Past performance backs Labor as better economic bet

Over time, academic, popular, local and foreign journal analyses show that Labor governments have managed Australia’s economy far better than the Coalition, writes Alan Austin.

IF HISTORY REPEATS, Anthony Albanese's Labor Government will soon be returned with a reduced majority. But will it repeat?

The May 3rd poll will be the 31st Federal Election since the Second World War. Labor has won 11, while the Liberal Party – alone or in Coalition – has won 19.

As is generally well-known, first-term governments have sought re-election seven times over that period and have won every time. While that looks promising for Labor, victories have varied dramatically.

Only once has a first-term administration increased its majority at its first shot at re-election. That was Bob Hawke's popular reformist Government, which gained seven more House of Representatives seats in 1984, increasing its majority to 82 of the 148 seats. No other first-termers have fared as well.

Factchecking the leaders on cost of living, budget repair and Gaza

In a rare memorable moment during a rather desultory Federal election leaders’ debate on Tuesday this week, Anthony Albanese accused Peter Dutton of gaslighting the Australian people.

Prime ministers who lost seats but retained comfortable working majorities were Ben Chifley (Labor) in 1946, Bob Menzies (Coalition) in 1951, Malcolm Fraser (Coalition) in 1977 and John Howard (Coalition) in 1998.

PMs whose losses reduced them to a slender majority were Gough Whitlam (Labor) in 1974 and Malcolm Turnbull (Coalition) in 2016. Whitlam lost the Federal election 19 months later. Turnbull was dumped by his own party two years later and replaced by Scott Morrison.

Julia Gillard in 2010 lost 11 seats, reducing her caucus to just 72 in the 150-seat House. This forced an unlikely alliance with conservative independents – it turned out, in the end, to have been an effective administration.

Grave predictions fulfilled — every time

Less widely understood is what happened in Australia after the last three elections in which an incumbent Labor administration fought and lost. In every case, the election campaign focused primarily on economic competence, as assessed by perceived past performance. And in all of these, the media played a dominant role in convincing a significant slice of the electorate to believe the opposite of the truth.

Fraser defeats Whitlam (1975)

The Whitlam years saw the arrival of Rupert Murdoch as a malignant force in Australian politics. Lies and distortions by his “reporters” seemed not only tolerated but encouraged. Reportage of all issues – the budget, economic growth, the jobless and interest rates – was routinely falsified.

Hence, Malcolm Fraser’s Coalition beat the progressive Whitlam Government in 1975, despite its three budget surpluses, strong employment and generally sound outcomes.

Thereafter, under Fraser’s hapless Treasurer John Howard, the economy deteriorated badly with negative growth in nine quarters and three recessions. Howard posted record budget deficits four times. Home loan interest soared above 13%, much higher than Whitlam’s peak of 10.38%. The jobless rose from below 4% during the Whitlam years to 9.9% at the 1983 election. (See chart, below.)

John Howard defeats Paul Keating (1996)

Economic management was also critical in 1996 when Opposition Leader John Howard campaigned on “the total failure of Labor’s economic management over the last 13 years”.

Once again, on most variables the Coalition identified as Labor failures, its performance subsequently turned out much worse. The surge in growth and job numbers Keating started did, however, continue, although real wages declined, as shown by the reduced share of gross national income going to workers and the increased slice to profits.

Why Chalmers won't be baited by media misreporting the economy

Australia's incompetent mainstream newsrooms continue feeding the nation anti-Labor editorials as the Federal Election looms. Here's why Jim Chalmers won't take the bait.

Home loan rates at the time of this Election were 7.5%, down from earlier all-time highs and set to fall further. Under Howard, rates continued to fluctuate between 6.0% and 8.0%, offering no benefit to home buyers. Tax rules and rates were changed in favour of the rich, encouraging wealthy Australians to buy second homes, thus starting the current intractable housing crunch.

Worse, hundreds of billions in assets were sold off, some for a fraction of their worth and most proceeds squandered. Instead of closing the 2006-07 year with net investments of around $600 billion, the Coalition had saved a puny $24.3 billion.

Tony Abbott defeats Kevin Rudd (2013)

Tony Abbott’s victory followed a frenzied campaign dominated by malicious media lies about 'Gillard's massive and growing debt'... 'debt spiralling out of control'... a 'debt time bomb' ... a 'budget emergency'... 'skyrocketing debt'... a 'debt spiral', 'deeper and deeper' and a 'budget in freefall'.

In reality, Labor’s debt was essential during the global financial crisis and was actually lower relative to GDP than the debt incurred by Menzies, Fraser and Hawke in calmer times. It ranked third-lowest among the 36 members of the Organisation for Economic Cooperation and Development (OECD).

Tragically, the Coalition, which promised immediate and continuing budget surpluses, abandoned Labor’s policies and then delivered disastrous deficits and deepening debt every year. Australia’s global rankings tumbled.

Over the five years from 2015 to 2019, pre-COVID, all well-managed economies generated budget surpluses.

Countries which produced five surpluses in those five years included New Zealand, Germany, Norway, Switzerland, Hong Kong, Belarus, Kuwait and Luxembourg. Denmark, the Netherlands, Sweden, Czechia, Malta, Lithuania, Bulgaria and even Greece generated four. Another bunch of countries managed three.

Australia, in stark contrast, was one of the conspicuous loser economies that did not generate a single surplus — even under the most benign global conditions seen in 50 years.

AUSVOTES ECONOMIC FACTS #4: Labor brought down government debt by billions

The economy is a dominant issue in the Election. From now until polling day, Independent Australia will outline some key facts on the economy that put the kybosh on many of the myths, lies and distortions being peddled in the election campaign.

Now, fast forward to the last two years.

Of all those countries, only four have generated two surpluses — because conditions have been far tougher.

They were Denmark, Norway, Kuwait... and Australia.

Overall evaluation

Analyses over time in journals – academic, popular, local and foreign – show Labor manages Australia’s economy far better, nearly always surging up all global rankings.

As to what we can expect if the Coalition wins, we must listen to what they are blaming Labor for today. Whatever that is, the Coalition will perform particularly disastrously in that area.

If history repeats.