I’ve been consistently critical of the Labor party since Anthony Albanese became leader after Labor’s narrow but unexpected loss in 2019. It’s always easy to fall prey to confirmation bias in this kind of thing, making much of the bad and ignoring the good. To check my beliefs, I’m taking a widely circulated list of Labor’s claimed achievements, and giving my own responses. This is by no means a complete list of the governments achievements, and of course it doesn’t mention failures, but I’m confining myself to the list for now. Readers can judge whether I’m being fair.

Claims are in bold, my responses in italic

*Establishing National anti-corruption Commission

No significant prosecutions yet, decision not to pursue robodebt

*Cheaper child care

Genuine, but partially eroded by fee increases 

*Pay rise for aged care workers

A special case, amid real wage reductions for most workers

*Tripling the bulk billing incentive

Not sufficient to prevent a decline in bulk billing

*Single parent payment extended to age 14 (57,000 single carers will receive an extra $176.90 p/n)

Good. Reversal of change made by Howard and accelerated under Gillard

*$500 electricity rebate for all concession card holders

A once-off handout

*Savings on PBS subsidised meds

$12.50 per script Small but worthwhile

*60 Day dispensing halving the cost of medications

Overstated, but still worthwhile 

*Paid domestic violence carers leave

 Up to 10 days, small but worthwhile 

*Increase to Jobseeker and Rent Assistance (biggest increase to rent assistance in three decades)

Jobseeker increase of $20 above indexation (Morrison gave $50 increase). Still way below poverty line.  Rent assistance just kept pace with rising rents

*Cybersecurity developments

No idea what this is

*The Housing Australia Future Fund

A half-baked idea, still to produce any actual houses. Greens pressure drove much stronger action.

*Robodebt Royal Commission

No consequences for those responsible, no systemic reforms 

*180,000 fee free TAFE places

Good. Probably the most significant expenditure initiative of this government

*NDIS sustainability

These are cuts. Arguably necessary but misleadingly described 

*Largest increase ever for cancer nurses

Small but worthwhile

*Review into Australia’s visa system

If there is one thing this government does, it’s review

*Reopening trade to China

Overstated – China’s sanctions were largely symbolic and never affected our major export, iron ore

* Triple incentives for GPs

Repeated from above – not enough to stop decline in bulk billing

*58 Urgent Care Clinics

Worthwhile but small, and far too little to fix problems in emergency wards

* Fairer conditions for workers

Working conditions one of the positives for this government, but real wages have fallen

* Fixing a one-sided tax change

More hide than Jessie the Elephant. The one-sided tax change was their own election commitment, matching the LNP. Even after the fix, most middle income earners paid higher taxes than when the government was elected because of the scrapping of LMITO

* Two Surpluses (Two more than the LNP)

Who cares

* Aged care reforms

Marginal tweaks

* Halving of the inflation rate since coming into office.

If Labor wants credit for this, should be blamed for increase in unemployment rate and reduction in real wages

Like most academics these days, I spend a lot of time filling in online forms. Mostly, this is just an annoyance but occasionally I get something out of it. A recent survey in which the higher-ups tried to get an idea of how the workforce was feeling, asked the question “Do you think of the University as We or They?”.

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In today’s AFR. It’s paywalled and I don’t have access (I’ve been promised a PDF) so here’s what I submitted, which may not be final.

Six months ago, Federal Treasurer Jim Chalmers was planning legislation to remove his own power (never used, but always available until now) to over-ride decisions of the Reserve Bank. Now, he has not only decided to retain this power, but has openly criticised the Bank’s interest rate decisions as “smashing the economy”.

It’s easy enough to understand Chalmer’s criticism in terms of the political interests of a government seeking to survive and retain power. The government is focused, to the point of obsession, on the “cost of living”, a nebulous term that can best be interpreted as “the reduced purchasing power of household disposable income”. 

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This study showing that US academic faculty members are 25 times more likely than Americans in general to have a parent with a PhD or Masters degree has attracted a lot of attention, and comments suggesting that this is unusual and unsatisfactory. But is it? For various reasons, I’ve interacted quite a bit with farmers, and most of them come from farm families. And historically it was very much the norm for men to follow their fathers’ trade and for women to follow their mothers in working at home.

So, I decided to look for some statistical evidence. I used Kagi’s AI Search, which, unlike lots of AI products is very useful, producing a report with links to (usually reliable) sources. That took me to a report by the Richmond Federal Reserve which had a table from a paper about political dynasties.

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The latest massive $1.1bn profit reported by Coles will doubtless produce a new round of hand-wringing about the “cost of living”. Governments will produce initiatives aimed at capping or reducing prices. Pundits will use a variety of measures to argue as to whether such measures are inflationary. Then there will be debates about whether splitting up Coles and Woolworths into smaller chains would enhance competition. And the Reserve Bank will be encouraged to push even harder to return inflation to its target range.

But these responses, focused on the cost of goods, miss the point. Coles and Woolworths have increased their margins, yes – but prices for groceries have increased broadly in line with other goods. The real driver of supermarket profits is their ability to drive down the prices they pay to suppliers.

But the input that matters here is labour and it is here that the supermarkets are making big gains at the expense of their workers. Across the board, wages have failed to keep pace with prices over the last five years or more.

At least for the supermarkets, this won’t change any time soon.

In its annual wage review in June, the Fair Work Commission announced a 3.75% increase to the minimum wage and minimum award wages. But the increase barely offsets the almost identical 3.8% increase in consumer prices since the last review, leaving real wages unchanged.

Yet again, the FWC declined to do anything about the fall in real wages that has taken place since the arrival of the pandemic, compounding a long period of stagnation before that. As it noted: “Despite the increase of 5.75 per cent to modern award minimum wage rates in the AWR 2023 decision, the position remains that real wages for modern award-reliant employees are lower than they were five years ago.”

Real WPI growth by method of setting pay – 1, 3 and 5 years. Photograph: FairWork Commission

There is no cost of living crisis for those whose income derives from profits. Those at the top end of town have seen their incomes soar. But even more modestly wealthy recipients of capital income are doing well, a fact reflected in their spending patterns.

This divergence is almost invariably framed using lazy generational cliches, comparing the expenditure of older and younger generations.

To be sure, old people, such as self-funded retirees, are more likely to be receiving capital income and less likely to be reliant on wages to pay mortgage interest. But this is by no means universal. Plenty of baby boomers are still in the workforce, while some of our most prominent property owners (such as Tim “avocado toast” Gurner) are much younger. Focusing on age merely confuses a debate that is already complicated enough.

The policies of the Reserve Bank make matters even more thorny. The problems here start with a dogmatic adherence to a 2% to 3% inflation target. The rationale for inflation targeting is thin, and the choice of target range is entirely arbitrary, arising from an ad hoc decision by a right-wing New Zealand finance minister in the early 1990s, one which was followed by a long period of economic decline in that country.

The dangers of using high interest rates to achieve rapid reductions in inflation, evident from the “credit squeezes” of the 1970s and 1980s, are now becoming apparent, as the drive to reduce inflation is reflected in a push to squeeze demand and prevent any recovery in real wages.

There is little hope that all of this will change any time soon. The concept of “cost of living” is simple and intuitive, even if it is highly misleading. What really matters is the purchasing power of people’s disposable incomes. But that’s a bit too hard for our political class to think about, let alone explain to the public.

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