Relative to the rest of the world, Australia’s economy now is worse than at any time in the past.
Ever. It is deteriorating further with each quarterly set of numbers.
Annual growth in gross domestic product (GDP) in the December quarter was a dismal 2.34%. The quarterly rise was just 0.18%. The latter ranks an appalling 32nd out of the 36 OECD members. It ranks 77th out of the 92 countries worldwide which record growth quarterly. Lowest ranking ever, by far.
With an election looming these numbers should remove any lingering doubt regarding the Coalition’s incompetence in economic management.
Treasurer Josh Frydenberg hailed this week’s growth data with the mix of half-truths and blatant falsehoods we now expect from this Government:
‘Today's National Accounts show that the Australian economy grew by 2.7 per cent in calendar year 2018, consistent with trend growth.’
That is quite false. The release from the Australian Bureau of Statistics (ABS) clearly shows annual growth – December quarter 2017 to December quarter 2018 – is 2.3% in both trend and seasonally adjusted numbers. This is well below trend growth, which has averaged 2.83% over the last four quarters and 2.62% over the last five years. It averaged 3.04% over the ten years before this hapless regime took charge.
In fact, taken to two decimal places – which is necessary for valid comparisons when numbers are low – annual trend growth was 2.27% and seasonally adjusted 2.34%. We will use the higher one in this analysis.
‘For the December quarter 2018, real GDP grew by 0.2 per cent, within the range of market expectations’
There’s that magical, mythical "market expectations" once more — against which this Government routinely, and sneakily, tries to benchmark its outcomes. In fact, the GDP growth of 0.18% – calculated from the ABS data to two decimal places – is well outside any range the Treasurer cares to look at, as we shall see.
‘Australia continues to grow faster than all of the G7 nations except the United States’
This is true of the annual numbers, but not of the more recent quarterly figures. Four G7 nations – France, Japan, the USA and the UK – now have higher quarterly outcomes than Australia.
But so what if it were true? Australia is not a G7 nation. Frydenberg may as well claim that Australia’s growth is better than all poor African desert countries (Except that that is not true either. Ethiopia, Libya, Mali and Niger all now have higher GDP growth than Australia’s).
The only valid comparisons are with the other 35 wealthy, developed member countries of the Organisation for Economic Cooperation and Development (OECD). And with the rest of the world.
The quarterly rise of 0.18%, as shown above, ranks 32nd out of the 36 OECD members, and 77th in the world.
Annual growth of 2.34% ranks 20th out of the 36 OECD members, and 113th out of 183 countries worldwide. Lowest ever by far, tumbling from 106th one quarter ago. In several quarters during the Labor years, Australia ranked first in the OECD.
‘With the unemployment rate at its lowest level in seven years … our economic foundations are in good shape’
Again, quite false. Australia’s jobless rate is at 5.02% is the same as it was back in 2011, when the whole world was in the worst global financial crisis in eighty years. Australia’s jobless rate then ranked sixth in the OECD. Now, after five years of strong global recovery, Australia ranks 17th.
‘Household consumption continued to contribute to growth in the economy, growing by 0.4 per cent in the quarter and by 2.0 per cent through the year, with 12 of the 17 consumption categories recording growth'
Twelve out of 17 is appalling. With population rising at 1.6% per year and inflation at 1.8%, there should be a steady rise in all categories of consumption. The fact that there obviously isn’t is another warning sign – danger, disaster ahead! – not a cause for self-praise.
‘Households are benefiting from solid gains in compensation of employees ... increasing by 0.9 per cent in the December quarter to be 4.3 per cent higher through the year – higher than the five year average growth rate of 3.4 per cent.’
This is nothing whatsoever to brag about. After adjusting for workforce growth and inflation, this is an extremely poor outcome, given the current global surge in jobs, wages and profits.
The average for the last five Coalition years is indeed 3.43%. But the average for the six Labor years was 5.31%, despite the devastating global recession. The average for the eleven Howard Coalition years was 6.66% — almost double the outcome of the Abbott/Turnbull/Morrison period.
‘Improving the incomes of wage and salary earners remains a core focus, with the Government already providing tax cuts to 95 per cent of taxpayers’
Two points to note here. First, tax collections show the cuts have been disproportionately skewed towards the rich. Low-income taxpayers have gained little, if any, tax relief.
Second, this has come at an enormous cost to future generations. Australia’s gross debt has ballooned under this Government, primarily because it has refused to collect taxes due from the rich and from the highly-profitable, big, foreign corporations.
Frydenberg is trying to use these figures to persuade voters to ‘to stay the course with the Government's economic plan … which is delivering more jobs, a stronger economy.’
The opposite is true. When outcomes are analysed carefully, the figures show the last five years have been the worst for economic management in Australia’s post-war history and, arguably, the worst of any wealthy, developed nation in the world.
This should, indeed, inform voters at the next election.
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