the farm work, but the shed was full of empty kero tins.”

Kerosene tins were popular in Tin Town because they could be cut into square tiles with tin snips then stapled together over a bush timber framework.

Western Plains Cultural Centre local activities officer Simone Taylor has researched the ‘Tin Town’ which existed in Dubbo, NSW. The town formed in the late 1920s during the onset of the Great Depression and disappeared 20 years later. Ms Taylor told the ABC in 2018 there was a a lot of stigma attached to ‘Tin Town’.

“The shanty’s residents were pitied by the people of Dubbo. I think the people in Tin Town were getting on the best they could, but in newspaper reports it’s clear the town was seen as a social issue to solve.”

Tin Town survivors recall the hardships – there was no electricity and only a single community tap to access water. Council collected rubbish and sewage every week for a small fee.

In Dubbo, as in other locations where Tin Towns evolved, kerosene tin huts were erected on Crown land. They did not appear on official maps, so historians rely upon people’s memories and references in old newspaper articles.

Australian National University historian Joan Beaumont told the ABC that Australia was one of the countries worst hit by the 1920s crash. Communities that relied on wool and wheat exports suffered the most as global demand fell away. While the evidence suggests that Tin Towns housed families and pensioners, Professor Beaumont said single men without strong family connections were more likely to live in tin shanties.

Why is this relevant today, you might ask, when our wealthy are uber-wealthy, well-educated professionals are doing well (in two-income households) and the middle classes are, well, in the middle?

The massive disruption to the orthodox economy caused by Covid-19 has forced even conservative governments to use Keynesian economics to manage the crisis. The theory evolved by John Maynard Keynes advocates increased government expenditure and lower taxes to stimulate demand. This, rather than monetary economics (controlling the supply of money), is more likely to help avert a global depression.

There is a domino effect when people who depend on a wage to pay rent or service a mortgage, not to mention car loans, credit cards and ‘60 months nothing to pay’ consumer lures, lose their source of income.

The job goes, the search for work is fruitless, the bailiff comes calling. Suddenly, you are living in your car (the 21^st century version of the tin hut). Those of us with a proper roof over our heads ought to count our blessings – count twice when rain falls.

As this recent Sydney Morning Herald article informs, the early help offered to get homeless people off the street in 2020 is being wound back. While the official homelessness figure is north of 116,000, the Australian Homelessness Monitor found that 290,000 people sought homelessness services in the year before the pandemic.

Homelessness numbers fell between April and June this year as a result of Federal government assistance, a moratorium on evictions and a targeted campaign to get rough sleepers indoors. But the future is looking somewhat bleak as supports come to an end.

Telling people to stay home during a Covid spike is all well and good if you have a home in the first place. The alternative may well be descensus in cuniculi cavum (descent into the cave of the rabbit), or in 2020 vernacular, down the rabbit hole.

Australia’s most over-analysed Budget

We’d been out to dinner on Budget night, so turning on the TV later, I caught the last comment from Lee Sales: “That completes our first hour of this special Budget coverage.”

Budget analysis is a challenging topic for extended television viewing. The ABC borrowed David Speers from Insiders (wearing a blue suit and maroon socks), who took over to talk to a bank of television sets, splitting this up with breath-taking interludes (“Crossing now to Canberra for insights from…”).

It continued on Wednesday morning, while having my first coffee of the day with ABC Breakfast. Good television needs live action images and variety. I was bemused by the vox pops segment when a reporter went into the streets of Parramatta to interview everyday people. It was surely accidental than in the background a homeless person strayed into view, trundling a supermarket trolley, laden with the detritus of life on the streets. As Ralph McTell once famously sang:

“She’s no time for talking, she just keeps right on walking
Carrying her home, in two carrier bags…”

Such was the need for live footage, we had to endure repeated scenes of Prime Minister Scott Morrison and Treasurer Josh Frydenberg walking across a forecourt, huge umbrellas clashing in the wind as they sheltered from the rain. Around them, photographers, reporters and camera operators were likely making memos on their phones to claim laundry expenses. The pair stopped briefly and touched elbows (photo op) before going inside, leaving the media pack to pat dry their hair with tissues and soggy hankies.

Also in the live footage were scenes of Budget papers rolling off a printing press and being stacked in boxes.

Given that anybody with an internet connection can download the entire set of Budget papers at no cost, the printing of thousands of hard copies does seem like over-kill.

I asked a Treasury official: “How many copies were printed and what is the total cost?”

OFFICIAL

Hi Bob

Thanks for your enquiry.

We do not yet have final costs.

Media Unit -The Treasury

Now you see why journalists spend much of their time cultivating contacts who can find out stuff not yet made official.

Clearly I do not have such contacts (any more) but point you instead to this story, about the Canadian Government’s printing contract in 2017.

Despite a widespread move to the paperless bureaucracy, Finance Canada had committed more than $500,000 to print Budget documents. Opposition members were not impressed.

In 2015, I discovered a Choice Magazine survey of consumers’ household budget worries. At the time, rising electricity costs was the main preoccupation and it is still in the top three. The policy thrust by the Morrison government in 2020 is to push liquefied natural gas (LNG) as an energy alternative.

Although the solar panels on our roof cost around $7,000 to install, our power bills for the calender year so far total $33 and we are now in credit.

Those who made an investment in solar panels in 2015 would be enjoying similarly small power bills, more attractive feed-in tariffs and, five years on, closer to breaking-even on the capital cost of installation. Just saying.

The annual Choice householder survey update in June found that private insurance had replaced energy costs as the number one worry. Some 81% were concerned about the costs of health insurance – up from 75% 12 months ago.

Even in May 2019, long before COVID-19 disrupted the economy, Choice said 65% of people were “barely squeaking by” in terms of household finances.

The June 2020 survey found that private health insurance, fuel and electricity are the main worrying items for households, one in four of which are struggling to make ends meet.

A report from APRA shows a continuing trend for young people (20-49) to ditch private hospital cover because of premium costs.

A one-page item in Tuesday’s Budget will mean a lot to young people, families and people with disabilities. The Government has increased the age at which dependent children can be covered under a family PHI policy. From 1 April 2021, the Government will increase the maximum age of dependants for private health insurance policies from 24 to 31 and remove the age limit for dependants with a disability.

The aim is to encourage young people to continue with PHI when they reach the age of 31 (the age at which premiums for Lifetime Health Cover starts, if the customer has not had private health insurance prior to that date).

Locked up with Laurie, Kerry, Laura and the rest

Labor PM and Treasurer Paul Keating is credited with introducing both the budget ‘lockup’ and Budget night’s televised speech in 1984. I have worked on several Budget lockups over the years. Journalists from all over the country congregate in a (large) locked room within Parliament House.

At 2pm, Treasury officials distribute Budget documents to scribes, who then have time to analyse the key points and prepare stories for the next day’s edition (and post-Budget analysis for TV and radio). Scribes keep on filing updates until their publication deadlines and then adjourn to the bar or a late-night restaurant.

The real Budget stories often surface weeks after the documents have been made public. Business scribes in particular enjoy input from sources in the accounting profession: “Cracker yarn there, Bobby, Budget Paper 4 page 97, 7.1”.

As members of Australia’s rapidly ageing over-70s cohort, we were mild amused to find we are yet again to be stimulated by ScoMo. We were already the recipients of two payments of $750 (each) and now are to receive $250 in December and again in March 2021.

“Crivens”, as my Dad would say (informal Scottish dialect for an expression of surprise).

This money has already been earmarked for the little luxuries one struggles to find within the constraints of a fixed income budget. In my case that may well be a year’s supply of guitar strings, a new set of harmonicas and an ocarina (don’t ask). It may be wiser to put both payments towards a return flight to NZ to visit whanua, when allowed to do so.

As usual, individuals will scrutinise only the parts of the Budget that directly affect them: welfare payments, tax cuts, low-income tax offsets, Job Maker etc.

But if, as the Choice survey highlighted, 65% of households are ‘barely squeaking by’, I can’t see the government’s wage subsidy plan will do much to alleviate those concerns. The Job Maker scheme offers employers $200 a week for every under-30 worker they employ (minimum 20 hours a week). It will also pay $100 a week for employees aged 30-35. The government says this will create 450,00 jobs, whereas Labor says 968,000 unemployed people over 35 will miss out completely.

It remains to be seen if this wage subsidy scheme will be rorted by employers, as has happened with such initiatives over the years. The usual outcome of such incentives is that employers sack people hired under the subsidy scheme once it lapses. (Not to mention the possibility that over 35s will find themselves out of a job that has then been offered to a worker who attracts a subsidy. Ed)

But hey, I’ve already received $1500 and now promised $500 more from ScoMo for doing sweet bugger all. So I should shut up now, eh?

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It’s a Nation, Not Just an Economy

economists-recession-covid-19 — Recession? What recession? Image by www.pixabay.com

It’s traditional to write about economics and economists at this time of year, the end of the financial year in most jurisdictions. Publishers like to ask economists to offer their predictions for the year. The cruel editors then go back a year later and mark their score cards.

Forecasts are all very well in ‘normal’ times, but few had forecast a deadly global pandemic that (so far) would infect 10.5 million people and kill 511,000. Even in Australia, where the progress of the virus has been carefully monitored, we have had 7,832 infections and 104 deaths. The long-term effect on economies – ours and every other country’s – is yet to be seen.

Trying to forecast economic trends for the next year or two has been rendered difficult by the ongoing effects of COVID-19. Nevertheless, economists will try, because they are (in my experience) optimistic people. Before we go to our panel of experts (he said, sounding like David Speers on Sunday morning), let’s recap what the politicians are saying.

Prime Minister Scott Morrison recently promised to lift economic growth by “more than one percentage point above trend” (an average 4% per year), to 2025.

Economists from 16 universities in seven states came to a less ebullient conclusion, forecasting annual GDP growth averaging 2.4% over the next four years, “tailing off over time”.

22 economists were polled by The Conversation, an independent alliance of journalist and academics, and delivered their forecasts for the next four years.

The headline view is a weak recovery, getting weaker as time goes by, amid declining living standards. The panel expects weak economic growth in all but one of the next five years. The panel comprises macro-economists, economic modellers, former Treasury, IMF, OECD, Reserve Bank of Australia (RBA),. financial market economists and a former member of the RBA board.

The panel included well-known doomsayer Steve Keen, who writes for Crikey and other publications. Keen was the economist who in January forecast a 75% probability of a recession.

The ANU’s Crawford School of Public Policy Visiting fellow Peter Martin wrote an 18-page report on the survey, warning that the results imply living standards 5% lower than what the PM expects. Moreover, the panel expects unemployment to peak at 10% and to be still above 7% by the end of 2021. Wages are unlikely to grow beyond 0.9% in 2020, lower than the rate of inflation (expected to be 1.2%).

I’m frankly surprised The Conversation found 22 economists prepared to forecast the future, particularly as it seems a second wave of COVID-19 is upon us. One economist withdrew from the panel before the poll saying, “It’s a mug’s game now”. Another who did participate said forecasting had been reduced to “guessing”, in the context of an unprecedented event.

The panel more or less agreed on expectations for incomes and production. They expect those figures to shrink when the June quarter figures are released, confirming that Australia is in a recession. The panel forecast an average 4.5% decline in GDP for 2020.

So what’s the good news?

The Government’s budget deficit will be easily financed, with the 10-year borrowing cost at 0.9% and the panel forecasting 1.4% per year thereafter and not expected to rise until late 2021.

The RBA has made a commitment to buy as many bonds as needed to keep the figure low. For this reason alone, Australia has maintained its AAA credit rating.

Mining investment is expected to continue its recovery in 2020 into 2021, after huge falls between 2014 and 2019, the latter attributed to the collapse in infrastructure projects and large LNG plants being completed.

It might be bread and circuses, but don’t forget the Federal Government is unleashing a second round of stimulus payments on July 10. Those eligible received the first payment between March and April. Stimulus payments include $750 for eligible pensioners, seniors, carers, student payment recipients and concession card holders.

Two stimulus payments totalling $1,500 might not seem like much but in terms of people with no disposable income, it is an absolute windfall.

A homeless person could spend his or her $750 on a swag or a Himalayan standard sleeping bag, fleecy pants and jacket, thick socks, underwear and a cheap pre-paid phone. They might even have money left over for smokes. If you are employed but have no disposable income, you might be tempted to yield to those ‘sale ends tomorrow’ exhortations to buy a smart TV, laptop, tablet or mobile phone.

Whether you are unemployed and poor or the working poor, the main problem is a lack of disposable income. The Conversation’s panel expects disposable income to fall on average 4.5% for the year to December 2020. Most also expect household spending to decline in calendar 2020 (by 4.3% on average).

Gloomy as this picture may be, it redresses the balance between reality and the daily ‘spin’ from State and Federal governments.

In his 1964 book, A Lucky Country, Donald Horne said Australia was “a lucky country run by second-rate people”. By that he meant that Australia was lucky to be blessed with natural resources and agricultural wealth, despite its second-rate political and economic system. Decades later, it seems, more Australians agree with Horne’s harsh assessment, which has been a set text in universities since it was published.

A 2018 survey showed that 40.56% of Australians have lost faith in the notion of democracy since 2007. Successions of administrations – Rudd, Gillard, Abbott, Gillard, Turnbull and Morrison – have evidently lost a lot of the people somewhere along the line. The Guardian mentioned this survey in a story about politicians billing taxpayers for doubtful travel expenses.

Trust and Democracy in Australia shows a majority of Australians have lost faith in democracy, from a high of 86.5% trusting in 2007 to 40.56% in 2018. As The Guardian’s Christopher Knaus and William Summers comment in their article on travel rorts, “On current trends, that would leave fewer than 10% of Australians trusting politicians and political institutions by 2025”.

We who live in this vast, under-populated democracy should be grateful for what we have. The sun is still shining, the water is potable, it’s a mild winter thus far; the supermarkets have replenished their shelves; the footy is back and life continues relatively untrammelled. (Ed: Broncos fans may not agree).

All up, Australia is a considerably better place to be than the favelas of Rio De Janeiro, the slums of Kolkata or Mexico City or even one of Donald Trump’s Republican States that thought the coronavirus was ‘fake nooz’.

Even in the UK, our far away traditional Motherland, last month’s relaxing of the COVID19 lockdown appears to have led to the emergence of 10 new hotspots across England. This unhappily coincides with news that the level of public debt has surpassed the UK economy for the first time since the 1960s.

If you are still feeling besieged, spare a thought for migrants forced out of Yemen at gunpoint by the Iran-backed Houthi militia that controls most of northern Yemen. The militia has expelled thousands of migrants since March, blaming them for spreading the coronavirus. According to a report in the New York Times this week, they were dumped in the desert without food or water.

Compare that to young Queenslanders complaining about not being allowed to dance at their local nightclub.

It’s all about perspective

(The Democracy 2025 report is available for download here):

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