Canion dot Blog

The “party” that is neoliberalism has been giving our society gift after gift.

We’ve had corruption and self-interest at the highest levels, as PwC executives had their snouts in the trough on both sides of the consulting equation, giving legislative design advice to government then flipping that information and advising their corporate customers on ways around said legislation.

We’ve had executive wages grow exponentially over recent years, irrespective of their performance, or that of the company they lead. (Hi, Alan Joyce of Qantas!) We see executives engaging more consultants and labour-hire at the expense of full-time wage earners.

We’ve had companies making extraordinary profits, helped by government supports such as JobKeeper (Harvey Norman excelled at this one.)

Yet workers have not benefited from the neoliberalism party. They’ve just had to buy the drinks then clean up the mess the next morning.

Workers have seen their share of the economic pie decrease over time. From ABC News in March 2019:

In the two years preceding 2019, Australian workers received the lowest share of total economic output since the 1950s - less than 47% of GDP. This is a decline of 11% since the 1970s. Corporate profits have increased 10% in that same time.

Wage stagnation—which is one of the design outcomes of the neoliberalist agenda—is another problem. The economy might have a high level of headline employment, but due to low levels of worker organisation (unionisation has been demonised for years) combined with individualised contracts and wages that are set for multiple years in advance, workers can’t leverage the high rates of employment to broker a better deal for themselves. The cards are stacked against them.

Today, we received another gift courtesy of the neoliberalism inherent in our economy. The Reserve Bank of Australia has determined that what our economy needs is yet another interest rate rise. Never mind that this generation of Australians are facing the highest home prices of all time, and that as a share of household income, mortgages are eating more than has historically been the case.

Canceling Netflix and not getting Uber Eats once a week is not going to make a dent in the additional mortgage repayments required of a household. Where is the extra money to be found? Surely we are nearing the point where the RBA is expecting people to find blood from a proverbial stone.

I predict a major economic calamity for Australia, and it’s not going to be pretty. My only hope is that it destroys whatever credibility neoliberalisms might have. At least then, something will have been gained from the misery.