It’s everyone else’s fault

Jim Chalmers has reacted to news that Australia's growth has been an anaemic 1 per cent (which with population growth around 2.5 per cent means individually we've all gone backwards 1.5 per cent) by blaming 'global economic uncertainty'.

If 'Gentleman Jim' and his mates, hadn't been holding the economy to ransom for their union Siamese twins, things could have been quite different.

In fact, if we rolled back the economy to 2007 before he and his predecessors started fiddling – and we're not just talking Swan, the grand old man of the current gang, but Bowen, Morrison, and Frydenberg (incompetence is bipartisan at times) – things could be quite different now.

The major factors limiting our growth aren't 'global economic uncertainty' but self-induced policy harms. We need to increase national productivity, but almost everything this government has done, and a lot of what previous governments have done, has been to reduce productivity.

The Treasurer points to a growth in government expenditure as being the only growth in the economy, but this is in fact part of the problem. Programs like the NDIS and health are out of control. These do not create growth, they redistribute it. So a growth in government is actually just cutting the pie differently so that business gets less and certain types of consumers get more.

For the most part it is business that provides us growth by investing to increase profits and in so doing employing a better paid workforce as well as providing a tax base that can support more redistribution.

Then there is the huge migration intake – the equivalent of a city the size of Canberra every year – that diverts resources to housing, away from more productive pursuits.

The government has been financing its expenditure by borrowing, and this has led to inflation, another drag on investment.

Then we have the industrial relations laws which are forcing businesses to deal with unions rather than employees. This is raising costs and lowering productivity for large businesses, and may even drive some small businesses out of business because they don't have the resources to deal with the bureaucracy.

The botched energy transition is also raising energy costs and diverting resources from producing wealth to building renewable energy projects and the networks and storage to try to support them. Instead of giving us more power more cheaply they are actually giving us less power at a significantly higher cost.

Recent government decisions on mining projects, like the Blayney gold mine, also discourage investment in industries with high productivity, but long lead times and heavy capital requirements, like mining. (The Queensland government has also played its part with its super profits tax mining royalty, and other states have similar issues.)

All of this has led to the Reserve Bank deciding to leave rates higher for longer (although one shouldn't assume rates are going back where they were two years ago).