The way the statistician has framed his questions on unemployment levels has concealed the effects of the major retrenchments in media, telecommunications, real estate, manufacturing and other areas.
Large numbers of middle class Australians received sizeable retrenchment packages and often classed themselves as consultants which yielded small amounts of money. But now the retrenchment money is starting to run out and the consultancy revenues are drying up, forcing more and more Australians to seek help or reclassify themselves as unemployed.
In Business Spectator we sent out an alert to the depth of this problem (Invisible cuts to the middle class, September 18).
Roy Morgan Research asks better questions and has always had unemployment at a higher level than the statistician. But in the last few months Morgan has picked up much larger numbers of unemployed and the gap between him and the stats has widened.
In essence, Morgan is telling us where the statistician is headed. That trend will not always be picked up on a monthly basis but in 2013 unemployment on the statistician's figures will be a lot higher than 5.4 per cent.
This means that interest rates are going to go lower and stay down. In theory the currency should also go down, but Australian rates are still higher than comparable figures overseas and huge lumps of money are coming into the country to finance the gas projects.
Australia’s great problem is that the higher dollar is giving us a heavy dose of Dutch disease not only in industries like education, accountancy, tourism and manufacturing, but it's also now hitting the mining companies themselves – the groups that created the high dollar. It’s an ironic twist.