ON AIR: The Country

12PM - 1PM

Mike's Minute: The world is waking up to our weakening economy

Author
Mike Hosking,
Section
Video,
Publish Date
Thursday, 27 June 2019, 9:50AM

The International Monetary Fund (IMF) has come to town to tell us the bleeding obvious. Our economy has lost steam.

We have been saying this each and every month this year, and most of last year to boot. The IMF has seen what we saw a year ago: a series of policies that could lead to nothing else but a slowdown.

The reemergence of unions, through large pay claims like the teachers' and nurses'; the Employment Relations Authority who just this week handed out living wages or higher to Mitre 10 franchisees; the spectre of fair pay agreements where entire industries get told what to pay and have no say over their own work force; a manufacturing sector that's stalling and certain parts of it now going backwards.

We have a services sector where the purses are snapping shut, and they're snapping shut because of confidence, which has fallen through the floor.

We have an expenditure programme that has shifted billions out of the productive side of the economy and into welfare.

We have a jobseeker plan whereby those without work are no longer pressured to actually find it. The queue has grown by 13,000 people - and the bill has risen with it.

We have state housing for life where not only don't you have to leave anymore, but the queue has grown to record levels - and by record levels as well.

We have a surplus that has basically vanished, and policies that are not costed, like the gun buyback, that will most likely eat whatever is left of the surplus.

We have growth numbers that now look anaemic - 0.6 per cent in the past quarter.

Add to that migration, which will slow, which means labour issues will get worse in an already tight market.

A construction sector, the sector that got us the 0.6 per cent instead of something worse, at capacity.

And as Cameron Bagrie told us the other day, an economy running at 80kmh in a 100kmh zone.

Plus the prospect of Australia sucking talent out, or preventing it heading our way now that iron ore is back, gold is hot, rare earths are to be found worth $100 billion, and they're spending more on infrastructure than our entire GDP put together.

The IMF didn't need to look hard to find all of this. Fortunately we're still selling stuff to the world and still getting good money for it. But if you were here three years ago looking around, then came back today and looked again, your response would be "what the hell happened here?"

And sadly I think we all know the answer, don't we?

 

ON AIR: The Country

12PM - 1PM