In mid-June the Morrison coalition government in Canberra announced their intention to boost GDP growth rates in Australia by an average of 3.5 per cent each year for the next five years. (1) The economic assessment rested upon earlier fears about the plight of the Australian economy during the COVID-19 pandemic. The government has, nevertheless, hidden behind spurious facts and figures to present an image of effectively dealing with the crisis. Official unemployment figures and totals of those receiving benefits are notoriously misleading and designed to hide the true extent of the problem by using bureaucratic measures.
Recent information from the Australian Bureau of Statistics (ABS) has revealed approximately 2.3 million Australian workers lost employment in April and May. Australia has a relatively small workforce of about eleven and a half million, with present under-utilisation at a record high of 20.2 per cent. The numbers of those actually in employment has also fallen by 835,000 since March. (2) Not all of those concerned are officially recorded on CentreLink records.
The Morrison government is, at present, considering a huge public spending package while the Reserve Bank of Australia (RBA) has been lobbying for a continuation of the emergency economic relief programs beyond 30 September. The RBA is clearly worried about the longer-term economic considerations after government support programs for working people cease.
The Australian economy has, in reality, been in serious relative decline for decades; Canberra now has to contend with a likely one trillion dollar debt by the end of 2021. (3) A recent assessment conducted by the International Monetary Fund (IMF) found the Australian economy was 'on track to be the weakest seen in almost a hundred years'. (4)
Economic criteria from reliable sources reveal GDP growth rates from the past fifty years show, despite annual fluctuations, a general decline from a peak in 1970 to the present time:
1970 – 7.17 per cent
1980 – 3.03 per cent
1990 – 3.57 per cent
2000 – 1.93 per cent
2010 - 2.07 per cent
2018 - 2.94 per cent (5)
Economic projections for 2020 are questionable at present, although likely to be hovering between one per cent and zero, at best. Negative projections have already been made. It has, for example, been estimated the Australian economy has already shrunk by 4.1 per cent this year, to date, with further reductions likely toward the end of the year. (6)
The declining GDP growth rates coincide with a general decline in traditional manufacturing industries and so-called localised and regional Free Trade Agreements (FTAs) which have been the dominant mode of thinking and policy implementation during the past four decades.
Any serious attempt to boost Australian GDP growth rates would, therefore, swim against the tide of decades of decline and is not likely under present circumstances. In fact, economic projections by the Morrison government have already been questioned by a leading economist, David Plank, employed by the national ANZ Bank, who, stated 'he saw little chance of lifting growth to 3.5 per cent on a sustained basis'. (7)
Secondly, moves by the Trump administration to implement Cold War policies in an attempt to penalise China have serious implications for Australia: China is the country's biggest trading partner. The Trump administration has recently placed technological supremacy 'at the heart of its battle for strategic supremacy over China', using export controls and other regulatory measures to restrict China's access to western technology. (8) Any item, controlled by the US, which has been deemed useful for China's advantage has been targeted, 'with huge consequences for universities, scientists and entrepreneurs' in Australia. (9)
A recent report published by the Australia-based United States Studies Centre has already acknowledged the country will have to take tougher measures against China to satisfy the new US regulations. (10)
The moves have been accompanied by a general acknowledgement that China has successfully expanded its position in the Asia-Pacific region, challenging US-led traditional hegemonic positions. The regional assessment, conducted by Jack Keane, a retired US general and one of Trump's closest military advisers, has formed part of a US-led program encouraging Washington to confront China. (11)
In the US the FBI has already reported about a thousand investigations targeting perceived Chinese interests being under-way with emphasis placed upon what were regarded as critical fields including artificial intelligence, robotics and quantum computing. A total of nineteen arrests for alleged violations of the regulations have already taken place. The Trump administration now expect Australia to follow suit, with similar measures designed to transform global supply-chains to favour US economic domination.
Returning to the position of the Morrison coalition government in Canberra, their political spin and economic projections are unlikely to be realised for two reasons: there is no reason to believe Morrison and his cronies have established realistic economic assessments from reliable sources; or secondly, that they intend challenging the US position on China which has far-reaching implications for the Australian economy.
We need an independent and socialist Australia!
1. Growth ambition 'a huge ask', Australian, 16 June 2020.
2. Unemployment update, The New Daily, 18 June 2020.
3. 'Trillion dollar debt' by 2021, Australian, 28 April 2020.
5. The World Bank, GDP Growth Rates, Australia, 1970-2018.
6. Australian, op.cit., 16 June 2020.
7. Australian, op.cit., 16 June 2020.
8. US puts screws on our high-tech China alliances, Australian 16 June 2020.
11. China eclipsing US in Asia, says Trump advisor, Australian, 5 May 2020.