The Coalition is building their re-election campaign on their economic stewardship. Considering that we’ve severely trended in the opposite direction, maybe they shouldn’t.
Recently, the Coalition has been pitching their economic credentials. It’s growing fast, the exports up with household consumption up and 1.1 million jobs created.
But how are we really faring?
Last week, the ABS released their latest analysis of financial statistics, which tells an entirely different story. Back in the gaudy pinnacle of the global financial crisis, we were among the world’s top performing economies. Now, a decade later, we’re outside the top twenty. So, how did we get here?
1. Matters of economic growth
Annual growth in GDP arrives at 2.77 per cent. Although that compares reasonably well with numbers over the last ten years or so it is as low as Australia has ever been relative to the rest of the world.
This ranks equal 106th out of 183 economies, well down in the bottom half. Among the 36 wealthy, developed countries in the Organisation for Economic Development and Co-operation (OECD) this ranks 15th. The OECD average is 2.94 per cent.
For most of the Labor period of government, Australia’s GDP growth was in the OECD’s top six. In 2009, it was first, with Australia one of just three countries to avoid recession.
2. The budget deficit
In preparation for the next election, The Coalition is focusing on the budget deficit as a hot-button issue. Scott Morrison has already taken to the media to state: “It is only the hard work of the last five years that has put us in a position to be able to have a surplus budget.”
The 2013 deficit (at the end of the GFC) was 1.2 per cent of GDP, the 2018 deficit (after almost a half-decade of global jobs and growth) – was 1.9 per cent.
3. Government gross debt
As of last Friday, gross debt was $537.5 billion. That is up $267.6 billion (or 99.1 per cent) since the 2013 election.
Since 2013, gross debt has expanded from 30.7 per cent of GDP to 41.9 per cent — up 11.2 per cent. This is the worst blow-out of all 36 OECD countries. The majority has taken advantage of the global boom and reduced debt over that period.
4. Unemployment rate
The Coalition may claim that their employment record speaks for itself, but relative to the rest of the world, we’re lagging.
The jobless rate has improved marginally since then to 5.0 per cent, but the OECD ranking has slipped down to 16th.
5. Workers with full-time jobs (percentage)
This has been below 68.8 per cent for the last 32 months. The lowest level this reached during the Howard, Rudd and Gillard years was 69.70 per cent – despite the GFC.
The number of workers that needed more hours breached one million in July 2014. In 2018, we stand at staggering 1,105,457 workers.
7. Wage growth
From September ’17 to ’18, wages across all sectors rose just 2.29 per cent. That figure represents only the fourth time it has dipped under 2.30. It’s worth mentioning that the other occurrences were 2015-2017. Considering that inflation has been steady, it’s hardly an accomplishment.
8. Retail sales crisis
Retail sales over the last financial year happen to be the lowest on record. It stands at 2.55 per cent growth, well below the long-term average of 5.79 per cent.
Looking at the longer timeline, the declines in various OECD rankings tell the full story. Export goods and services volume: down from sixth to 18th, gross national savings: down from ninth to 18th, government spending as a percentage of GDP: down from fifth to eighth, equality of wealth distribution: down from second to fifth.
It doesn’t make for good reading. Considering there has been deterioration in the long-term jobless, productivity, household net savings, building approvals, economic freedom, national income, the nation’s net worth and the value of the Aussie dollar, the Coalition’s insistence on their record steering the economy should be viewed with a heavy dose of salt.
Even if the headlines say otherwise.