Weak GDP growth not helping working people
“The weak growth in economic activity, coupled with more people not in work, in the three months to December, have a significantly negative impact on the incomes of working people,” says CTU Economist Bill Rosenberg. “The growth in spending by households in real terms was also weak. We can see why some people say they have never seen a ‘rock star economy’. More families have both adults working so they can earn enough income to make ends meet.”
“Per person output fell 0.2 percent in the three months. It is just as worrying that productivity in terms of GDP per hour worked fell almost 1 percent (0.9 percent) over the same period, and 1.4 percent in the last six months. This is bad for future wage growth,” Rosenberg said.
The Budget is a timely opportunity to address these growing concerns, and the government has the revenue to do it, says Rosenberg. “This is not the time to cut government revenue, stripping it of the ability to boost struggling public services which people need and which would help strengthen the economy and provide jobs."
“There needs to be a much greater focus on raising productivity and helping people through change without big blows to their income and security. The Government should announce a significant increase in spending on research and development and encourage greater research and development in the private sector whose weakness hurts productivity growth. It should strengthen income, training and employment support for people whose jobs are taken away. It should ensure working people see the benefits of rising productivity in their bank accounts by fairer law for pay setting,” Rosenberg said.