Recovery a statistical mirage

Rumours that the Australian economy is in a dire stupor appear to have been exaggerated. At least according to a bevy of recent economic indicators. The Australian Bureau of Statistics assures us that the economy is growing at 4.3 per cent and unemployment remains contained at a world-beating 5 per cent. PwC has joined the party by reporting that productivity has grown by 2.8 per cent over the past year.

Not unexpectedly, this run of positive economic data has been embraced by federal Treasurer Wayne Swan. “What a great day for Australia,” gushed Swan of the growth data. “What a stunning set of figures.” Only modesty prevented him from adding: “See, I really am the World’s Greatest Treasurer.”

Frankly, this good news can only be a figment of the two-speed economy. To believe these statistical assurances of prosperity ignores the almost daily announcements of companies shedding jobs by the hundreds and thousands. It mocks the many businesses that have collapsed and the many more just hanging on. These la-la economic indicators dismiss the life and death struggles of industries threatened by radical structural change – such as retail, manufacturing and media – and plunging business and consumer confidence.

The government’s complacency is cause for alarm because everybody in the real world knows that this is the time for public policy resolve. But a government basking in its own self-congratulation is unlikely to grasp the economic reform nettle. There was little in the government’s lacklustre economic forum last week to suggest that Australia is about to enter a period of vital reform in such areas as productivity, infrastructure, business regulation and taxation.

Hollow political rhetoric about the economy, coupled with the instability of minority government, promises more policy inaction. And there’s no use looking to the opposition for policy resolve: it’s simply waiting for the next election to claim its prize. The answers will not be found in the policy and leadership wasteland of Canberra. The challenge to improve productivity and revitalise competitiveness must be met at the enterprise level. It will take innovation, vision, courage and a resolve to re-engage with alienated workforces. For corporate leaders whose only response to change has been to keep cutting costs and hope for the best, their time, like the Gillard government’s, is coming to an end.

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