Is it still possible to regard the Abbott administration as merely incompetent — or does it have another agenda? Alan Austin investigates.
"This Government’s wilful disregard for Australia’s interests is demonstrated clearly in the area of trade."
When Opposition shadow treasurer Joe Hockey condemned Julia Gillard with that put-down in June 2013, Australia’s trade deficit was -$532 million. Not brilliant, but historically not bad.
Australian Bureau of Statistics (ABS) figures released on Thursday show the deficit in April was -$3,888 million — more than seven times worse. This is a staggering increase of 216% over the March figure and the worst number in Australia’s history.
Coalition leaders were also scathing of economic growth under Labor, despite it being the second highest among developed OECD countries through the global financial crisis (GFC).
Hockey said in 2013:
"It will be my number one imperative to safeguard the economy against a significant downturn and to turbo charge economic growth and jobs.”
Wednesday’s ABS figures show GDP growth is now 2.3% — 19th in the OECD.
These two revelations and other critical events in the last week may well have shifted Australian political analysis. Is it still possible to regard the Abbott administration as merely incompetent? Or does it have another agenda?
Abbott and Hockey in Opposition identified 20 areas of economic "failure" under Labor. All 20 have deteriorated in the last 19 months. Some disastrously. The two announcements, above, on (1) trade and (2) GDP growth, complete the full boxed set.
The others are:
In November 2012, Abbott said [IA emphasis]:
"The Coalition’s priority will be to build a powerhouse economy through lower taxes, more efficient government and more productive businesses that will deliver more jobs [and] higher wages ..."
The opposite has been delivered:
5. Lower taxes
April Finance figures show the Government will collect $362 billion in taxes this financial year. That is 6.0% above last year’s $341.6 billion. That was 4.7% higher than the $326.4 billion Labor took in 2012-13.
Taxes will increase by another 5.0% to $380.1 billion next year. Taxes are now much higher.
Since the March quarter of 2011 when the Queensland floods caused a dip, there was a steady rise in productivity throughout the Gillard/Rudd period. Nine consecutive quarterly rises, in fact.
In the seven quarters since the September 2013 election there have been three falls. The latest and heaviest – 0.8% in the first quarter of this year – wiped out virtually all gains over the previous year.
Australia must now lift productivity to make up for falling resources prices - The Australian Financial Review... http://t.co/77hlESFUex— Gavin (@productive_talk) June 4, 2015
7. More jobs
Seasonally adjusted, the jobless rate has fluctuated between 6.1% and 6.3% for the last eleven months. This is substantially higher than the 2012-13 levels of between 5.1 and 5.7.
8. Job participation
This has been stuck at or below 64.8% for nine months. The 2012-13 range was a healthier 64.9 to 65.2.
9. Higher wages
The latest ABS figures show wages in Australia are now growing at their slowest pace since wage levels were first recorded.
Abbott promised in 2013
"... to boost construction industry productivity to the tune of some $6 billion a year."
The value of non-residential buildings in 2014 fell 11.3% from 2013. The only other decline since this series began was at the depths of the GFC.
Figures for 2015 are no better. Total for the last three months is the lowest since 2005.
Tony Abbott promised
"... to be an infrastructure prime minister who puts bulldozers on the ground and cranes into our skies."
12. Interest rates
Joe Hockey said in 2013:
"If interest rates come down today, it’s because the economy is struggling."
That was when the rate was cut to 2.5% — where it remained for 19 months. Six months after Hockey became Treasurer it fell to 2.25 and was cut again to 2.0 last month.
Hockey lamented in December 2013 that:
"Without a significant improvement in our productivity growth ... we are facing the slowest decade of national income growth since the National Accounts were first introduced in the 1950s. That is not acceptable to the Coalition."
Australia’s real gross domestic income has now stopped growing altogether and actually dropped for the last three quarters.
14. Gross domestic product per capita
Even more worrying, Australia’s GDP per person has declined for two consecutive quarters.
15. Business confidence
When Abbott took office, the NAB’s monthly index* was a creditable 12. The average for the last six months has been just two.
16. Economic freedom
Abbott said, in Opposition:
"As Liberals, we support smaller government, lower taxes and greater freedom."
Heritage Foundation ranked Australia’s economic freedom through the Labor years third in the entire world. In 2014, Australia’s score fell and the ranking dropped to fourth. Heritage’s report noted declines
‘... in investment freedom, freedom from corruption, and the control of government spending.’
17. Small government
Abbott promised that
"Each year, government will be a smaller percentage of our economy."
Last month’s Budget reveals the government sector will be larger in all four years of the forward estimates than in any of the last three Labor years.
18. Government spending
Abbott also promised:
"There will be no new spending under a Coalition government that’s not fully-costed and fully-funded."
Since then, unfunded spending has increased to an all-time high.
19. Government waste
In Opposition Hockey vowed to cut ‘waste and unnecessary spending’.
20. Company profits
Abbott repeated ad nauseum:
"You can’t have a strong economy without profitable private businesses."
Company gross operating profits, according to the ABS, have fallen over the last year by 7.5%.
So there they are. Twenty areas in which the Coalition castigated Labor and promised greater success. It has failed in all 20.
How is this possible in a country so abundantly resourced?
Incompetence? Or is it rather the case that the Government is not trying to build a successful economy at all?
That question can be answered by observing what the Government actually has accomplished.
* Editor's note: A previous version of this article incorrectly had the index in #15 as ANZ rather than NAB.
The author welcomes interaction on any aspect of this series. Assistance locating detailed raw data from ABS tables and elsewhere is readily available via the conversation following the article. You can follow Alan Austin on Twitter @AlanTheAmazing. The original John Graham artwork reproduced in the piece may be purchased from the IA store here. Next instalment soon: 'What are Abbott and Hockey really trying to achieve? Part two: Current shifts in wealth and income'.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
Support independent journalism. Subscribe to IA for just $5.