Recession whacks Victorian working people

Vanguard April 2013
Bill F.

Another backdrop to the Baillieu shafting was the release of Bureau of Statistics data which shows that the state of Victoria had moved into recession in the second half of 2012.

In brief, general spending fell by 1.1%, investment by 5%, retail sales by 0.8% and 11,000 jobs were lost.

Household spending on furniture and appliances dipped by 6% over three quarters, spending on gas and electricity slumped by 2-3% in spite of price hikes by the privatised utility companies, and restaurant, hotel and café spending has fallen by 5%.

Before the global economic crisis of 2008, there was a steady 4% growth in household spending in Victoria, but last year the growth was only 1.3%, less than the population growth rate, and still falling.

 Hard times

The only sales growth recorded was for new cars (cheaper imports?) and mobile phones, and the latest electronic gadgets that all kids (and others) have to have.

Behind these statistics is the grim reality of Victorian working people doing it tough. They are cutting back heavily on so-called ‘discretionary spending’; making do with clapped out appliances and tattered furniture, missing out on films and entertainment and meals in restaurants, putting off trips and holidays, and spending less on new clothes.

This is because the money is needed for the basic things such as rent/mortgage, council rates, food, healthcare, education, and transport costs for work, all of which continue to cost more every year.

Those already unemployed (5.2% in Victoria) and those in the manufacturing, hospitality and retail sectors in shaky jobs or on short hours, temporary or casual work, are the first to feel the pinch.

The slump in investment is also starting to alarm the local capitalist class. They see investment capital by-passing Victoria and being sucked into mining and speculation. While they don’t give a hoot for the struggles of working people, they do want paying customers for their products and services. Employer groups are now calling for some easing of the ‘balanced budget’ mantra and a little Keynesian pump-priming by the state government!