I recently watched the federal treasurer, Scott Morrison, proudly proclaim that Australia was in “surprisingly good shape”. Indeed, Australia has just snatched the world record from the Netherlands, achieving its 104th quarter of growth without a recession, making this achievement the longest streak for any OECD country since 1970.
Australian GDP growth has been trending down for over forty years
Source: Trading Economics, ABS
I was pretty shocked at the complacency, because after twenty six years of economic expansion, the country has very little to show for it.
They invited a diverse group: all the major banks were asked, as well as representative of non-bank lenders, mortgage insurers, valuers, community representatives, regulators, and yours truly. We were asked to consider four topics:
To what extent have credit standards declined in Australia in recent years?
Have declining credit standards caused an increase in the number of loans in arrears and the number of repossessions?
Oh dear. WhenÂ Nassim Khadim from The AgeÂ asked me to comment yesterdy on the electoral assertion being made by the Liberal Party–that rising State debt was putting upward pressure on interest rates–I responded thatÂ the assertionÂ was:
“Total, total bullshit. It’s like saying that somebody dropped a pebble into the ocean and that caused a tsunami. And you can quote me on that.”
Well, I expected just to see the “pebble and tsunami” analogy turn up in the report. Instead, I saw the first two sentences of the above–and learnt the hard way that editorial standards at Australia’s major dailies are no longer as reserved as I took for granted:
My submissionÂ is here for speedy reference. Apologies to all for the absence of posts recently, but if can be allowed some Aussie vernacular here, I’ve been busier than a blue-arsed fly in recent weeks, and (now you’ll have to allow a very inept mixing of metaphors!) won’t get my head above water for some weeks yet.
It’s not yet the main topic of debate between Liberal and Labor, but some of the arguments in Debtwatch have at least made their way into Hansard courtesy of a speech by Laurie Ferguson. The full extract from the speech is shown below.
“This makes a mockery of the claim by the Prime Minister that we have never been better off. Whilst the Howard government crows about the success in the economy, which was largely inherited from Labor and fuelled by the raw materials demands of India and China, there is an alternative reality of an out-of-control personal debt spiral. Steve Keen from the University of Western Sydney writes:
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