It seems that a great deal has changed in the past twelve months. This time last year John Howard was Prime Minister, the share market was reaching new highs, and Australia was painted in the warm glow of prosperity. Only a few dared to point out that not all Australians were sharing in the benefits of that prosperity, and were being left behind to struggle while all around them were enjoying the good times. But they were there all along, while the Howard government ignored them and chose to chant the mantra of national security and economic management.
Twelve months later, and the new government of Kevin Rudd is talking about the struggles of working families, conducting inquiries into petrol and food prices, and promising to deliver a “Robin Hood” budget, taking from the rich to help the poor. The impact of the United States credit crunch is continuing to push Australian interest rates up, while the global price of oil is bleeding us all dry at the petrol pump. On top of that, grocery prices are also escalating at well above the rate of inflation.
The truth is that the sunshine did not just suddenly disappear. The problems we now confront have been brewing for quite a long time, with interest rate increases stretching back for the last five years. While it is true that some sectors of the economy are now reaching a kind of critical mass, with mortgage stress mounting, and retail sales plunging, the change of fortunes is not as abrupt as it might appear, nor as uniform. Indeed, some sectors of the economy are still powering ahead.
At the same time, it is not surprising that the Unisys Security Index has shown a dramatic increase in the numbers of people concerned about their financial wellbeing. All of a sudden, 5.2 million Australians are seriously worried about making ends meet. However, it’s not just economic conditions that have been shifting, but also the focus of attention. In other words, things didn’t just suddenly get worse, we’ve just suddenly noticed something which has been in the wind for some time.