10 July 2020
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Ignore the media crap. Malcolm's economic vibes are good

Peter Switzer
6 September 2016

By Peter Switzer

It’s Labor Day in the US, so let me set you straight, in case you’re like the normal guy I met on the weekend who’s starting a baking business in the Blue Mountains. He made reference to how weak the economy is but he still wanted to have a go at making a successful business.

This is the impression he has got from the media, as this is his only contact with the economy outside of his new business and personal economy, which, to date, is doing very well.

I’d only just met the guy and he didn’t know of me and my work educating business owners and wealth-builders — that now has changed! Clearly, I put him straight on what’s going on in the Aussie economy and it’s a lot better than the media has portrayed it.

Now let me be kind with my media mates. They don’t set out to derail the economy, but because they can’t get a positive story on the front page, unless it’s sport or a gold medal, they know only bad news rates.

So the media-consuming public miss out on good news, such as what showed up yesterday. Let me put you in the loop:

  • Economy-wide, sales rose by 0.6% in the June quarter. Sales are up 3.5% over the year – the biggest annual gain in 7½ years. (Great news!)
  • Company operating profits rose by 6.9% in the June quarter to be broadly unchanged over the year. (Good solid news but not great, yet!)
  • Job advertisements rose by 1.8% in August to 4-year highs. Job ads are up 8% on a year ago. (That’s gotta be great news!)
  • New car sales were up 4.6% in August to create a record for the year of 1,178,348 new sales. (More great news!)
  • There was also some good inventory news that is expected to help push economic growth for the June quarter over 3% again. If we beat 3%, unemployment falls, and that has to be a good thing.
  • Today, the SMH reports a conversation between Andrew Bolt and Peta Credlin on Sky News, where they talk about the non-achievements of Malcolm Turnbull, one year after Tony Abbott lost his job (and so did Peta).
  • Peta and Andrew couldn’t come up with anything significant, but they clearly were focused on political matters. Economics-wise, growth has returned to over 3%, unemployment has fallen from 6.2% under Tony to 5.7% under Malcolm and interest rates are 0.5% cheaper for borrowers.

Meanwhile, business confidence, according to NAB, went from 1 to 4 but it has been as high as 6!

Over the same time, consumer confidence went from 93.9 (where pessimists outnumbered optimists) to 101 (where optimists were on top!).

And last week saw plans to invest by businesses for 2016-17 increase three quarters in a row, which has even surprised many economists.

Malcolm’s political wins have been few, but the economy has picked up under his leadership. Some of it came from the last Joe Hockey Budget but some of this economic improvement has been the confidence lifts from business and the consumer.

I regularly quote Bill Clinton but it’s relevant — “it’s the economy, stupid!”

Stick that in your oven and bake it.

P.S. The Reserve Bank is not expected to cut interest rates today. Our cash rate is one of the highest in the world and the reason is we are one of the best economies in the world. This is a message that all Australians should hear more regularly. 

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