Geoff omitted to mention the impact of energy costs. It’s a matter of simple arithmetic to show that, all other factors held constant, a real rise in energy cost produces a real reduction in GDP. Carbon pricing causes, and is intended to cause, a switch to more expensive energy forms. While the carbon tax itself may be recycled and redistributed, with little overall effect on economic wellbeing, its effect of forcing a shift to intrinsically more expensive energy will be real.

Some of the real per capita decline in income that Geoff points out ought to be attributable to rising energy costs. Economic modellers will be able to tell us exactly how much. As part of our response to climate change, this is vital information

< The latest real GDP figures don't tell the full story. >

Gee, what an almighty understatement!

GDP, which includes all economic activity, whether it is productive or not, which turns negatives into false positives, such as the economic activity generated by smoking and drinking-related illnesses and cyclones and floods, doesn’t tell us the full story about our economic wellbeing.

Well….you don’t say!!

Oh, and it doesn’t take into account our environmental health, resource base health, the sustainability of resource provision or the highly uneven distribution of wealth.

In fact, it is the most godawful measure of economic growth, let alone quality of life!!

< Slowing GDP growth, falling terms of trade, slowing/poor productivity growth and growing population are combining to shrink Australia's per capita income 'cake'. >

YES!!

And what is the most easily manipulable factor amongst these?

Population growth.

If we were to reduce the immigration intake by a significant amount, it would no doubt have a pretty big influence on per-capita economic returns.

< How should we deal with this income recession? >

< The more durable and more honest solution is to increase productivity. >

Oh PHOOWEY to that! For as long as we have a rapidly growing population, increased productivity is just chasing its tail, trying desperately to keep the same level of economic returns up to ever-more people.

What we need is to maintain our current very high rate of productivity, not least in the mining sector, and STABILISE the demand for this productivity. That is; head directly towards a net zero immigration regime.

continued

This is really amazing. The author mentions population growth as a negative factor, then asks what we can do about fixing the apparent recession that we are supposedly in…. and doesn’t even mention a reduction in population growth as part of the solution! ( :>|

< Unless this productivity policy failure is reversed quickly, the new year will only get worse, one way or another. >

No! It is NOT a productivity failure; it is a failure to match the demand for this productivity with the supply capability.

Once again, we have the incomprehensible position taken by an article writer, who just blithely panders to an ever-increasing demand, even when the productivity supply is faltering, and offers only one real solution; to increase productivity…. which is not a real solution at all!!

This is just crackers!

BALANCE. THIS is what it has got to be all about. Balancing supply and demand, and doing it in a sustainable manner.

Pandering to an ever-increasing demand is utterly the WRONG thing to do!

Not to forget that average real wages remain below those of 1972, despite recent pay increases. Therefore, lower average real wages, plus massive increases in mortgages, leads to incredible levels of household debt. That all adds up to the economic recession you mention, if not depression.

But, as Steve Keen says, the modern neo-classical economist believes household debt cancels out, with one Australian owing another. Er, no. It's banks creating money by lending against bubble-inflated land prices for thirty years.

The US, Europe--and eventually, Australia--will fail to resolve this crisis until they realse household debt that can't be repaid won't be repaid. Therefore, the sooner mortgages are written back to market levels and loans renegotiated in the US and Europe--and eventually Australia--at current market value with banks taking their hit for risk-management negligence, the better.

Geoff could this be the start of a change of direction for you. Have you read the draft IPCC report, & realised, as they have, that the planet itself, is soon to put the lie to the whole global warming industry, as it cools.

It would appear that many involved in the IPCC are changing the rhetoric, realising that their jobs won't be around too much longer.

As Tombee said you should have included the increasing cost of energy in your analysis. The only western countries that will come out of this economic melt down will be those who start chasing China & India first. Those that don't exploit any economic advantage fully & quickly will be in the poo very deep.

Our only economic advantage is our access to cheap energy, & our mineral wealth. Frittering away most of this on a carbon tax, to be wasted by big spending government is economic suicide.

Take the plunge, & face facts. Get off the global warming train, before it finally crashes, & start promoting economic success.

We should be the home of aluminum manufacture to the world, with our advantages, but we must scrap these costs, that just keep us down & becoming another broke western economy, destroyed by the green rhetoric, & government greed.

@Hasbeen. The draft IPCC report leaked online last Friday does not support your contentions. It was leaked by Alec Rawls, one of 800 members of the climate panel and a well-known climate change sceptic.

This is only a draft document and the full final version of the document will not be released until September 2013. Papers will still be received until March 2013. There is still a rigorous peer review process going on.

Bob Ward, policy director at the Grantham Research Institute on Climate Change at the London School of Economics said the leak was "cheery picking quotes out of context".

Quite.