Politics Analysis

Economic outcomes destroy pro-Coalition media falsehoods — one by one

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(Cartoon by Mark David | @MDavidCartoons)

All the false narratives advanced by mainstream newsrooms are undermined by official data, as Alan Austin reports.

LAST WEEK'S FINAL BUDGET outcome (FBO) for 2023-24 confirmed that Labor governments are far more successful than Coalition administrations at budget management.

This document debunked several perennial porkies from the Murdoch, Nine and ABC newsrooms, including that Labor always spends more than the Coalition.

Government spending systematically distorted

A misleading article in The Age and the Sydney Morning Herald reporting on the FBO last week quoted shadow treasurer Angus Taylor:

“...This is the biggest spending, biggest taxing government in Australian history. Taxation since Labor came to power for the year just passed, is up $104 billion ... and the vast majority of that they have actually spent.”

What the hapless writer at The Age failed to fact-check was that nearly every budget sets a new spending record as the population and the economy naturally expand.

In fact, only three times since World War II has spending declined year on year. This happened in 1954, 2013 and 2022  in all cases adjusting for an aberrant surge.

The Age’s other failure was ignoring spending relative to gross domestic product (GDP). This was a modest 25.2% in the year to June, only marginally higher than last year’s low 24.5% spending outcome. Those numbers compare with 31.3% and 26.4% in the last two years under the Coalition’s failed Treasurer Josh Frydenberg. Angus Taylor is a craven hypocrite.

Of the seven prime ministers this century, the three worst for excessive spending were all Coalition PMs. See chart below.

What this chart does not reveal, unfortunately, is spending on improved welfare and constructive infrastructure as opposed to sheer waste. Other data confirms that the Rudd and Gillard governments spent vastly more than any other administration on infrastructure, which makes their restraint all the more impressive.

Budget surpluses to repay the debt

Only two governments this century have generated net surpluses over the journey – so far. They are John Howard’s and Anthony Albanese’s. The two worst administrations for budget deficits were the Abbott and Morrison regimes. See chart below.

The $22.1 billion surplus the Albanese Government delivered in 2022-23 was the strongest in dollars since records began in the Gorton period. The latest, confirmed last week, was not as large, but still in the all-time top four.

As a percentage of GDP, these were 0.9 and 0.6 respectively. The highest surpluses to GDP this century were Wayne Swan’s 1.7% in 2007-08 and Peter Costello’s 1.6% the year before.

Crippling cost of Coalition incompetence

Two consecutive surpluses under current perilous global conditions underscore the destruction done by the Coalition from 2014 to 2019, pre-COVID. Those were boom years in Australia with record demand for exports, mostly strong commodity prices, increasing agricultural prices, low global inflation, and international economic stability and growth.

In those six years, all well-managed economies yielded budget surpluses and repaid their debt. Germany, Norway and Luxembourg generated surpluses in every one of those six years, while Denmark, New Zealand, Sweden and Switzerland were in the black five times. The Netherlands, the Czech Republic, Lithuania, Iceland and even Greece recorded surpluses in four of those six years.

Australia, in contrast, was a conspicuous loser that did not produce a single surplus in any of those years of plenty. Not one. Instead, they accumulated total deficits of $169.9 billion and blew out the gross debt from $271.7 billion when they took office to $561.8 billion in December 2019, pre-COVID.

They then badly botched the COVID response, wasting nearly half their vast stimulus spending. At the end of their appalling administration, deficits totaled $421.3 billion and the debt had exploded to $895.3 billion.

Given the conditions, as proven by comparable economies, they should have generated more than $300 billion in net surpluses, even allowing for COVID, and left the nation with no borrowings outstanding, as had been the situation during the Howard and Rudd Governments before the GFC.

The fact that Australia’s current dreadful debt and high-interest payments are directly attributable to the corruption and incompetence of the shonks and shysters who ran the Liberal and National parties over that period is confirmed by Labor generating surpluses and repaying debt in far less conducive circumstances.

Mendacious media contortions

This, of course, leaves Australia’s pro-Tory commentariat with no case for re-electing the Coalition – which they have traditionally based on economic supremacy.

This will not stop them from trying. Last week’s aforementioned “story” in The Age could not find any basis in the FBO for a negative headline, so they concocted one. Headed ‘Budget starts to show the wear and tear of a slowing economy’, the opener read: 

‘A sharp fall in tax revenue from workers and businesses over the past four months has exposed an emerging economic fault line ahead of the coming federal election, despite the government producing one of the largest budget surpluses on record.’

There was no fall in tax revenue, sharp or otherwise. There was a huge rise. Taxes in the year to June totaled a thumping $633.4 billion, the highest ever. This was 23.7% of GDP, the highest since the boom period just before the GFC. It was $32.1 billion above the year before, and $96.8 billion more than the Coalition’s highest tax takeback in 2021-22.

What The Age did was notice that actual tax revenue was slightly below the boffins’ rough estimate in the May budget documents – by 0.83%. They then depicted this as ‘a sharp fall’ foreboding a grave ‘economic fault line’. Pure nonsense.

This is indeed ‘ahead of the coming federal election’. So, Australians can expect more where this came from.

Alan Austin is an Independent Australia columnist and freelance journalist. You can follow him on Twitter @alanaustin001.

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