The Labor leader, Anthony Albanese, was caught not remembering the current unemployment figures and overnight bank rate, and copping a lot of flak afterwards. But are those figures really important?
A lot of focus is paid to these two figures as they are supposed to be significant indicators of the health of the Australian economy. But, while many may give them that status, those numbers don't actually have any real significant meaning as far as economic health goes, and that is because almost everybody has no idea of what those are actually measuring.
Unemployment levels are an important measure of the health of a nation because it indicates how many are being supported by the government, so keeping those figures low supposedly indicates that a government is managing the economy well and people are prospering. Well, that would be good, but the unemployment figure that Australia uses only includes those that don't work at least one hour per week. That means that there are many living well below the poverty line that don't show up in that statistic. That is misleading and indicates that we really don't know how bad unemployment really is.
The great depression brought an unemployment rate of up to 32% to Australia with a lot of economic and political instability. Whether that unemployment rate was measured in the same way as it has been for the last two decades at least, that figure showed how devastating the economy had become for many people. It has cast a giant shadow across politics and economic management around the world since then. Having an artificially low unemployment rates thus serves the credentials of both parties.
Of course, the most meaningful figure would be how many are living below the poverty line, which would indicate how severely masses of people were living despite impressive-looking GDP and stock market figures. It would also indicate how many were underemployed, especially for those gig workers on low effective wages still struggling despite working two or more jobs. The myth is more appealing to politicians, so only once have I heard a politician mention the one hour limit, and never again, as if the mere utterance of it blows the whole charade up in a puff of smoke.
The overnight bank rate is often used as a means of trying to keep bank mortgage rates in line, despite the two being used for two quite different scenarios and significantly different timeframes. The overnight bank cash rate is the interest rate on unsecured overnight loans between banks, according to the Reserve Bank of Australia (RBA) and is only occasionally used. Why it is compared to the borrowing rate for 25 year home loans is a mystery, but when the RBA drops the cash rate, there are calls from all sorts of people and organisations for the bank to lower their home loan interest rates.
That is quite a disconnect in application, scope and timeframe, yet is an oft-quoted measure of national economic health that is becoming increasingly irrelevant to the ever-increasing number of Australians who cannot afford to buy homes. Unfortunately, the misappropriate use of this figure is something that the RBA should have disillusioned us all of decades ago, and given us a figure that really is relevant to mortgage rates in more than just sharing a word!
Both these numbers indicate how people seem to prefer to home in on a figure even if it is irrelevant, just because it is something concrete against not knowing anything. The problem is we cannot rely on meaningless figures as a basis for making economic judgements and decisions, as that just leads to failed policies. To then judge politicians by their memory of those figures is just more stupidity.
Of course, politicians should just come clean by releasing the true figures and then properly explaining what they really mean. Many might be initially shocked, and then feel they have even more to distrust about politicians, but we would all be better off knowing how well our country is really being run.