Good afternoon.
The economic news kept rolling in this week, and it’s hard to escape the fact that all of it was pretty grim.
The release of the seventh intergenerational report (IGR) got the ball rolling on Monday, with what has become a regular warning that an ageing population is no good for the nation’s finances or the economy in the long term.
The report projected that by the mid-2060s we’ll have more deaths than births. That’s a bit alarming in its own right, but it also brings home how a populist-led effort to slash migration could undermine the budget and the economy over coming decades.
And you know you’re in trouble when the country’s leaders are banking on artificial intelligence to provide the rising living standards we expect and demand.
Yes, this is the same technology that some tech execs reckon has a 10% chance of wiping out humanity. Without it, though, it’s difficult to see how we can lift ourselves out of our productivity slump, as the IGR showed. Good luck designing regulation that safely gets the best out of AI and secures our future prosperity.
Returning to the here and now, jobs figures on Thursday showed a small lift in the unemployment rate to 4.6%.
That’s still pretty low. But the data also showed that more people are scrambling to find second jobs as they struggle to make ends meet. It matched a report earlier this month that showed a record share of workers were holding down more than one job.
We also had the latest statistical report from the long-running Hilda survey. Among the findings were that half of 18- to 29-year-olds now live at home with their parents. There was plenty of evidence in there that more households are struggling, not least because of the ridiculous cost of putting a roof over your head.
That cost is set to get higher next Tuesday: the Reserve Bank is widely expected to deliver a fourth interest rate hike in its efforts to get inflation back under control.
Oh, and did I mention fuel prices keep going up?
What a week.
Quality v quantity
The cost of living is clearly an issue that lives at the front of voters’ minds, and that was reflected in the questions that rolled in. Political editor Tom McIlroy and I answered a selection below.
On the topic of growth and productivity, Angelika asked if slower growth could be a good thing: “Why not curb growing profits as well as subsidies for big corporations and use their taxes for another kind of growth – rekindle homegrown manufacturing and invest in the services we will need for the predicted demographic changes?”
Patrick Commins writes: Well, Angelika, let’s hope slower growth could be good, because that does seem like what we are going to get. There is a growing recognition that quality of growth matters at least as much as quantity, but it’s early days and it’s not clear how to get the balance right.
In the same vein, countries around the world are also aware that having more capacity to make stuff at home is in their best interests (the federal government has its future made in Australia strategy). Again, there is a trade off with efficiency and maybe productivity. Industrial policy – that is, strategic subsidisation of private businesses – is a fraught enterprise and we need to be careful we don’t pour taxpayer dollars into propping up firms whose raison d’etre is to lobby governments for more cash.
Kathy had a question about inflation and rising interest rates: “When is the national media going to recognise the real impacts of the US-Israel war on Iran on the Australian economy and print some facts and figures that demonstrate what the major real inflation driver is?”
Patrick Commins writes: The national media is constantly talking about the impact of the US-Israel war on Iran, mostly as it relates to high fuel prices. We ran a story yesterday on how Australian diesel prices could surge above $3 a litre if Donald Trump cuts off US diesel exports amid the hostilities in the Middle East. But it also affects other areas, like fertiliser and products that use oil as a key input (good example are some construction materials). The facts are clear to see every time we fill up at the service station. Reserve Bank officials talk often about the challenge they face in managing “temporary” shocks – like Trump’s war – that don’t prove so temporary. Fuel costs seep through to the wider economy and into costs for a range of businesses, driving up prices for consumers. At the same time, the RBA and most economists believe our low productivity economy is making it harder to grow without pushing inflation higher. This second more structural problem, combined with the global energy shock, is why we’re getting another interest rate hike.
Reporting on One Nation
One Nation continued to make headlines this week. Barnaby Joyce persisted in being a pain in the neck for the major parties in an effort to wrestle the political agenda away from the Coalition and Labor.
Led by Sarah Martin, the podcast The Populist revealed Pauline Hanson’s right-hand man James Ashby is enjoying generous benefits as a result of his role working for One Nation.
Many of you wrote in with questions about our reporting, and Tom McIlroy answered them below.
Sheila sent us an email and observed: “I feel the media has been assisting Hanson’s image by continually highlighting her every word – good or bad”. Another reader, Robert, had a similar question: “Does this attention increase her stature and would they be better off ignoring her?”
Tom McIlroy writes: Lots of readers, and family and friends, express the same frustration. We don’t cover everything that One Nation, or any party, says and does, but we try to give voters all the information they need to make informed decisions. One of the other calculations at the moment is what effect Hanson’s statements, policies and actions are having on the broader political landscape. How the other parties are responding to her is making a big difference in Australian politics. It’s for this reason that we need to cover One Nation closely.
We would not be doing our jobs if we ignored the political parties that our readers do not like. Imagine if another news outlet decided to ignore a party because they were viewed as being too conservative or too progressive? We would rightly criticise that decision as being bad for democracy. However, we need to avoid stenography in our reporting and be transparent with readers when we make mistakes.
Debbie had a question about the Guardian and the ABC being barred from press conferences by Pauline Hanson’s party: “What is astonishing to me is why there hasn’t been greater solidarity across all media groups against accepting One Nation’s ban of certain media outlets at their events?”
Tom McIlroy writes: Parties like One Nation try to ban specific media outlets because they don’t like the increased scrutiny that comes with their reporting. Guardian Australia and the ABC have released a joint statement objecting to these bans, as has the Federal Parliamentary Press Gallery. There is solidarity among journalists working in Canberra, and we cooperate and share information wherever we can. The most important thing to note is that bans do not work. Our reporting has been just as strong despite efforts by One Nation to cut out Guardian Australia.
Photograph: Sarah Wilson/AAP
