Basing a childcare system on how much private profit it generates is a recipe for certain disaster

We knew in the 1980s, when neoliberal-influenced governments started selling off public trading enterprise for not much that the strategy would not deliver on its promises. At least some of us knew and wrote about it then. I was part of a team that analysed the disasters that would follow the sell off of the Commonwealth Bank and Qantas. Qantas, by the way, has gone through a sequence of high profile scandals, including selling tickets for flights it had already cancelled, illegally sacking workers during COVID, and other demonstrations of incompetent and capricious management. Just this week, it was fined $A90 million for the illegal sacking of the baggage handlers. The latest demonstration of how privatisation has failed is the revelation that the child care industry in Australia has become a honey pot for paedophiles and sociopaths as for-profit child care centres pursue profit at the expense of caring for the children in their centres. The solutions are always straightforward but rejected by governments – bring these activities back into the not-for-profit state sector. Meanwhile, the future of tens of thousands of children are being compromised by profiteering by corporations as governments wax lyrical about how much they care for the kids but do very little to stop the abuse.

Read more

Productivity growth is not the only source of increases in material well-being for the majority

One of the issues that emerges when one is studying undergraduate macroeconomics is that there is a curious disregard for the role that income and wealth distribution play in determining the aggregate outcomes, that are at the centre of the study. Most students in my cohort didn’t think about that and the curriculum certainly didn’t encourage such digressions. For me, a student of Marx basically, I was extremely interested in the topic and read a lot outside the standard curriculum, which took me into the work of Sidney Weintraub and others, for example, who demonstrated how aggregate spending was not just influenced by income but also how that income was distributed. I have been thinking about this issue in relation to the way the Australian debate at present is being dominated by the productivity question and the imperative for a degrowth strategy to emerge. This thinking is also in relation to the Federal government’s – Economic Reform Roundtable – which they are running in Canberra this week, led by the Treasurer. The overarching theme is ‘Making our economy more productive’ so we can grow faster. Exactly the opposite of a discussion about degrowth.

Read more

Australian labour market – slight improvement but uncertainty continues

The Australian Bureau of Statistics (ABS) released the latest labour force data today (August 14, 2025) – Labour Force, Australia – for July 2025, which reveals that last month’s gloom might not have been the start of a downward trend. The current data has blurred that outlook and the best we can say is that the future is uncertain. The virtuous three were evident this month: rising employment (particularly full-time), constant participation, and falling unemployment. Underemployment also fell 0.1 point as a result of the strong full-time employment result. It remains a fact that with 10.1 per cent of available labour not being used it is ludicrous to talk about Australia being close to full employment. There is substantial scope for more job creation given the slack that is present.

Read more

Australian workers get modest real wage gains in latest data – finally

Yesterday, the Reserve Bank of Australia finally lowered interest rates some months after it became clear the economy is slowing and the labour market is getting weaker. The RBA remain fixated on their claims that wages growth is too high. In yesterday’s – Statement by the Monetary Policy Board: Monetary Policy Decision ((August 12, 2025) – they claimed that the “labour market remains a little tight” and that “Measures of labour underutilisation nevertheless remain at low rates” – which must be them rehearsing for careers as comedians. Unemployment is rising quickly and the broad underutilisation rate was at 10.3 per cent. So for the RBA having 10.3 per cent of available labour not being used in one way or another is a ‘low rate’. Extraordinary. Anyway today (May 14, 2025), the Australian Bureau of Statistics released the latest – Wage Price Index, Australia – for the June-quarter 2025, which shows that the aggregate wage index rose by 3.4 per cent over the 12 months and is steady. The June-quarter 2025 nominal wage growth outpaced the standard inflationary measures. While most commentators will focus on the nominal wages growth relative to CPI movements, the more accurate estimate of the cost-of-living change is the Employee Selected Living Cost Index, which is still running well above the CPI change. Using that measure, purchasing power of the nominal wages grew modestly in the June-quarter after several quarters of zero or negative growth. However, there is no wages breakout evident. And while the RBA are fixated on low productivity, they fail to demand more investment from the business community which is the main reason for lagging productivity.

Read more

The so-called ‘land of the free’ is now a failed state and heading towards totalitarianism

Last Friday (August 1, 2025), the US Bureau of Labor Statistics published their latest – Employment Situation Summary – for July 2025. What followed was somewhat extraordinary. The data and the revisions to the previous two months data releases (which is standard practice) showed that the US labour market is in decline. It starkly runs counter to the official Trump narrative that the US is booming. While we don’t have enough evidence to really establish causality – it is likely (based on theoretical conjecture) that the highly volatile policy regime that Trump runs and his tariff flip flops is undermining the confidence in the economy. We need a few more months of data yet before we can be sure. But the BLS results certainly support the view that Trump’s economic policies are not working to advantage the American public. The extraordinary thing was that Trump then sacked the BLS head and signalled a further descent towards totalitarianism.

Read more

Major shifts in sentiment within Japan as they try to escape the cost-cutting excess profits mindset

This week (July 29, 2025), the Cabinet Office in Tokyo released the Economic and Fiscal Report – 年次経済財政報告 – which is a comprehensive statement of where the Economic and Fiscal Policy Ministry thinks the Japanese economy is going and the challenges it faces. It is a long and very thorough document. But like many official documents that the Japanese government publishes, it reads quite unlike what other governments that are sort of in IMF-spin mode pump out. The fundamental takeaway from reading the Report is that the Japanese government is still uncertain about whether the country has evolved out of its deflationary mindset and become a ‘growth-oriented’ nation driven by real wages growth. There is certainly criticism (implied in the Japanese fashion) for corporations sitting on large cash assets who are underinvesting in local productive capital. But the overwhelming hope of the government is that the nascent wage increases that have been offered mostly by the large major corporations continue and spread throughout the economy into the dominant small and medium enterprises. Most governments are still in the corporate cost-cutting mindset – thinking that is somehow how productivity and improved material well-being will occur. So their foci is on deregulation and attacking trade unions and that sort of ‘supply side’ nonsense. The Japanese government is firmly banking on a consumer-led, domestic economy growth strategy fostered by extensive wage rises outstripping the growth in prices.

Read more

The Smith Family MMT Manga – Episode 2 for Season 3 is now available

Season 3 of the – The Smith Family and their Adventures with Money – produced by MMTed continues today (July 24, 2025). Ryan lost his job in the recession and went to pieces, drinking too much and gambling the family funds away. Elizabeth kicked him out and now, with a new mission, he has asked Elizabeth for another chance. His unemployment forced him to shift his world view and reject the austerity logic of Professor Raul Noitawl, who he had previously considered infallible. Meanwhile, banker Chris is now working a the chief policy advisor to the Opposition in the lead up to the national election and he assembles at Elizabeth’s house to discuss the Job Guarantee with Kevin and his friends. They have a lot to learn.

Read more

Britain’s Leeds Reforms – jumping the shark comes to mind

Last week (July 15, 2025), the British Chancellor delivered the – Rachel Reeves Mansion House 2025 speech – which is an annual event where the Chancellor outlines the state of the economy and what the government is doing. Mansion House, London – is the official residence of London’s Lord Mayor and is located in the heart of the City (financial district). If you want to see an echo chamber in action then this is one place where you will find one. All the self-important characters from the financial markets being duchessed by a sycophantic chancellor all in the one place. Perfection. Reeves was there to tell the ‘markets’ what they had longed for over the last 15 years – that the so-called – Leeds Reforms – would see the regulatory and supervisory framework that was erected after the GFC largely abandoned and that they could get back to relatively unfettered ‘greed is good’ operations again. Perfection. Apparently, the Chancellor has been convinced by the speculators that they hold the interests of the British working class at the centre of their hearts and that they will do everything in their power to advance those interests through their own operations. And, ladies and gentlemen – pigs might fly.

Read more

Australian labour market – evidence is mounting of policy sabotage driving the unemployment rate up

The Australian Bureau of Statistics (ABS) released the latest labour force data today (July 17, 2025) – Labour Force, Australia – for June 2025, which reveals that finally, the slack that the combination of the fiscal austerity and the high interest rates has created is feeding into the labour market as employment growth slows and the unemployment rate rises (by 0.2 points) to 4.3 per cent. The array of indicators now suggest that there is a systematic slowdown occurring in the labour market. Unemployment has now risen by 59.5 thousand or 0.4 points over the last 6 months as the fiscal position remains tight and the central bank holds interest rates at elevated levels. This is unnecessary policy sabotage – inflation began declining in December 2022 and is now at relatively stable and low levels – there is no reason for the government to be running contractionary policy stance. Underemployment also rose 0.1 point. The broad labour underutilisation rate (sum of unemployment and underemployment) rose to 10.3 per cent (up 0.3 points). It remains a fact that with 10.3 per cent of available labour not being used it is ludicrous to talk about Australia being close to full employment. There is substantial scope for more job creation given the slack that is present.

Read more

How to break out of the commodification of everything

Regular readers will know that I run a bit, like lots. Last week, while I was in Europe, I decided to stay on Australian time, given the brevity of the mission, so I found myself running at midnight or just after awaking at 22:00 or 23:00 (after going to sleep around 14:00). It turned out to be a good strategy because the abnormally (scary) high temperatures during the day last week in Europe gave way to warm nights with just a hint of crispness in the air – perfect running conditions. Yesterday morning, though, I was in Melbourne, Australia and set off on my early run (around 7:00 being Sunday) and I was a bit tired from yesterday’s Parkrun in Newcastle. Yes, I move around a bit. This morning though, I saw more than the usual numbers out and about on the familiar running areas in the park lands of Melbourne and soon came across Run Melbourne, a large event with screaming speakers, ridiculous geeing-up announcers on microphones, and thousands of people blocking the usual serene early morning paths along the Yarra River. I had earlier been re-reading Chapter 13 of Harry Braverman’s colossal book from 1974 (which everyone should read) – Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century – which was published by Monthly Review Press. The words of – Harry Braverman – came back to me as I tried to work out a way around yesterday morning’s mayhem down by the river.

Read more

British Labour Government should ignore irrelevant fiscal ‘black holes’ and worry about the political hole it is digging for itself

The lack of correspondence arises when a government tries to operate within the tight constraints of unjustifiable fiscal rules by proposing legislation that cuts billions in government support for programs that are the difference between abject poverty for millions and a modest standard of living is once again coming to the fore in Britain. The Labour government is obsessed with achieving fiscal rules that are not only arbitrary but cannot be precisely assessed given the deficiencies in the available data and the forecasting techniques. However, the Chancellor tries to convince everybody that there is precision and that major austerity has to be imposed to fit the government fiscal outcomes within the arbitrary constraints they have imposed. Those constraints do not have any context in the things that matter – reducing disadvantage, dealing with inequality, climate change, health care etc. Yet the constant reference to a ‘black hole’ – the difference between the estimated fiscal trajectory and the fiscal rules constraint leads the government to ill-considered policy hacks aimed at keeping the outcomes within the rules. The visceral reaction against the hacks then leads to the situation we have seen in Britain recently, which further undermines the political viability of the government. The only hole that the government should be worried about is the political hole it is digging for itself as a result of its obsession with imprecisely measured and essentially irrelevant ‘black holes’.

Read more

Australia – the inflation spike was transitory but central bankers hiked rates with only partial information

The Australian Bureau of Statistics (ABS) released the latest CPI data yesterday (June 26, 2025) – Monthly Consumer Price Index Indicator – for May 2025, which showed that the annual underlying inflation rate, which excludes volatile items continues to fall – from 2.4 per cent to 2.1 per cent. The trimmed mean rate (which the RBA monitors as part of the monetary policy deliberations) fell from 2.8 per cent to 2.4 per cent. All the measures that the ABS publish (including or excluding volatile items) are now well within the ABS’s inflation targetting range which is currently 2 to 3 per cent. What is now clear is that this inflationary episode was a transitory phenomenon and did not justify the heavy-handed way the central banks responded to it. On June 8, 2021, the UK Guardian published an Op Ed I wrote about inflation – Price rises should be short-lived – so let’s not resurrect inflation as a bogeyman. In that article, and in several other forums since – written, TV, radio, presentations at events – I articulated the narrative that the inflationary pressures were transitory and would abate without the need for interest rate increases or cut backs in net government spending. In the subsequent months, I received a lot of flack from fellow economists and those out in the Twitter-verse etc who sent me quotes from the likes of Larry Summers and other prominent main stream economists who claimed that interest rates would have to rise and government net spending cut to push up unemployment towards some conception they had of the NAIRU, where inflation would stabilise. I was also told that the emergence of the inflationary pressures signalled the death knell for Modern Monetary Theory (MMT) – the critics apparently had some idea that the pressures were caused by excessive government spending and slack monetary settings which demonstrated in their mind that this was proof that MMT policies were dangerous. The evidence is that this episode was nothing like the 1970s inflation.

Read more

Australian Labour Market – steady but signs of a deterioration

The Australian Bureau of Statistics (ABS) released the latest labour force data today (June 19, 2025) – Labour Force, Australia – for May 2025, which revealed that the unemployment rate remained unchanged at 4.1 per cent for the second consecutive month. There was a small decrease in overall employment (-2,500) which was offset by a 0.1 point decline in the participation rate, The net effect was a small decline in official unemployment (-2,600) and a stable unemployment rate. Whether the fall in employment and participation is a signal of a significant slowdown in the coming months is unclear at this stage. Monthly data fluctuates up and down. There was a 1.3 per cent rise in monthly hours worked and significant growth in full-time employment which blurs an easy interpretation of the other changes. Underemployment also fell 0.1 point growth. The broad labour underutilisation rate (sum of unemployment and underemployment) fell to 10 per cent (down 0.1 point) on the back of the declining underemployment. It remains a fact that with 10 per cent of available labour not being used it is ludicrous to talk about Australia being close to full employment. There is substantial scope for more job creation given the slack that is present.

Read more

The arms race again – Part 1

The Chair of the Finance Committee in the Irish Parliament invited me to make a submission to inform a – Scrutiny process of EU legislative proposals – specifically to discuss proposals put forward by the European Council to increase spending on defence. This blog post and the next (tomorrow) will form the basis of my submission which will go to the Joint Committee on Finance, Public Expenditure, Public Service Reform and Digitalisation on Friday. The matter has relevance for all countries at the moment, given the increased appetite for ramping up military spending. Some have termed this a shift back to what has been called – Military Keynesianism – where governments respond to various perceived and perhaps imaginary new security threats by increasing defence spending. However, I caution against using that term in this context. During the immediate Post World War 2 period with the almost immediate onset of the – Cold War – nations used military spending as a growth strategy and the term military Keynesianism might have been apposite. These nation-building times also saw an expansion of the public sector, which supported expanding welfare states and an array of protections for workers (occupational safety, holiday and sick pay, etc). However, in the current neoliberal era, the increased appetite for extra military spending is being cast as a trade-off, where cuts to social and environmental protection spending and overseas aid are seen as the way to create fiscal space to allow the defence plans to be fulfilled. That trade-off is even more apparent in the context of the European Union, given that the vast majority of Member States no longer have their own currency and the funds available at the EU-level are limited. We will discuss that issue and more in this two-part series.

Read more

Australia’s lowest paid workers get some real wage relief from the latest adjustment to the minimum wage

On June 3, 2025 Australia’s minimum wage setting authority – the Fair Work Commission (FWC) issued their decision in the – Annual Wage Review 2025 – which provides for wage increases for the lowest-paid workers – around 0.7 per cent of employees (around 88 thousand) in Australia. In turn, around 20.7 per cent of all employees, who are on the lowest tier of their pay award (grade) receive a flow-on effect. The FWC provided a 3.5 per cent nominal wage increase for the lowest paid workers in its 2025 National Wage Case decision. Against the current CPI growth, that provides for some modest real wage increase for this cohort. However, note the discussion above as to the best purchasing power measure to use. Against the more applicable Employee Selected Cost of Living Index (SCLI), the decision provides for barely any real wages growth and fails to redress the massive real wage cuts in recent years. The media has failed to pick up on that reality, and has instead given oxygen to the employers’ responses which called the decision irresponsible while at the same time pocketing record profits as a result of their profit gouging. But at least the lowest-paid workers gained some relief as a result of the decision as the FWC largely ignored the whining of the employers.

Read more

The neoliberal destruction of Australia’s higher education system

Today, I am fully engaged in work commitments and so we have a guest blogger in the guise of Dr Scott Baum, who will soon be joining us at the Centre of Full Employment and Equity (CofFEE) at the University of Newcastle as a senior research fellow. Scott has been one of my regular research colleagues over a long period of time and we currently hold ARC grant funding together to explore regional disparities as a result of the COVID-19 pandemic. Scott indicated that he would like to contribute occasionally and that provides some diversity of voice although the focus remains on advancing our understanding of Modern Monetary Theory (MMT) and its applications. Today he provides analysis of how lost the Australian tertiary education system has become in this neoliberal period. While focused on the Australian situation, the analysis unfortunately has relevance to higher education systems in most countries.

Read more

The Webbs knew more than a century ago that if you pay high wages you get high productivity

During the recent inflationary episode, the RBA relentlessly pursued the argument that they had to keep hiking interest rates, and then, had to keep them at elevated levels, well beyond any reasonable assessment of the situation, because wage pressures were set to explode. They claimed their business liaison panel was telling them that wages were becoming a problem despite the facts being that nominal wages growth was at record lows and real wages (the purchasing power of the nominal wages) were going backwards at a rate of knots. The RBA massaged that argument by adding that productivity was low and that there was no ‘non-inflationary’ space for wage increases as a result, as if it was the workers’ fault. Yesterday (May 28, 2025), the Productivity Commission (a federal agency that morphed out of the old – Tariff Board – published an interesting research report – Productivity before and after COVID-19 – which lays bare some of the misinformation that the corporate sector has been pumping into the public debate about productivity growth. In particular, it demonstrates that forcing workers to work longer hours undermines productivity growth, that work-from-home is beneficial, and the lack of investment in productive infrastructure by corporations is a major reason for the lagging productivity growth in Australia.

Read more

A Just Transition framework is required to head off the climate denying Right

The recent federal election in Australia saw the conservative opposition coalition lose further seats in parliament building on their disastrous 2022 result. The coalition is made up of conservative urban types (the so-called Liberal Party) and the National party, which represents the rural lobby. The Nationals are essentially climate-change denialists and because the Liberals require them to have any hope to govern, the smaller rural lobby can dominate policy choices. To convince the Nationals to adopt a net-zero by 2050 stance, the Liberals had to agree to propose a shift to Nuclear power, which was neither realistic in a logistical sense or economic in a cost sense. The electorate clearly rejected that option at the recent election. Now the Liberals, who are facing an existential crisis after the devastating loss, has to make a choice – stick with the Nationals and jettison net zero or break the Coalition and pitch a climate policy that will be acceptable to voters. The problem is that neither option will deliver them electoral success. Progressives are enjoying some rare schadenfreude over this conservative dilemma. It seems that the British Labour Party has got itself into a similar dilemma, with pressure from the Right-wing Reform Party to water down its climate policy. But what is more interesting in the UK setting is the role played by Labour’s former Prime Minister, who is also now attacking ‘green’ stances. I predict that will not end well for Starmer and Co. Fortunately, the Australian Labor party, which is also in government is sticking to a more ambitious climate agenda, although, even then, it is not ambitious enough. However, governments that are pursuing a net zero agenda must provide security for communities and regions that will bear the brunt of the policies introduced. The resistance to change that political forces such as Reform UK exploit can be easily offset if governments accompany their net zero agenda with a Just Transition framework. However, there is an absence of policy development in that area.

Read more

Australian labour force data – employment growth absorbs rising participation without increasing the unemployment rate

Last month’s labour force data for Australia revealed a sluggish labour market, seemingly on the cusp of contraction as other indicators were pointing in that direction. The Australian Bureau of Statistics (ABS) released the latest labour force data today (May 15, 2025) – Labour Force, Australia – for April 2025, which revealed that employment growth was strong enough to absorb a 0.3 point rise in participation without increasing the unemployment rate. The broad labour underutilisation rate (sum of unemployment and underemployment) did, however, rise 0.2 points to 10.1 per cent on the back of a rise in underemployment. The fact that 10.1 per cent of available labour are not being used indicates that folly of those who claim Australia is close to full employment. There is substantial scope for more job creation given the slack that is present.

Read more

Australian wages growth – real wages stable – no breakout evident

Throughout the recent period of higher than usual inflation, the Reserve Bank of Australia kept telling us that they had to keep hiking rates (even though the inflation trajectory was downward) because they were predicting a wages explosion. Who told them about that? Their so-called business liaison meetings. The business sector is always claiming that a crippling wages breakout is about to happen because they want policy makers to suppress employment growth to give them the upper hand in wage negotiations. Anyway, no such wages explosion occurred. And the latest data shows that things haven’t changed. Today (May 14, 2025), the Australian Bureau of Statistics released the latest – Wage Price Index, Australia – for the March-uarter 2025, which shows that the aggregate wage index rose by 3.4 per cent over the 12 months (up 0.2 points on the last quarter). While most commentators will focus on the nominal wages growth relative to CPI movements, the more accurate estimate of the cost-of-living change is the Employee Selected Living Cost Index, which is still running well above the CPI change. Using that measure, purchasing power of the nominal wages was stable in the March-quarter. There is no wages breakout happening.

Read more
Back To Top