Australians’ Standard of Living Declined Nearly 10 Percent: Shadow Treasurer

Minister for Industry, Energy and Emissions Reduction Angus Taylor at a press conference at Parliament House in Canberra, Australia on Feb. 17, 2022. AAP Image/Mick Tsikas

The standard of living for Australians has fallen by over 9 percent since Labor came to power, Shadow Treasurer Angus Taylor said as he expressed his disappointment over the low GDP numbers.

It comes after data revealed that the Australian economy grew by a paltry 0.2 percent for the June quarter, marking its worst performance since the 1991 recession.

However, GDP per capita fell again, down 0.4 percent in the same period.

“It’s gone backwards now for six quarters in a row—that’s 18 months,” Taylor said.

In response, Katy Gallagher, minister for finance, called it political commentary.

“Obviously, they’re there to make a political point. Our focus, Jim [Chalmers] and my focus, is on making the right decisions for the right time,” she said.

The statistics showed an increase in government spending, a move Labor defended, saying it is the key “growth driver.” But the opposition launched sharp criticism of the same.

“Under those circumstances, if you add to spending … it adds to inflation. That’s the situation that economists are making very, very clear right now,” said Taylor.

He also added that the cost-of-living crisis can’t be solved “by throwing money at it.”

Gallagher refuted this and defended Labor’s decisions about cost-of-living support in the last budget.

“Opposition policies to make $100 billion worth of cuts at a minimum if they were in government would have seen a very different set of results,” she said.

Different Tools

Treasurer Jim Chalmers also came under heavy scrutiny for his comments on the Reserve Bank of Australia (RBA) “smashing the economy” with interest rate hikes. The opposition demanded he take responsibility for slow economic growth.

Gallagher supported her colleague and emphasised that the bank’s got a job to do—to get inflation down.

However, Taylor noted that the RBA has one lever—interest rates—while the government has many at its disposal.

“Whether it’s productivity policies, industrial relations, immigration policy, or energy policy. They have lever after lever available to them to get the economy back on its feet,” he said.

He said it is the government’s failure to use these levers that is leading to “an absolutely disastrous situation for households.”

“The government is now fighting on two fronts … Number one is inflation is stuck. Core inflation hasn’t moved since January,” he said.

He added that this situation was unlike other major advanced countries in the world that were also battling inflation.

“We’re seeing interest rate cuts in other countries, but not in Australia,” Taylor said.

Now, with GDP per capita going backwards for 18 months, he said the government has another major problem to solve.

“And just throwing some money at it … that’s the wrong answer. It’s not going to solve it.”

Figures released by the Australian Bureau of Statistics on Sept. 4 showed weak GDP performance, with a fall in household spending. The year-on-year GDP growth, seasonally adjusted, was 1 percent.