Phil Ruthven considers a number of myths that continue to dominate when discussing the future growth of Australia’s economy.
Debunking urban legends
Facts usually ruin good stories, as we know. But gossip, rumours, scandals and old wives’ tales can be very real in the telling; and we tend to believe a lot of them until debunked. After all, they are interesting, entertaining, comforting and believable.
But in governing a nation and leading a business it is safer to make evidence-based decisions. Which means that a number of urban myths should be given their long overdue burial.
Crime is on the rise, especially murders.
No it isn’t, and the murder rate in Australia is not only one of the world’s lowest at under two per 100,000 each year, but has fallen to record lows.
Speed on the road is the number one killer.
No, things like distractions, falling asleep and intoxication are. Speed is usually somewhere in the second to fourth category.
We need a big population to compete in a globalising world.
No we don’t. Some 18 of the 20 countries with the highest standard of living in the world have a population less than Australia’s 24 million, and most of them are less than a third of our population. The only populous countries in the top 20 are the US and Germany.
Immigrants take our jobs.
No they don’t, they more often take jobs we don’t like. And if a migrant family arrives, they create a demand for more jobs than they can fill for at least five years in terms of the needed infrastructure and annual consumption expenditure.
Australia will run out of workers due to ageing.
No we won’t. Being too young a population, as we were in the 19th century, was a bigger problem; to get enough workers to support the population we needed children to start work at under 15 years of age, and often as young as 11–13 years old. As this century unfolds, working beyond 65 and up to 75 years of age or more – often on a part-time or casual basis – is realistic for a workforce where it is the brain we are using, not brawn. And the only way to wear the brain out is to stop using it.
There won’t be enough jobs due to technology, robots and artificial intelligence.
Yes, there will. We are good at creating jobs. Over the past five years we have created eight times more jobs than we have lost. Yes, eight times. There are millions of jobs in the making to replace those lost through technology and digital disruption, to be added to our current 12 million jobs.
We are now working harder than ever before.
Not true. For males in the year 1800, it used to be a 65 hour week for 25 years, starting at 13 years of age to complete 80,000 hours of paid work, then you died at an average age of 38. Now it is still 80,000 hours in a lifetime, but less than half those hours are now worked per week over a longer period of time (50+ years). It is also worth remembering that we now have two months off each year in the form of vacation, public holidays and sick leave. We have more discretionary and leisure time than at any time in history.
We need to make material things to create basic wealth.
No we don’t. A wealth creating industry is one which is producing products that customers and the market want and are prepared to pay for – whether those products be goods or services. Agriculture, mining, manufacturing and construction are all service industries anyway.
Humans didn’t create the raw materials on which they are based, nature did and they are free. No one has ever been game to take the credit for creating our natural resources, least of all economists or our Bureau of Statistics. The term “goods industry” is an historical construct to separate tangible from intangible products. The economy and its wealth are built on value-adding, so wealth creation has only ever been the result of labour, depreciation of capital, indirect taxes and profit going into a product.
Agriculture these days creates just 2 per cent of our gross domestic product (GDP), and manufacturing less than 6 per cent. In 1960, these two industries accounted for 38 per cent. Yet we have a standard of living nearly three times higher than at the end of the industrial age in the mid-1960s. If anything, it is our “service” industries propping up some of the “goods” industries in this new century.
We are too-highly taxed.
No we aren’t, at 28 per cent of GDP we are one of the lowest taxed nations among the developed countries, the average being around 37 per cent and many nations nudging 50 per cent of GDP.
This is blatant scare-mongering and politicking, and one of the most pernicious lies being trundled out by both sides of politics in Australia.
We need to cut costs to balance the budget.
Yes, let’s regress back to the days when there was no, or inadequate, support for single mums; the unemployed; the aged; the disabled; or other disadvantaged citizens. Let’s not stop till we get back to the “good old days” when taxes were much lower. I don’t think so.
Admittedly, we should get better value for our taxes than we do. One fifth of our GDP is produced by government and that sector’s productivity has been negative for decades.
The rich are getting richer and the poor getting poorer.
No they are not; there has been hardly any change since the beginning of our new century here in Australia.
Housing is now dangerously unaffordable.
It always was unaffordable for the newly marrieds and the poor, so what’s new? Interestingly, the debt-servicing ratio (interest payments as a share of disposable income) for mortgage and other debt is currently as low as it has ever been in four decades.
Nuclear is the most dangerous energy ever used.
Wood probably killed more people per kilowatt of energy produced (getting the wood, chopping it, asphyxiation, fire). Nuclear almost certainly has been the safest on the basis of deaths per kilowatt of energy.
Australia could become the food bowl of Asia.
If only, but we don’t have enough water. That said, we will probably increase our output this century by fivefold as we did in the 20th century, but that will only feed 5 per cent of the Asian population at the end of the 21st century.
But despite these urban myths, are things really getting better?
You bet. Just look at our progress in the chart. And the best is yet to come.
Already a member?
Login to view this content