The Australian economy: the continuing crisis

Written by: (Contributed) on 30 March 2025

(Source: freepikcom)

An OECD report dealing with the economies of member countries has revealed the fragile nature of the Australian economy. The report has been presented by economists using economic data, which can be used by politicians to provide a misleading picture of many of the problems arising.

The section of the report dealing specifically with percentage change in real household disposable income, however, has revealed how the Australian working class and lower socio-economic groups have borne the brunt of recent economic problems far more than their counterparts elsewhere.

The present OECD report has shown the global economy is in relative decline, particularly when assessed through the diplomatic hostilities between the US and China.

GLOBAL GDP

2024 - 3.2%
2025 - 3.1%
2026 - 3.0%

US 2025 - 2.2%
2026 - 1.6%

CHINA 2025 - 4.8%
2026 - 4.4% (1)

China will inevitably overtake the US as the world's biggest economy sometime in the future, sooner rather than later, if not toward the end of the present decade, then the next one. The problem arising should be assessed as remaining in the background of diplomatic hostilities between the two countries, with many of the dramas being played-out in the Indo-Pacific region, drawing Australia ever closer to real-war scenarios.

The Australian economy, meanwhile, continues to bump along the bottom, with economic growth of 2.5 per cent for the present year, with a projection falling to 1.8 per cent for next year. (2)

The Australian figures also reveal a volatile economy; growth rates of just 0.6 per cent were recorded in the December quarter last year. (3) The growth rates do not appear sustainable, but fluctuate regularly.

The growth rates, furthermore, show Australia's fall significantly below those of the G20, where average growth rates of 3.1 per cent for this year are expected to only fall slightly to 2.9 per cent next year. (4)

Australia's inflation rate also continues to hover around 2.4 per cent, only slightly being reduced to a projected 2.2 per cent next year. (5) It continues to be a problem.

The figures also have to be studied in the context of Australia's growing debt; in 2004 gross public debt amounted to 15.2 per cent of GDP, by 2024 it had risen to 57.9 per cent. (6) By the end of this year it had been projected to rise to 60.6 per cent. (7)

When the economic data is linked to living standards, however, the real problems facing Australia can be accurately established.

The OECD report revealed that while the average gains in living standards of other member countries averaged at 5.5 per cent, Australia's had slipped by minus 8.3 per cent. (8) The figures are all the more appalling when studied in the context that they are an average for all Australians; the working class and lower socio-economic groups on basic Award terms and conditions of employment, pay far more of their disposable income for basic necessities than higher socio-economic groups.

The study, furthermore, found that on average, Australian workers were working longer than the standard working week of 38 hours, with overtime seemingly becoming essential for lower paid workers to even make ends meet.

The massive casualisation of employment has also pushed millions of workers into vulnerable positions where poverty remains a problem, looming on the horizon.

Those on the Australian Forbes rich list, however, continue to amass huge profits, up by nearly ten per cent to February this year, from last year. (9) The present economy is heavily stacked in their favour, as they exploit the working class for every last cent they can grab. Economic rationalism and the implementation of race-to-the-bottom production techniques have worked wonders for the business-classes and corporate sector.

The federal Budget acknowledges the cost-of-living crisis, but offers on limited measures for dealing with it.

An economic crisis would appear to be looming!

1. 'Serious volatility', The New Daily, 18 March 2025.
2. OECD slashes growth forecast on global unrest, Australian, 18 March 2025.
3. Decline in living standards undermines 'plucky rhetoric' of economic recovery, Australian, 12 March 2025.
4. Australian, op.cit., 18 March 2025.
5. Ibid.
6. Debt blowout worst in developed world, Australian, 19 March 2025.
7. Ibid.
8. Australian, op.cit., 12 March 2025.
9. Website: Forbes – Australia's 50 Richest, 12 February 2025.