Addressing the Chamber of Commerce and Industry of Western Australia, Scott Morrison admitted we need to drastically slash the unemployment rate, but then offered very little as far as ways to achieve that any time soon.

Underemployment is a serious problem in Australia, unemployment is too high and Australia’s labour market is sputtering. Mr Morrison more or less acknowledged that in his speech, his first major one since becoming PM, and that’s a good thing.

“The more jobs that are created, the more Australians keep entering the workforce, increasing participation rates also to record levels, forcing economists to now postulate that full employment is now an unemployment rate closer to 4.5 per cent than 5 per cent,” he said.

That counts as an admission we need to do something about the jobs market.

“For our Government, it’s always been about jobs,” the PM added.

But what’s also important is what Mr Morrison’s speech didn’t say. It barely acknowledged the problems that have been raised to fever pitch in communications from Australia’s central Bank. The PM’s speech would have been wonderful in another, brighter era.

Australia’s economy is alive, but wounded. We are backed into a corner. We have little capacity to move if things go wrong. We’ve run out of room on monetary policy, with the Reserve Bank cutting rates further still from its from record lows, and admitting that “there are limits on what further monetary easing can achieve”.

Meanwhile, we depend on China, and US President Donald Trump is doing everything he can to make China’s life hard. Chinese economic growth is now forecast to be lower than it was — down to 6 per cent next year, according to the IMF. And that’s assuming the wheels don’t totally fall off.

REMEMBER JOBS AND GROWTH?

We have economic growth of just 1.8 per cent, unemployment is rising, and our old steady levels of wages growth have collapsed to a level barely above our limp inflation rate, which is now just 1.3 per cent. Aussies face a worsening job market and low growth. Remember the old slogan, “jobs and growth”? Both of them are fading before our very eyes.

In this context, Mr Morrison’s speech was tragicomic. He did acknowledge the trade war, the drought and the recent housing correction. But then he politely requested businesses to show government how to cut red tape. Which might perhaps help a tiny smidgen. Eventually.

“Step one is to get a picture of the regulatory anatomies that apply to key sectoral investments. Step two is to identify the blockages. Step three is to remove them, like cholesterol in the arteries,” the PM said, as though a lengthy process was just what the doctor ordered in these times.

Mr Morrison demonstrated no new thinking on how to confront a sharp, immediate downturn. No reassuring ideas. Instead he spent a good chunk of the speech on tired political issues.

BRACKET CREEP

The tax cuts the Prime Minister promised in the last Budget are apparently the centrepiece of the Government’s economic strategy.

“Our proposed tax relief doesn’t just have a strong political mandate. It has a compelling policy rationale,” he said. Now, the $1080 tax refund for middle income workers that should be coming soon will help. The Government reckons it is as helpful for the economy as two interest rate cuts — it should provide a welcome boost for households and the retailers who will be the beneficiaries of their spending.

But that’s not new policy. The RBA knew that was coming when it was forced to slashed interest rates. And what’s more, the majority of his tax reform program is miles off, and aimed at removing the higher tax brackets.

“Under our changes, from 2024-25, 94 per cent of Australians will pay a maximum marginal tax rate of no more than 30 cents in the dollar,” Mr Morrison said.

This has essentially nothing to do with our very real, very immediate economic threats. Tax cuts for higher income earners in the middle of next decade will not create jobs in the second half of 2019.

Mr Morrison also spoke at length about how the Government will “protect investment from the impact of militant unions”. The unions are allied with Labor and they’re in terrible decline anyway. Unions are not a serious impediment to the economy. That part of the speech was naked politics.

Building skills, investing in infrastructure and financial technology. These were all part of his speech. They are fine ideas but they’re scarcely untried. A speech like this could have easily been given during idyllic economic conditions in 2006 — it shows neither strong understanding of the immediate and unusual threats to the Australian economy, nor anything in the way of creative new thinking about how to get us out of our current struggle.

Of course, the Government has a whole research body that is charged with coming up with good reform ideas — the Productivity Commission. It has a big report out on smart, courageous, helpful things the government could do, including fixing health care and our appalling traffic. None of these ideas were seen in the PM’s speech.

“Mediocrity beckons if we let it,” the Productivity Commission warns. Are we going to let it?

Jason Murphy is an economist. He is the author of the new book Incentivology. Continue the conversation @jasemurphy