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31/07/2018
Launching the South Australian results at CEDA’s mid-year economic review event in Adelaide, CEDA Chief Economist Jarrod Ball said, despite the dominance of narratives around economic growth driving prosperity, there is scepticism in the community around the benefits of economic growth.
CEDA polled around 3000 people with questions around who they thought had gained from Australia’s unbroken run of economic growth, what they thought are the most important issues at a personal and national levels as well as their attitudes to work.
Mr Ball said since the run of economic growth began in the September quarter of 1991, the Australian economy had doubled, and average household incomes have increased 70 per cent. The South Australian economy is now around three-quarters bigger.
Despite these impressive numbers, Mr Ball said just five per cent of Australians believed they had personally gained a lot from economic growth and South Australians shared this view.
Mr Ball said South Australians believed large companies had gained the most from economic growth and this was consistent with national results.
“The message around economic growth equalling prosperity is not cutting through and many people in the community are not connecting with economic growth,” Mr Ball said.
“This goes to the heart of what meaningful economic development is and how we get people engaged in long-term economic reform agendas.”
On a personal level South Australians put a strong focus on fundamental services including health and low-cost essential services, consistent with national results, Mr Ball said. In addition, South Australians prioritised affordable, high-quality mental health services and employment opportunities for young adults.
When it came to work, South Australians were more satisfied than the national average across most aspects of job satisfaction including job training and development (54 per cent compared to 50 per cent nationally).
South Australians were also more satisfied than the national average with all elements for work life balance except flexibility to work from home.
Ten per cent of South Australians are worried technology could replace them at work compared to 12 per cent nationally.
Mr Ball said the national and SA state-based results are a reminder that people are living in the here and now and their views are shaped by their personal circumstances.
“CEDA’s new report taps into what the community cares about, where we’ve connected and where there is a disconnect,” she said.
Ms Ranieri said the state’s public service employed one in eight South Australians, yet size alone will not garner the community’s trust. It was essential the sector attract and retain the best leaders.
“Most importantly for the public sector we must be in touch with what the community cares about and what’s important to South Australians,” she said.
She said, in line with CEDA’s Community pulse 2018 survey results, the SA public sector wants to drive job opportunities for young adults and provide workplace flexibility that allows more people to participate in the workforce.
“For government to have the political capital to implement the right policy settings, the community needs to have trust that benefits will be shared broadly,” she said.
“More and more a city or country’s economic and political agendas must connect with the community’s aspirations and interests.”
Ms Ranieri said she will use information from Community pulse 2018: the economic disconnect and a forthcoming whole of SA Government employee survey to help build a strong, confident, diverse and responsive public sector that can serve the community even better.
Updating CEDA’s audience on global economic forecasts made at the start of 2018, Mr Blythe said the global economy is still growing.
In Australia, he said, economic growth is running at three per cent, unemployment is trending downwards, and inflation is at the bottom end of the RBA’s two-to-three per cent target range.
Growth in the Australian economy is being driven by a big increase in LNG exports, infrastructure and rising Asian incomes fuelling a boom in local tourism and education, he said.
However, Mr Blythe said the prospects of a trade war pose some risk for the global economy. The origins of the trade war can be traced back to growing distrust of government and a rise in fear of immigration.
“What you get is a situation where global trust in government has declined pretty much everywhere,” he said.
“Against that, unexpected political outcomes such as the rise of populist leaders and parties and the Brexit vote and advent of President Trump can be seen as outcomes of this anti-establishment sentiment.”
To date the US has targeted Chinese steel with tariffs, probably because US steel workers are in states that supported Trump, Mr Blythe said.
Likewise, the Chinese may have targeted US soy beans as a retaliation because soy beans are grown in states that supported Trump and the Chinese may be picking a pain point for the US President.
“Targets for a trade war have been chosen very carefully it seems,” Mr Blythe said.
“It’s not a shooting war, it’s very selected targeting going on at the moment.
“If it is politics then I think the most likely outcome is you find a political solution to this and if that’s true the whole idea of a trade war is, I think, you keep it in the risk basket – this is something to watch, it is something to worry about – but we’re not yet at the point where you’re wanting to incorporate it into your central forecast for the next few years.”
He said a bigger risk is what happens to business consumer confidence in this environment and that’s the area economists will be watching most closely when thinking about risks to the global economy.
CEDA polled around 3000 people with questions around who they thought had gained from Australia’s unbroken run of economic growth, what they thought are the most important issues at a personal and national levels as well as their attitudes to work.
Mr Ball said since the run of economic growth began in the September quarter of 1991, the Australian economy had doubled, and average household incomes have increased 70 per cent. The South Australian economy is now around three-quarters bigger.
Despite these impressive numbers, Mr Ball said just five per cent of Australians believed they had personally gained a lot from economic growth and South Australians shared this view.
Mr Ball said South Australians believed large companies had gained the most from economic growth and this was consistent with national results.
“The message around economic growth equalling prosperity is not cutting through and many people in the community are not connecting with economic growth,” Mr Ball said.
“This goes to the heart of what meaningful economic development is and how we get people engaged in long-term economic reform agendas.”
On a personal level South Australians put a strong focus on fundamental services including health and low-cost essential services, consistent with national results, Mr Ball said. In addition, South Australians prioritised affordable, high-quality mental health services and employment opportunities for young adults.
When it came to work, South Australians were more satisfied than the national average across most aspects of job satisfaction including job training and development (54 per cent compared to 50 per cent nationally).
South Australians were also more satisfied than the national average with all elements for work life balance except flexibility to work from home.
Ten per cent of South Australians are worried technology could replace them at work compared to 12 per cent nationally.
Mr Ball said the national and SA state-based results are a reminder that people are living in the here and now and their views are shaped by their personal circumstances.
Much for the public sector to learn
Speaking at the event, SA Commissioner for Public Sector Employment, Erma Ranieri said there is much to be gained for the SA public sector in putting a lens on the findings from CEDA’s research.“CEDA’s new report taps into what the community cares about, where we’ve connected and where there is a disconnect,” she said.
Ms Ranieri said the state’s public service employed one in eight South Australians, yet size alone will not garner the community’s trust. It was essential the sector attract and retain the best leaders.
“Most importantly for the public sector we must be in touch with what the community cares about and what’s important to South Australians,” she said.
She said, in line with CEDA’s Community pulse 2018 survey results, the SA public sector wants to drive job opportunities for young adults and provide workplace flexibility that allows more people to participate in the workforce.
“For government to have the political capital to implement the right policy settings, the community needs to have trust that benefits will be shared broadly,” she said.
“More and more a city or country’s economic and political agendas must connect with the community’s aspirations and interests.”
Ms Ranieri said she will use information from Community pulse 2018: the economic disconnect and a forthcoming whole of SA Government employee survey to help build a strong, confident, diverse and responsive public sector that can serve the community even better.
Global economy strong, trade war poses some risk
A sense by middle income earners in advanced economies that they have not shared the benefits of economic prosperity in recent decades are being reflected in growing populism and the looming global trade war, according to Commonwealth Bank Chief Economist and Managing Director, Economics, Michael Blythe.Updating CEDA’s audience on global economic forecasts made at the start of 2018, Mr Blythe said the global economy is still growing.
In Australia, he said, economic growth is running at three per cent, unemployment is trending downwards, and inflation is at the bottom end of the RBA’s two-to-three per cent target range.
Growth in the Australian economy is being driven by a big increase in LNG exports, infrastructure and rising Asian incomes fuelling a boom in local tourism and education, he said.
However, Mr Blythe said the prospects of a trade war pose some risk for the global economy. The origins of the trade war can be traced back to growing distrust of government and a rise in fear of immigration.
“What you get is a situation where global trust in government has declined pretty much everywhere,” he said.
“Against that, unexpected political outcomes such as the rise of populist leaders and parties and the Brexit vote and advent of President Trump can be seen as outcomes of this anti-establishment sentiment.”
To date the US has targeted Chinese steel with tariffs, probably because US steel workers are in states that supported Trump, Mr Blythe said.
Likewise, the Chinese may have targeted US soy beans as a retaliation because soy beans are grown in states that supported Trump and the Chinese may be picking a pain point for the US President.
“Targets for a trade war have been chosen very carefully it seems,” Mr Blythe said.
“It’s not a shooting war, it’s very selected targeting going on at the moment.
“If it is politics then I think the most likely outcome is you find a political solution to this and if that’s true the whole idea of a trade war is, I think, you keep it in the risk basket – this is something to watch, it is something to worry about – but we’re not yet at the point where you’re wanting to incorporate it into your central forecast for the next few years.”
He said a bigger risk is what happens to business consumer confidence in this environment and that’s the area economists will be watching most closely when thinking about risks to the global economy.