Our Economy no longer the envy of the World
Just in case anyone hasn’t noticed, our economy, the former darling of the OECD, is fast becoming a basket case. We are now far from the post-GFC days (2008-2013) when we were the envy of the 34 member OECD world. Back then we avoided a recession because our then Labor government acted quickly and prudently to stimulate the economy.
The reality today is that we have slipped down the list in nearly every measurable OECD category since. In other words, the coalition management of our economy has been an utter failure.
Thanks to Alan Austin at Independent Australia, we can now compare our position from election time 2013 to the March quarter of 2015 with all other OECD members on the vital statistics of unemployment, youth unemployment, deficit, debt, terms of trade, interest rates and competitiveness.
The figures are a damning indictment of the Abbott government made more so because they were elected by a majority of Australian voters who believed they were the better economic managers. Many still believe this despite all the evidence to the contrary.
Joe Hockey said recently that anyone who talks down the Australian economy is a clown. This, from a man who as shadow treasurer, talked it down relentlessly. But unfortunately for Joe and the rest of us, talking the economy down today, is simply stating the facts.
Unemployment today at 6% is worse than it was when Labor were defeated in 2013 (5.7), but when compared to the OECD countries, we have now slipped from 8th overall, to 13th.
Similarly, youth unemployment has worsened from 12.65% to 13.6%, while the OECD average has improved from 21.61% to 19.38%
On budget deficits, a key election issue and where some wild promises were made by both Tony Abbott and Joe Hockey, we have gone from 1.2% of GDP to 3.1% in just two years. In so doing, we have fallen from 10th in 2013 to 22nd today. The average OECD rate is 2.78% of GDP.
In 2013 our Gross Debt to GDP was 28.6%. We were ranked fourth lowest out of 34. Today it is 34.5% and we are ranked 9th highest. For those who constantly harp on our so-called debt problem, how’s that working for you now?
Our bond issuance has increased by $100 billion in just two years. This, when we have been told that the adults are back in charge.
Our terms of trade which is reflected in the difference between the dollar value of our exports and imports are looking decidedly frightening. In 2013 we ranked in line with the average at 98.3 index points. In March 2015 that had dropped to 85.7 points.
In the meantime, the OECD average has increased from 98.81 to 101.67 index points. Our decline was the worst of the 26 nations that record this indicator.
Finally, when interest rates fell to 2.5% in 2013, Joe Hockey said, “If interest rates come down today, it is because the economy is struggling, not because it’s doing well.” They have since fallen to 2.0% well below the OECD optimum band of 2.75%-4.75%. By any consistent measure, Joe Hockey has failed abysmally and should resign.
Little wonder the Abbott government is expending so much energy trying to put the fear of terrorism front and centre. On global competitiveness, we have slipped from 20th in 2013 to 22nd in 2015.
Even in our own region we sit 7th in the top 10. We fail to make the top ten in Higher education, Infrastructure and Innovation. These latest figures are evidence of the Abbott government’s failures for all to see.
Trying to deflect attention from the reality of their economic mismanagement might work for some but it will come back to bite them eventually, despite the MSM’s reluctance to focus on it.
What the MSM doesn’t seem to realise is that the impact of these changes is first felt by those who were bamboozled by the Coalition’s pre-election rhetoric of debt and deficit.
They should know by now they have been played for suckers.
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‘onya John. A damn good article.
Discerning, well researched dissertation, on the ills of the country.
The cure is.?
I get the awful sinking feeling that no one has their hand on the economic tiller, because neither Abbott or Hockey would know an economy, if was a snake and jumped up to bite them. As you say Mark, who us to to first acknowledge it and do something about it. The crazy policies, if that’s what they are supposed to be, in the renewable energy area, are just adding to uncertainty and confusion. I am afraid, very afraid.
So in relation to Global Warming/pollution – it is a case of the LNP saying there is no need to be spend on development so as to be prepared for the bad things expected to happen, but in relation to Terrorism it becomes the direct opposite, in that we must spend to develop systems to seek out all potential negative eventualities no matter the probability.
I blame the gay, halal, unemployed wind farms…
The Abbott regime has dutifully implemented the IPA’s action plan, as they were paid to do, and it has been a crock of effluent. The scary part is that the ALP is currently under the control of the money loving right faction and desperately want their turn to implement the same IPA action plan (but a bit more competently).
If the ALP doesn’t change course following their national conference in 2 weeks, then Australia will be crashing onto the rocks and will remain there for many more years until a rational political alternative can be accepted by the electorate. Do we need economic collapse and massive unemployment like Greece before the electorate can see beyond the totally corrupt and partisan mass media?
What a shambles this ruling rabble are going to leave us with… they are incompetent ideologues and a disgrace.
Iam tipping that we will lose our AAA rating in the near future,This was achieved for the first time by the Labor party. When this occurrence takes place Abbott Hockey Corman and co will not be able to deny this fact or blame the Labor party for the financial mess that they have got us into I believe that the so called Adults are really the Juveniles when it comes to financial management.
Actually Mars08 is correct, it really is those gay, halal, unemployed wind farms that brought us to this!
I’m off to Putin’s straight, traditional, hard working oil industry for a job so I can proudly stride bare chested across the oily and smelly Siberian tundra with a fist full of Roubles.
Thank you John for yet another well written article. Thinking everything is going pear shaped is one thing – seeing the stark reality in your figures is horrifying. I fear where Australia is heading.
Keep up the great work AIMN !!
John Kelly for Treasurer!
Oh wait is that libellous? Will Joe think that means I know that he’s not very good?
Treasurer for sale, push, pah, you couldn’t give him away!
The disturbing thing is that Abbott’s media management team have taken the economy off the agenda whilst Abbott has been sent out to play scare tactics on terrorism, tilt at wind mills and conduct a sham war against the ABC.
There are rumblings again with Liberal Party circles about the way this man running of the rails.
@Andreas Bimba… funny, odd…. but after thinking about your comment I realised that, in a way, I AM right!!!
If it wasn’t for the distractions provided by the gay, halal, unemployed wind farms… this sleazy government would have a much harder time implementing it’s agenda.
On budget deficits, a key election issue and where some wild promises were made by both Tony Abbott and Joe Hockey, we have gone from 1.2% of GDP to 3.1% in just two years.
How can this be true? The results for Hockeys first budget do not come out until September this year.
Todays’ Morgan says it all: Business confidence the lowest for 12 months: http://roymorganresearch.cmail1.com/t/j-l-hliudut-xutluvkl-o/
Neil, the figures are for the March quarter 2015. That’s really only 18 months. I was being generous, but you have exposed the situation as much worse.
Pingback: Just in case anyone hasn’t noticed, our economy, the former darling of the OECD, is fast becoming a basket case. We are now far from the post-GFC days (2008-2013) when we were the envy of the 34 member OECD world. Back then we avoided a recession becaus
Neil, the figures are for the March quarter 2015.
My understanding is that the results for Hockeys first budget (May 2014) will not be known until September 2015. All figures until then are projections/estimates.
Furthermore each quarter has different revenues/expenditures. Some quarters have high revenue and some quarters have high expenditures.
The economic numbers got much worse under Rudd/Gillard. I guess you will say because of the GFC. The economic numbers have stabilised under Abbott.
Neil, I think your understanding is wrong.
My understanding is that final budget outcomes are released September after the end of the budget year. So results for Hockeys May 2014 budget will be released in September 2015. Everything else is speculation/projections.
The Final Budget Outcome (FBO) encompasses Australian Government general government sector fiscal outcomes for the financial year and is based on external reporting standards. The Charter of Budget Honesty Act 1998 requires that a Final Budget Outcome be released no later than three months after the end of the relevant financial year. The financial statements in the Final Budget Outcome are similar to those in the budget but provide actual outcomes rather than estimates.
By the way i thought i was banned from posting.
Neil, despite your claims that you were, you were never banned. You were placed in moderation (for obvious reasons).
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Iam tipping that we will lose our AAA rating in the near future,
I think you are right. But the only way we can stop losing it is to run surplus budgets. And only the Coalition can do that.
Then why aren’t they doing it, Neil?
But I disagree with your theory anyway. We DON’T need a surplus.
This is what happens when economic and political ideology meets physical reality and it is global. The era of economic growth is over folks and our politicians are in denial. So long as they continue their absurd pursuit, the worse things will continue to get.
Posted something which sank without a trace. Testing, testing…..
Nothing caught in spam, Royce.
But we have risen up on the international corruption ladder.
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Hi John, “The Australian Moment” by George Megalogenis – http://www.amazon.com.au/The-Australian-Moment-George-Megalogenis-ebook/dp/B007FVVEOS – provides a great insight into how we got here. We owe some gratitude to both sides of politics that we had an economy (and community) capable of coping so well with the global financial crisis. Similarly, it is regrettably both sides of politics that have brought us to this point where we are desperately in need of REAL political leadership or else we will very quickly slide from being the envy of the world a few years ago to being its laughing stock – a country that has dealt extremely well with adversity but has had no idea how to handle / make the most of success. Sadly, as Waleed Aly pointed out through a useful sporting analogy in a recent article, – http://www.theage.com.au/comment/politics-the-ugly-game-where-the-melee-rules-20150723-giijo4 – there’s not much hope on the horizon!