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Who are the best managers of the economy: Labor or the Coalition?

The myth created by the Coalition as long back as I care to remember and perpetuated for many years since is nothing more or nothing less, a myth.

Of course, those of a conservative bent wont have a word of it. They simply insist that the myth has God’s word of truth attached to it.

This became apparent from the comments I received on a few debating sites that I post on (yes, I admit they are a waste of time) more often than I should.

So in the interest of finding the truth I typed the heading of this piece into Mr. Google.

Then I listed the title of each piece with the author’s name and a selected comment from the article. Most importantly, I included a link to each article. Any comments by me are in italics.

In this piece l don’t offer a view, instead l have, with the aid of Google, consulted with many experts including financial analysts, journalists, economic journalists, economists, academics and others. Their views come from both sides of the political divide and from different times in our economic history.

Out of Liberal and Labor, the better economic manager is …“, Mark Crosby:

Australia has been fortunate to have had a well-managed economy over much of the past 40 years, and prime ministers and treasurers on both sides of politics who have been equally up to the job and responsible for our relatively good outcomes.

Experts agree: Labor best economic managers“, Alan Austin:

THE COLD, hard facts show Australia’s economy in April 2009 was the world’s best. Observers worldwide have affirmed this. In 2016, IA quoted 14 authorities hailing Australia’s extraordinary success in managing the global financial crisis.

The myth that the Liberals are better economic managers?“, John Menadue:

The Coalition is handicapped and hidebound by an out-dated ideology about markets and private enterprise. The tide has turned in the world that now sees the failures of the market system. The Coalition has failed to catch up. That is why we are seeing the failure of the Liberal Party in economic and business management. Its ideology has passed its use-by date.

Labor v Liberal: who best runs the Australian economy?“, Stephen Koukoulas:

No doubt buoyed by polling that consistently shows the Liberal Party to be a better economic manager than Labor, the Coalition will go hard on the economy as it strives to turn the polls.

All this prompts the obvious question – just how valid is the claim that the Liberal Party is a superior economic manager to Labor?”

On both measures, the level of economic growth and that growth relative to the US, Labor is a better performer than the Coalition.

“Labor or Liberal … which one is the better money manager?”, Annika Boudewijn:

Most people think the Liberals are better financial managers, but Dr. Frans Mols, lecturer Political Sciences at the University of Queensland doesn’t agree.

Labor Does Not Know How to Manage Money“, the Liberal Party:

The more Labor spends the more they tax. The more they tax the more they slow the economy down, which hurts every single Australian.

Exploding the myth of the Coalition as a sound economic manager“, by Betty Con Walker and Bob Walker:

But what of the Coalition’s record? It has not recorded a surplus in six years and its forecast of a surplus in 2020, if it is achieved, will likely be the product of rising tax revenue and lower spending on services such as the NDIS. Its cumulative deficits so far have been $139.2 billion. So the Coalition not only failed to “repair the budget” but also recorded almost $140 billion of deficits – just $14 billion less than Labor over a similar period – but without a GFC and with tax receipts helped by strong commodity prices.

Better economic managers? You gotta be shitting me“, by Kaye Lee:

These people [the current government] are not “good economic managers” just because they happened to be in government during a boom time decades ago when my pet rabbit could have delivered a surplus.

Australia’s growing debt explodes the myth that Libs are better economic managers“, by Michael West:

With record revenues in boom times, Peter Costello introduced measures which have left a very serious and damaging legacy. Continuing chronic budget deficits are very much due to Peter Costello. The Howard and Costello government wasted the buoyant revenues of the mining boom.

Who are the better economic managers?” by Alan Austin:

This compilation should extinguish any lingering doubt about the Coalition’s incompetence in managing Australia’s economy for all. They have succeeded only in allowing big business to generate huge profits. On every other critical indicator, with the exception of annual GDP growth, they have failed to continue Labor’s gradual progress and global leadership.

It is fair to conclude that Australia has exchanged one of the best economic management teams in the world for one of the worst.

LNP the better money manager, voters say“, by Michael McKenna:

A Newspoll of six marginal electorates last week found that voters overwhelmingly backed the economic credentials of the state opposition over the Palaszczuk government. (Queensland only).

The myth of Coalition economic management“, by Tim Dunlop:

Let’s instead start telling the truth about how bad they actually are, and let’s begin by not passively accepting “truisms” that long ago ceased to be true. Let’s actively challenge this damaging, childish myth about the Coalition’s superior economic credentials.

Liberals are not better economic managers“, by Josh Gordon:

Far from handling a finely tuned racecar, managing the state economy is more like driving a delivery truck. It is mostly about a decent mix of capital and recurrent spending commitments without too many financial cock-ups along the way. (Refers to the Victorian economy).

ALP best manager of money, history shows“, by George Megalogenis:

Mr Swan has struggled to sell Labor’s achievements, despite Australia being the only rich nation still standing after the GFC.

The Morrison election: What we know now“, by Richard Dennis.

 In the six years after then opposition leader Tony Abbott declared we had a “budget emergency”, the Coalition handed down six budget deficits that added a combined $201 billion to our public debt. But no one other than Labor seemed to notice. After decades of allegedly neoliberal politicians telling low-income earners about the need to tighten their belts, the election campaign saw the Coalition announce an orgy of debt-funded tax cuts. And it won. Labor was punished for its conservatism, not its class war.

Dennis’s article, by the way, is the best post mortem on the election I have read to date.

“Who is Better at Managing the Australian Economy: Labor or the Coalition?”, by P.N. (Raja) Junankar

These results confirm that a different counterfactual gives a different result.

Earlier in this paper we mentioned that because the ALP Government came into office in the middle of a recession and had to cope with another global recession in the early nineties, managing the economy was, for it, a much more difficult task. The Coalition Government came into power when the economy was growing rapidly and also benefited from all the structural changes introduced by the ALP (e.g. trade liberalisation, increased expenditure on education, deregulation of the economy and so on). Hence, if the growth rate under the Coalition has been higher than under the ALP, this does not mean that Coalition policies are responsible.

“Do you think the myth liberals are better economic managers will ever die”, by Tigharcebogan (no link):

Frankly as an economistic just sick of seeing this touted about constantly.

One just has to look at the debt being 157 billion when labor lost office, to 654 billion it’s at now to know it’s simply not true.

Stagnant wages.

Gross under spending on infrastructure.

Quarterly growth IA constantly below expectations a housing debt bubble but this is not really the governments issue other than not enough regulation by Government at the time. Labor has shown it was much more fiscally responsible in activating needed policy instead of pork barrels.

Conclusion

So having hit page 4 on Google’s search engine there is nothing more on this subject. My search has reached its inevitable conclusion. However, if the reader should care to hit the links on this subject I’m sure there is a wealth of information to be devoured.

To all my friends on the debating sites who so readily criticise me on this subject, I have provided you with all you need to further your enlightenment. Bless you one and all.

My thought for the day

I always used to say to my kids. Think beyond the answer. There’s sure to be another one lurking there somewhere.

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10 comments

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  1. Alpo

    Without control of the mainstream media the stupid myth will be perpetuated.

    If anything, what the last federal election demonstrated is that the internet is not as powerful as we thought and in the state where the federal election has been decided since the Howard decade: Queensland, the MSM reign supreme.

    Blaming Labor is nonsense, they did an excellent job under the circumstances and even enjoyed ground work support from activists such as GetUp! and the ACTU…. Result? They lost!… Democracy in this country is in far more troubles than anyone thought.

    The Liberals are hoping for a Civil War within the Progressive camp, to ensure that they will also win the next election even if a big, fag GFC-2 strikes the world… We must not work to help the Liberals!

    Oh, and those in the left who think that it’s time for the Greens to replace Labor, they are totally and deludedly mad, and their delusion will only play in favour of entrenching the Liberals as the party of government until the end of time.

  2. Kaye Lee

    The current debt figure quoted by Tigharcebogan isn’t correct

    Gross debt is currently 544.1 billion
    Net debt at end of May was 375.6 billion

    but when checking it I noticed something interesting…

    In the coming week, the government is issuing new AGS to the value of $2.65 billion.

    https://www.aofm.gov.au/

  3. Jack Cade

    We have to consider that the appalling Murdoch press – which we blame for fostering the lying snd mendacious RW politicians and suppressing the brave progressives – might JUST be the product of major Australian thought and not its guiding hand. That we are NOT the people we think we are, but that Murdoch reflects us and not the other way round.
    It is beyond belief that we elected s bunch of people who believed that Tony Abbott was a suitable person to be a prime minister and that – after an interregnum with a polished vacuous toff – elected a bible-bashing lout who was sacked from his last two jobs for reasons we are not allowed to know, one of which was by a Liberal state government, and who manipulated the figures in the branches to get nominated in the first place.
    We are not a sophisticated society. Or even a very humane one. Not any more.

  4. Denis Hay

    I would suggest that neither Labor or the LNP manage our economy well. Labor, LNP and the Greens all subscribe to the myth of neoliberalism in varying degrees. They all talk about budget surpluses as something desirable to achieve.

    A budget surplus means the Federal Government takes money out of the system via tax and cutting public funding to schools, hospitals, education etc. A budget surplus equals austerity measures.

    The Federal Government budget is nothing like a household budget. Here are some links that explain this:

    https://theconversation.com/why-the-federal-budget-is-not-like-a-household-budget-35498

    https://theconversation.com/explainer-what-is-modern-monetary-theory-72095

    https://modernmoney.wordpress.com/

    https://www.youtube.com/channel/UC-47pOkmpLeJlJUXl4cCV-Q

    I would encourage readers to research MMT and come to your conclusion. The Real Democracy Party, in conjunction with RepresentUs, base their economical approach on MMT.

    https://realdemocracyparty.net.au/

    https://representus.com.au/

  5. Alan Luchetti

    “The problem for Australians is that the other side of politics – the Labor Party – is no better. It is a sad state of affairs when a political system is dominated by two neoliberal parties. One of them claims to be progressive but every day just reinforces the conservative myths about the fiscal capacities of government. Welcome to Australia.”

    Bill Mitchell

    http://bilbo.economicoutlook.net/blog/?p=41158

  6. whatever

    In order to discuss politics at a level higher than ‘Celebrity Gossip’ you need at least a B.A. level of education/study. There are many clueless, uneducated zealots out there on Facebook spreading wild gossip that is considered credible by other clueless folks.

  7. Charles Lowe

    John – you’re so waaay tooooo modest! Your dedication, conscientiousness and sheer commitment to discernable and defensible truth is a Hopetoun diamond in Australia’s community crown.

    At least you were prepared to nominate Dr Richard Denniss’ article in ‘The Monthly’ (an overly reader restricted but immensely credible journal) as the best electoral summary your encyclopaedic investigations revealed.

    That came as no surprise to me: Denniss’ perspective – adduced in 2015/16 – was adopted by Labor as its frontline economic strategy for two elections running. And, despite Denniss’ voluntary step-down from the top job of Director of The Australia Institute in preference to becoming TAI’s ‘Chief Economist’, his political insights are, while incomplete, still invaluable – up there with the best I’ve read.

    Those who read this comment who wish to really try and get some sort of handle into what is – and will for months yet be seen to be – a political conundrum of the first order would do very well to invest their one free ‘Monthly’ article per month in reading, filing and then studying Denniss’ article. That’s what I’ll be doing – and posting my reflective conclusions on ‘Politavist’ – please visit and ‘like’ the Page if you do and if you haven’t already: https://www.facebook.com/politavist/?modal=admin_todo_tour.

    In the meantime, give thanks to serendipity that we are so very blessed to have John Lord – this outstanding and entirely credible contributor – within our ranks.

  8. Wam

    Until the last election the BELIEF, not myth, that the liberals were the managers of the economy has been the chief reason for labor’s losses.
    Whitlam managed the economy far better than Ming and his mob but with labor’s reticence to attack the libs on the morning shows or even adequately extol itself anywhere, and the libs having no qualms about lying against labor and for itself, all that remains is the belief in his incompetence no evidence not even Khemlani gets a mention.
    Loved your thought and am saddened by the look of the phone generation when they seek an answer they get that which google or Facebook provides and that is bought with or owned by money so fervently seeking a return. Once the single answer is found it is instantly and exponentially shared.

    Albo has to destroy the belief by making sure his members have a counter argument for the bbqs, bars and camping trips to pass on to supporters.
    Alpo,
    the morning shows will ask the questions of controversy when labor gives it to them(will they, as usual, just hope the autocueists will think of questions without prompts??) that is how the rabbott controlled kochie and karlbaby with the conservative women twitting on the edge. You are spot on with the last point the best slogan scummo has is labor and the greens.
    Beauty Kaye, despite doubling, despite cuts these pricks still have labor’s AAA and are still protected by the belief that the debt is labor’s a la the rabbott attack on Gillard and swan $##&7()($# shorten wasted 6 years when he could have rubbished the lnp for the rabbott’s bullshit.
    ps
    The lnp trotted out a woman on 7 this morning giving redeeming news and I saw McKim the other day that makes dibrankims any one else in the greens?
    pps how is the protect a Christian from freedom report going??

  9. Terence Mills

    Listening to a discussion on deeming and the impact on pensioners this morning on Radio National, one of the guests mentioned welfare in the context of pensions several times and talked on relying on the ‘public purse’ when talking of pensioners.

    Things sure have changed in this country where an old age pension was the right of all and was never considered as welfare.

  10. Harry

    I agree with Denis Hay and Alan Luchetti:

    both Labor and the Coalition are in thrall to neoliberal ideology which holds that budget surpluses are somehow a desirable end rather than using both fiscal and monetary measures to maintain sufficient economic growth so that unemployment is no more than the irreducible minimum of 2-3

    Labor is somewhat more compassionate than the appalling Coalition and more disposed to spend on social programs but other than that it’s been disappointing. I still voted Labor as it’s the best of a bad lot.

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