Australia’s economy has been mired in a real GDP per capita recession for the past seven quarters. Low growth, high inflation, higher interest rates, and falling productivity have sent living standards backward for an all-time record period.
Therefore, the federal election due by May 17 will be primarily fought over which major party is best equipped to do something about the cost of living. The inflation that peaked at 7.8 per cent in Australia has eroded the value of pay packets. This explains public sector union demands for big wage rises to compensate government employees. The wage demands will add to the fiscal pressure on state government budgets already deep in debt and deficit.
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The Australian Financial Review’s succinct take on the principles at stake in major domestic and global stories – and what policy makers should do about them.
