Who is Australia’s worst post-war treasurer? Based on the deterioration of the key variables over his tenure — yes, they have all been blokes — contenders are John Howard, Joe Hockey and Scott Morrison.
But when rankings of those variables among developed countries are considered, there is one clear winner, er … loser.
Scott Morrison has not only pushed most variables further away from the optimum, but has done so during a phenomenal global upswing.
Growth grinding along
The annual rate of growth of gross domestic product (GDP) looks healthy enough at 3.14%. But relative to the rest of the world this is as low as Australia has ever been.
This ranks equal 100th out of 183 economies, down in the bottom half. Among the 35 wealthy members of the Organisation for Economic Development and Co-operation (OECD) this ranks 15th. The OECD average is 3.26%.
Government gross debt
Gross debt last Friday was $531.7 billion. That is up $147.9 billion, or 38.5% since Morrison replaced Hockey and up $260.0 billion, or 95.7% from the 2013 election.
Debt compared with other countries
Since 2014, gross debt has expanded from 34.2% of GDP to 41.9% — up 7.7%. Of the 35 developed OECD countries, only Mexico (8.6%), Chile (8.7%) and Norway (8.7%) have performed worse. The majority – 22 countries – have taken advantage of the global boom and reduced their debt over that period.
Interest on government debt
Labor paid $8.29 billion in net interest in its last financial year, 2012-13. The Coalition paid $12.04 billion in 2015-16 after two Hockey budgets. It paid $13.13 billion last financial year after Morrison’s two budgets.
Full-time versus part-time work
The percentage of all workers with full-time jobs has fallen significantly on Morrison’s watch. The lowest this reached under Labor was 69.7% in mid 2013. It tumbled to a new low under Hockey of 68.9%. It bottomed out again under Morrison at 67.7% in early 2017, and settled at 68.3% in July.
Workers needing more work
Joe Hockey departed as treasurer when the percentage of part-time employees wanting more hours hit the all-time high of 30.1%. That has barely budged since, down to just 29.5% at last count. The long term average – since 1985 – is 22.9% of all jobless.
Ballooning public service
The percentage of all workers in government jobs rose from 24.4% when Hockey started to 25.2% when he finished. This peaked at an all-time high under Morrison of 25.8% late last year, and is now just a shade lower at 25.7%. Labor averaged 23.2%.
Inflation
This jumped to 2.1% in the June quarter, up from 1.9% a year ago, and 1.0% two years ago.
Real wages whacked
Over the full financial year to June this year, wages – public and private sectors – rose just 2.14%. That is the third lowest year-to-June result on record. The second lowest was 2.06% in 2016 after two failed Hockey budgets. The lowest was last year, after Morrison’s first budget.
With inflation at 2.1%, this is effectively no increase in real terms.
Steep tax rise
Total taxes collected last financial year were 22.7% of GDP. That is the highest since the Howard/Costello period.
Savings slump
Household net savings averaged $60.9 billion over Labor’s six years, which included the global financial crisis. Unsurprisingly, this rose during the two Hockey years to average $69.5 billion. This has collapsed under Morrison to $46.3 billion in 2016-17 and down to a miserable $24.0 billion in 2017-18. Mega fail.
Retail sales crisis
Crikey readers know Australia’s growth in retail sales for the financial year 2017-18 was the lowest on record. At just 2.55% growth, this is a real decline after adjusting for population and inflation. The long-term average rise is 5.79%.
New dwellings approvals
These have slumped alarmingly under Morrison, after steady rises through the Labor and Hockey periods. The transition year 2013-14 registered 200,461 approvals. This rose to 238,798 in 2015-16. It then slumped in 2016-17 to a dismal 221,826. It recovered to 230,721 last financial year, but remains below two and three years ago.
Economic freedom
Heritage Foundation ranked Australia’s economic freedom through the Labor years third in the world. In 2014, Australia’s score fell but the ranking stayed at three. In 2015, Australia’s score fell again and ranking slipped to fourth. In 2016, Australia’s score dropped further and ranking tumbled to fifth where it has remained since.
Let’s hope ScoMo turns out to be a better prime minister – should his colleagues so decide – than he was treasurer.
The one who did the tax cuts and the superannuation exemptions we could never afford – Peter Costello. The “deficit crisis” will return as soon as the next election is over and if the so-called low tax party wins we will seek 2014 Budget style cuts to education and health.
The iron rules of mathematics apply. Great work Alan. Hope Labor take note of your excellent analysis and use it in the election campaign.
Alan, it’s always instructive to read your pieces, thanks.
I just asked my elderly mother “Who is Australia’s worst post-war treasurer?”. Her answer: Wayne Swan.
Amazing how the myth of Labor’s economic incompetence persists, isn’t it? Of course, the LNP have spent decades spruiking it and the people believe what they’re told.
I wonder if she meant the same Wayne Swan voted World’s Best Treasurer by Euromoney magazine in 2011…
I too am staggered by how many economic dummies are just like Charlie Chaplin’s mom….believing the nonsense that the Liberal and National Conservatives are somehow the best economic managers for this country.
If you’re a wealthy periodontist, or a hedge fund manager, or a property developer you might indeed agree, but the tragedy is that it’s mostly lower and middle income earners who subscribe to the rubbish promulgated by the Cons and clearly repudiated by this article.
Wayne Swan clearly deserved his accolades as World’s Best Treasurer for his work during the GFC; Peter Costello’s efforts during the massive mining boom which poured endless funds into the coffers, could, with respect, have been handled equally well by a drover’s dog.
Agree, don’t forget that both sides agreed to sell our gold at 325 an ounce, later to go as high as 1775, the Libs handed out $5000 babies plus a massive number of $30K C-sections to buy the mommies votes, just to get them selves re-elected and then spend $2.2 billion killing 450K children for something the kids had nothing to do with. So there financially and morally bankrupt.
Yet again, another one for the word.doc files from AA, a real keeper.
Many thanks, even if it is depressing to contemplate.