The tongues of the political punditry may have wagged over Tony Abbott's absence from an economic debate with Kevin Rudd, but this is not by any means the most significant facet of today's events at the National Press Club.
What really counted is whether the go-it-alone speech by Rudd signals a change in economic direction by the reinstalled Prime Minister, acknowledging the failings of fiscal and monetary policy management over the past six years.
On the basis of listening carefully to Rudd's speech as it was being broadcast live, it seems he has regrettably failed this important litmus test.
Rudd presented a number of charts, duly prepared no doubt by Treasury staff, extolling the government's supposed economic policy achievements.
These charts provided international comparisons of recent cumulative economic growth, government expenditures, net debt, budget balance, and the unemployment rate, showing Australia's favourable position against a number of underperforming OECD economies.
The political imperative regarding economic statistics is always to present oneself in the best possible light, but one could dare well say that comparing Australia against bankrupted European nations, with little hope to achieve sufficient growth to absorb the worrying large numbers of unemployed, is not a very difficult hurdle to jump.
Comparisons of economic and budgetary statistics between Australia and Europe (which comprises the bulk of OECD members) also conditions the Australian public to complacently assume, or perhaps even embrace, low expectations about economic performance.
Most Australians do not actively plan to relocate to another country, and so the more relevant statistical collections concern movements in Australia's own economic and budget aggregates over time.
In all fairness there are no prizes for guessing as to why Rudd chose not to present bar or line graphs of recent changes in Australian economic conditions, because most of these are unflattering to the government he leads.
Cumulative real GDP growth from the first full year of the Rudd government in 2008-09 to 2011-12 was 8.1 per cent, compared with 48.4 per cent over the life of the Howard government from 1996-97 to 2007-08.
However this statistic is not terribly meaningful given the variations in political longevity of the two governments, and so a better option would be to compare the average annual growth rates of real GDP under the two governments.
According to the ABS data, real growth under the current government stood at an average annual rate of 2.6 per cent, compared with 3.7 per cent under Howard.
In terms of government spending, the budget papers released in May this year indicate that federal general government payments as a share of GDP averaged 25.3 per cent under the Rudd-Gillard government, and 24.1 per cent under the Howard government.
At no time has general government spending under the current government been below 24 per cent in a given year, compared with five occasions under the previous government.
The net debt-to-GDP ratio under the Rudd and Gillard governments has averaged 4.5 per cent of GDP from 2008-09 to 2011-12, which is lower than the 5.2 per cent over the life of its predecessor.
Even so, the use of averaging masks the substantial decline in net debt under Howard from 17.3 per cent of GDP in 1996-97 to minus 3.8 per cent in 2007-08, a trend which conservative politicians can justifiably laud as a policy achievement.
Reflecting this government's inability to attain budgetary balance, Australia has incurred budget deficits averaging 3.2 per cent since 2008-09, which compares most unfavourably against the average budget surplus of 0.9 per cent from 1996-97 to 2007-08.
While the unemployment rate is subject to significant monthly variations, the trend increase in the unemployment rate, from 4.7 per cent in December 2008 to 5.2 per cent in June 2012 and up again to 5.7 per cent last month, under the Rudd-Gillard government is of concern.
By contrast, under the Howard government the trend unemployment rate fell from 8.5 per cent to 4.5 per cent as continuously strong economic growth saw more job opportunities materialise.
In his speech, Kevin Rudd raised the dreaded spectre of austerity under a Tony Abbott-led Coalition government, making the claim that Britain's economic performance has struggled under the weight of austerity programs initiated there.
It is fair to say that the term ''austerity'' has been elevated into something of a fashionable scare-word by reform-adverse politicians, designed to dissuade the public against supporting necessary measures needed to attain enhanced economic outcomes.
Specifically, if austerity is meant to depict a set of policies to facilitate the enlargement of the private sector — including reductions in government expenditure, lower taxes and deregulation — then the actual experience of Britain and Europe largely contradicts this austerity program.
As French economist Veronique de Rugy has outlined in systematic research of the European fiscal environment, there is scant evidence of absolute reductions in government spending undertaken in recent years.
If anything, there is a growing catalogue of anti-growth taxation and regulatory policies that are stifling the very opportunities that Europe desperately needs to provide meaningful jobs for its restless citizens.
The Australian Government has embraced the failed European economic agenda, evidenced by its unwillingness to reduce its aggregate spending, its preparedness to inflict new energy, resources and other taxes upon business, and heaping new regulations upon entrepreneurs.
The National Press Club address reveals a worrying sign that Kevin Rudd has failed to heed the lessons of the economic policy failings under his first stint at the prime ministership.
ADVERTISEMENT
No comments:
Post a Comment