"Sydney, 17 February, 2003: The Australian Bankers’ Association says that Australian businesses borrowing money from overseas will on average face lower interest charges because Australia’s credit rating has improved to AAA from AA+."

In 2007 there was no net government debt, and government bonds were in short supply, and the AAA rating was a moot point, but I can find nothing that indicates that the rating was anything but gold plated.

While the overall tax rates have dropped, the spending has increased to the highest level ever, as has the public service.

Inflation reduced under Keating from recession, and under Rudd / Gillard from the increase of the dollar, cheap imports, and higher unemployment.

The stimulus was supposed to deliver infrastructure, where they gave the money to the private schools they build exactly what they needed at an average half the cost of what the public schools got, and much of the time the public didn't get what they needed. There was a genuine chance to provide needed infrastructure, and it was wasted. There are no examples of this Labor government getting anywhere near the outcomes for money spent that they claimed they would.

If the sole purpose was to Pss the money against the wall, then they get a big tick.

Good morning Mr M,

Triple A ratings. There are three big credit rating agencies: Standard and Poor, Moody and Fitch. S&P gave Australia AAA in 2003. Fitch gave Australia AAA only in November – first time ever all three agencies have awarded Australia the top rating.

http://www.abc.net.au/news/2011-11-29/fitch-rating-australia/3701752

Tax and spending. Yes, these have increased in absolute dollar terms as population, size of the economy and wealth have grown. So we can’t compare dollars. We must compare percentages of GDP. When we do this, Labor emerges with the better outcomes.

School buildings. Yes, many cost more than if normal tendering and vetting procedures had applied. But this would have delayed the process substantially. The whole point was to get the workforce busy immediately and accept that a premium will be paid. Yes, outlays would have been lower had time not been of the essence. But it was.

As Prof Stiglitz said, “Rudd’s stimulus worked: Australia had the shortest and shallowest of recessions of the advanced industrial countries. But, ironically, attention has focused on the fact that some of the investment money was not spent as well as it might have been, and on the fiscal deficit that the downturn and the government’s response created.

“Of course, we should strive to ensure that money is spent as productively as possible, but … efficiency requires equating the marginal cost associated with allocation with the marginal benefits. In a nutshell: it is wasteful to spend too much money preventing waste.”

The outcome was: recession confined to just one quarter, continuing high employment and the world’s best economic growth. Plus many new buildings as a bonus.

Now, for examples of money p*ssed against the wall, look at the gambling losses by Costello and Howard between 1998 and 2002:

http://www.newsweekly.com.au/articles/2002mar23_curr.html

As an exercise, Mr M, what do economists regard as the ten most critical reforms to the Australian economy in the last 40 years? Who introduced them?

Was trading with Communist China a good idea? Do you recall which party proposed this – and which parties condemned it as unpatriotic, a betrayal and treason?

Cheers, AA

AA,

Perhaps you could point out any worthwhile economic reforms by the Rudd Labor government?

Stimulus involves putting money into the economy, and it does not in itself require huge economic acumen. Getting long term value for the money requires sound economic management which Labor obviously lacks. For example Co investment in private sector infrastructure that was already planned would have provided valuable infrastructure that would have generated long term employment and revenue compared the the poorly utilised school halls.

That stimulus was required in not in question, neither is whether it could have been done better with less.

Bonjour Mr M,

Mr Rudd will be primarily remembered here in Europe for the formal apology to the stolen generations. And for bringing Australia back into the international community after some years isolated as George W Bush’s sidekick.

Signing Kyoto and the other global accords – and then being rewarded with a seat at the G20 table – got significant coverage here in France.

His masterstroke, of course, was to tell the Government of Communist China they had to improve their performance in human rights – in language they understand. That was an absolute coup for Australia. Huge kudos.

In economics he is regarded as leading the only government in the Western world that averted a technical recession via its fiscal stimulus packages in 2009/10. Most economists now say Australia alone got the timing, the direction and the quantum exactly right. All other nations tried something, but only Australia acted fast enough with enough cash spent on the right things. The insulation scheme is considered sound because of its benefits for the next 150 to 200 years.

Rodney Tiffin explains the economics pretty well here:

http://inside.org.au/a-mess-a-shambles-a-disaster/

Rudd also got started with job training – another area neglected over the previous decade, which is why Australia has so many foreign workers while hundreds of thousands of Aussies remain unemployed.

Apart from these, the main structural adjustment is the mining tax. Whether this is a great initiative or just a blindingly obvious move long overdue is a matter of opinion. Certainly the Government of China recognised that Chinese companies were buying Aussie minerals at a pittance and making vast superprofits – so whacked on a tax to ensure the windfall gains were spread across China.

It was always somewhat bizarre that Australia hadn’t done the same.

You can probably add the income tax changes, the extension of superannuation as significant reforms. Whether the NBN turns out to be as asset or a liability remains to be seen.

If the view of Australia from France is of interest, Mr M, here are some perspectives from the last election:

http://www.crikey.com.au/2010/08/24/letter-from-france-captivated-by-le-duel-entre-deux-personnalites/

Cheers, AA

Alan, thanks for Professor Tiffen's article - excellent!

SM those school halls as you put it, are actually stadiums, library's, open sheltered space. Whatever the school wanted, they got. So to criticize school halls, is to criticize, the school committee. Alan austin has got your measure mate.