A difficult year is rapidly coming to an end. The Australian Treasury and central bank remain cheerful, especially in public comment and (presumably) advice to government. House prices are falling and look set to fall further. Wages are still showing little growth in real terms except for employment in various State and Federal governments. Wages cannot rise in real terms until national productivity is on a steadily rising trend, and there is no discernible policies to raise productivity.. Household debt continues to rise while household saving falls, approaching zero.
Threats of a ‘big stick’ against energy companies seem to generate nothing but veiled threats. Energy prices will keep rising. The Federal government seeks input on immigration state by state, and the Prime minister seems set on a reduction in annual immigration. Meanwhile infrastructure spending needs to be increased merely to improve speed of people movement, especially in future global cities in Melbourne and Sydney.
The bottom line: Australia is suffering several unsustainable trends that will almost certain to produce a deep recession.
As in other Western nations, politics has become unusually divisive.
Oppositions and governments rarely agree on anything, even on vital matters of how to raise productivity. In democratic nations politics seem to be grid-locked – the agony of Brexit is a scary example. President Xi and Putin must shake their heads at the troubles of democracies.
We sincerely hope that 2019 brings better politics and far better policies. Enjoy the festive season, gentle readers. At least there is good cricket to watch.
Fiona Prior loved the film portrayal of the life of French novelist Colette, who titillated Parisian readers with the exploits of her bewitching heroines. More here.
Australia’s batters finally had a better day and a bit, to post a score above 300. Then took two quick Indian wickets but Captain Kohli on 82 and Ajinkya Rahane on 51 to show their great form. The Aussie bowlers are keen to hit India’s long tail.
Gradually the Aussie players are gaining confidence and to an extent are filling the gaping gap left by former leaders Smith and Warner. If these superb batters can be fitted into the new look Aussies without too much angst and anger, we shall have a great team again.
Image of the week - Kohli's catch