At every opportunity, Scott Morrison and Josh Frydenberg declare that “our economy today is one of the strongest in the advanced world”, as the PM did at the 22-second mark in the recent televised leaders’ debate, then again several times later. This is not just false but the diametric opposite of the truth, and is extremely easy to disprove.
Economic outcomes are measurable. We have tables already assembled for most important variables. We don’t need complex formulae, or even a calculator. We just need to read numbers off a screen.
Income per person
The International Monetary Fund (IMF) lists for 197 countries the value of gross domestic product (GDP) per person in both domestic currency and in US dollars. If we take the latter and focus just on the 38 developed members of the OECD, we can easily compare rankings over time.
In 2007 and 2008, as Labor started its last term, Australia’s GDP per person was just under US$50,000, which ranked 11th among the 38 wealthy OECD member countries. That is, the citizens of 10 countries earned more money than Australians did. From 2011 to 2013, Australia ranked fourth on this measure, with only small, rich nations Norway, Switzerland and Luxembourg earning more.
Australia’s ranking then slumped through the Coalition period since 2013. It is now eighth, having been overtaken by Ireland, Iceland, Denmark and the USA.
Economic growth
Advanced countries release GDP figures quarterly, showing by how much they have increased or decreased. The open website tradingeconomics.com keeps track, going back decades.
We now have annual GDP growth for the December quarter 2021 for all 38 OECD members. Australia’s 4.2% currently ranks 27th.
Jobless rates
The IMF also has global jobs data from 1980 onwards. In 2008, Australia’s unemployment rate was 4.26%, which ranked tenth in the OECD. By 2012, towards the end of the global financial crisis (GFC), Australia’s rate had expanded to 5.23%, but ranking had improved to sixth. Only Switzerland, South Korea, Norway, Japan and Mexico had lower jobless rates.
During the boom years between the GFC and the COVID recession, Australia’s rate fluctuated but ranking tumbled badly. By 2019, the rate was 5.16%, ranking 21st. Through the pandemic, both the rate and ranking improved slightly. At the end of 2021, Australia ranked 16th.
Government spending
Morrison frequently accuses Labor of knowing how to start spending but not how to stop. The data refutes this.
The IMF shows Australia’s spending to GDP ranked 14th in the OECD through most of the last seven years of John Howard’s Coalition government. That is, 13 governments spent less of their nation’s total income than Australia’s government did. These included the poorer members — Costa Rica, Colombia, Mexico and Turkey — and the lean administrations newly emerged from Communism — Latvia, Estonia and Lithuania.
Under Labor, despite extensive stimulus spending through the GFC, Australia’s OECD ranking on this variable actually improved substantially. By 2008, Australia had risen to ninth in the OECD on low spending to GDP, then fluctuated between seventh and 10th through the rest of Labor’s term.
Soon after the Coalition took office, government spending blew out again. By 2015, Australia ranked 13th, then slipped to 14th over the next two years. In 2019, before the pandemic, Australia had tumbled to 16th, the lowest on record. The latest ranking, for 2021, is 15th. The only country with a substantially worse spending record since 2013 is Chile.
Government debt
The IMF shows Australia’s gross debt in 2008 was 11.7% of GDP and ranked third in the OECD, just behind Estonia and Chile. By 2012, after extensive borrowing to combat the GFC, debt to GDP had expanded to 27.5%, with ranking at fourth, having been overtaken only by Luxembourg.
Then came the long boom period from 2014 to 2019, when the majority of the OECD economies reduced their debt to GDP, many of them substantially. Only three poorly-managed economies stacked on more than 12% over those five years — Chile, Costa Rica and Australia. By 2019, Australia ranked 15th.
The COVID pandemic then required more borrowing by most OECD countries, although not all. At the end of 2021, Australia’s debt had blown out to 59.8% of GDP, and OECD ranking had tumbled to 18th.
Value of the Aussie dollar
The Australian dollar soared through the Labor years as the economy was rated by most peak economic bodies as the world’s best performed. These included the World Bank and the IMF. The Aussie dollar was US87.7 cents when Labor took office in late 2007. This rose impressively through the GFC, enriching all Australians enormously. It peaked at US$1.10 in mid 2011 and settled at US94 cents when Labor lost office. The dollar has tumbled disastrously since then, reducing the wealth of all citizens — the latest value is about US72 cents.
We can also look at wage rises, productivity and other variables to see the same trends. Clearly, Australia’s economy is not leading the advanced world. It is barely leading Costa Rica and Chile.
For God’s sake don’t confuse people with the facts!
Very concise and well written article.
One thing you could look at is inequality as measured by the Gini index and the median income and wealth per person. It is important not to use the average income as this is biased upwards by people like Gerry Harvey now worth $2.1 billion whose wealth was only 1 Billion about nine years ago.
I have tried to analyze this myself, but I don’t have access to the data.
Lies , damn lies, and Scott Morrison”s Bull Shxt. You may be able to trust a thief but you can never trust a liar.
Liars and bullies – I sincerely despise and loathe both and hope to see the current batch get defeated on 21st May. 3 years under them and 7 under the same Coalition is far too long. This last cabal has gone far more to the Republican playbook in its views and policy attempts. Enough is enough.
Rorters ,Liars, Bullies ,Thieves .Would you like to see another term of more of the same ? Kiss climate control good by and look forward to more “one in 500” disasters every second year .
Wealth data can be found at Credit Suisse.
Yes, during the Labor years, median wealth was highest in the world. It isn’t any more.
Credit Suisse wrote this in their 2013 Wealth Report:
“Interestingly, the ranking by median wealth per adult is slightly different, favoring countries with lower levels of wealth inequality. Australia (US$220,000) tops the list again this year, with only Luxembourg ($183,000) in close contention.”
https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html
I looked into it briefly a while back. From memory:
The average income is around $20k – $30k more than median income. Median (full time) income was around $60k and average full time income was around $80k – $90k.
Full time median wage for women was less than $50k.
If you are being paid the average income you would be in the top ~20% of income earners in Australia.
Ouch. Thanks for this piece. So refreshing to read facts rather than opinion/spin.
Wouldn’t it be remarkable if the ABC actually grilled LNP spokespeople relentlessly on these figures, after giving them the chance to make their false claims? But of course it won’t happen, maybe Laura Tingle might mention the truth in passing.
As for the Murdoch/Costello/Stokes media telling the truth – pigs might fly.
Very few journos. are numerate – that’s why they scribble rather than do something useful.
That would require measuring or calculating using those horrid number thangies.
Agree with that. All journalists would do well to complete an accredited course in numeracy covering statistics, graphs, context etc. Ditto for politicians. It’s essential for competent commentary on economic or scientific data.
It’s a great shame that our MSM is owned by so few which leaves a sad and very small group of journalists who can be relied upon to write the truth let alone question the conservative opinions. This government’s lack of accountability and transparency is a disgrace.
Yes perhaps they are only saying the economy has never been better for billionaires. If thats what they mean then they are right on. Billionaires have done very well under this corrupt government. I assume that the individuals who write our laws in favour of the billionaires are also picking up some personal benefits under the counter somehow. I’m sure somebody must know how its being done. We need a whistle blower from one of the big 4 perhaps.
Climate Change and ICAC are the only issues to consider in this election. All other issues are irrelevant unless we take action against Climate Change and corruption.
I reckon the whistleblowers will come out of the woodwork, once the punitive LNP regime of secrecy and abuse is stripped away.
Should Labor take Govt . . . very first action: Full documentation detailing out-going Govt’s budgetary health, successes, failures. Why, When and How! Start new era based upon factual data inherited. No more Pink Batts / Best economic manager / Sports Rorts / Parking Lots etc etc
Not sure if that will happen, it’s more about obtaining power these days than about building economic wealth.
The last government to actively build wealth for the average and low income earner was the Hawke-Keating government. Some setbacks of course but that was their stated goal and achieved in the main.
Yeah, the HawKeating Accord, really helped “…build wealth for the average and low income earner…”.
coff, coff splutter…
You jest!? Hawke-Keating was a government for the big end of town. Its stated and intended purpose was not, to be fair, to impoverish people generally, but to increase the wealth and power of businesses, the larger the better, for a bunyip version of the trickle-down effect. They did this by the traitorous Wage-Prices Accord which saw real wages of salary earners reduce 10% between 1983 and 1991. Some building of wealth!! It is true they wanted what was best for the country but as it was protected, oligopolistic if not monopolistic businesses which benefited from post-war economic policies, with little incentive to modernise in any meaningful way, they didn’t have to wear the costs of the economic reform instituted by said Govt. The Hawke Government with Keating as Treasurer merely instituted the recommendation of the Campbell Committee into the Finance Industry. The goals of this and the goals of the real neo-libs at the time who understood the way the economy worked or the nature of the finance sector, realised that the money supply of Australia was constrained at the time. Limited. And there were rules and restrictions into how much you could borrow and from who and for what purpose. With financial deregulation, more competitors could enter the market, the banks could set how much you could borrow and the banks and finance companies could access finance from sources outside the country. This made Australia powerful and modern but in the process, which included removal of some industry protection, saw many manufacturing companies shut down, or relocate, or rationalise. Many jobs were lost and never came back. The finance and services sector overall grew with its sharks, shonksters, dodgy people and its insecure employment basis. I am afraid that this goal was achieved largely under Howard until he realised his inner (you know what) and instituted WorkChoices. Had Rudd/Gillard replaced this with something a lot more substantial than the FWA (WorkChoices lite) then the low to average income earner would have stood a better chance in the years leading up to and during the current COVID pandemic and its aftermath.
Good precis but paragraphs, pleeeeez!
Not that easier reading would stop the apparatchiks downvoting anything pointing out the plain facts about those class traitors.
The havoc they wrought – destroying the unions’ bargaining power and any thought of class consciousness – did what the Rodent could only dream of and made his reign of misrule faster & easier to impose for over a decade.
I might be misinterpreting but you comment does not link in any way.
Thank you for this very good article Bernard. It is important to remind voters of just how much Australia’s ranking has slumped during the Coalition period since 2013 under the Abbott, Turnbull and Morrison governments. The current OECD Secretary, General Mathias Cormann only assumed the position in June 2021 so he must also take joint responsibility for Australia’s slump in world rankings as he was the Coalition Minister for Finance for seven years, and well known for enjoying a cigar or two with Joe Hockey.
Its not Bernard, it’s Alan.
This was Alan Austin – neolib BK would chew off his own arm rather than state the plain truth so clearly.
Yes thank you Alan.