AA,

The multifactor productivity rose sharply from 1996 to 2004, and even after the drops the productivity in 2007 was much higher than when Howard was elected in 1996.

Labors productivity in 2013 is much lower that when Dudd was elected in 2007.

How do you explain the complete incompetence of the government to predict declining future economic trends when most other economists saw the terms of trade deteriorating, and labor kept predicting business as usual?

Hi Alan,

Is your disagreement with “recent” rather than “productivity decline”?. As with “growth”, the issue appears semantic. If productivity has been trending downwards since 2005 then it has declined both recently and in the medium term.

Your assertion was that Australia’s economy “now” is better than “any other economy anywhere ever.” Not just in 2009.

Singapore took a steeper hit from the GFC that Australia – as you would expect with a small open economy. But its recovery was stronger, and its current economic indicators are better.

Let’s look at where you say Australia outperforms Singapore.

It is unusual, to put it mildly, to maintaining high interest rates are better than low. This makes our economic management look weak compared to international superstars like Afghanistan and Ghana.
http://www.tradingeconomics.com/country-list/interest-rate

It is also at odds with comments from Labor ministers:
http://news.theage.com.au/breaking-news-national/oppn-out-of-touch-on-interest-rates-wong-20130806-2rasd.html

On retail sales – the latest ABS data show that Australia’s retail sales growth at its lowest since 1962; hardly “best ever, anywhere”. Australia’s retail sales rose by 2.6% in the year to June. Singapore’s rose by 3.2% in the year to May (both latest data).

http://www.theaustralian.com.au/business/economics/shopping-strike-worst-in-50-years/story-e6frg926-1226107803079

http://www.singstat.gov.sg/news/press_releases/mrsmay2013.pdf

On unemployment – During the GFC Singapore’s unemployment rate rose from 1.7% in 2008 to peak at 3.3% in 2009; since then it has fallen to 2.1%. Australia’s rate rose from 4% in 2008 and peaked at 5.9% in 2009; it is currently 5.7% and rising. How you can claim Australia’s 5-year unemployment record is better than Singapore’s is beyond me.
http://www.tradingeconomics.com/singapore/unemployment-rate

Re GDP per capita. The convention for international comparisons is to use GDP at PPP, to correct for variations in exchange rates. Your economic welfare is not measured by how many US dollars your income will buy, but how many goods and services it will buy.

Re labour costs: it’s pretty hard to compare, as the Singapore data are not seasonally adjusted or smoothed, whereas the Australia data are trend. But yes, it looks like Singapore’s labour costs are trending upwards while Australia’s are trending down.

Congratulations, you have found an economic indicator which looks better in Australia than Singapore.

Hi Rhian,

Will be back later to respond. Busy elsewhere at the moment.

Meanwhile, two brief questions:

1. Can you please verify the current debt to GDP figures for Australia and Singapore.

Are they 20.7% and 97.9% respectively?

What does this indicate about relative economic performance?

Do you regard Australia's current debt to GDP as an indicator of managerial failure? If so, should Singapore be assessed as an even greater failure - by a factor of 4.7?

2. Is there a country in the OECD which you believe, like Singapore, to have better economic performance than Australia?

More later ...

Cheers,

AA

Alan,

I gather that you must hate being shown up for posting lies.

Still can't answer why your measure of productivity was higher under Howard than Rudd/Gillard. Its your thread, you shouldn't hide.

I love the way you keep on reposting the same dross no matter how often it is disproven.

Alan
The data you cite are for gross debt. As discussed above, net debt is the most commonly used measure of fiscal performance as it also reflects financial assets. If you owe $10,000 on your credit card but have $20,000 in your bank account, your financial position is quite different to if you owe $10,000 on your credit card and have a $20,000 overdraft.

Singapore has no net debt:

http://www.gov.sg/government/web/content/govsg/classic/factually/Factually-310812-IsitfiscallysustainableforSingaporetohavesuchahighlevelofdebt

Singapore’s gross debt is also unusual in that it mostly comprises borrowings to manage the country’s central provident fund – it is easily covered by financial assets. Singapore’s government has run a surplus for all but one of the past 20+ years, and in that time it has not needed to borrow to finance a general government deficit.

http://www.indexmundi.com/singapore/public_debt.html

So yes, Singapore’s fiscal management has been far superior to Australia’s.

You ask “Is there a country in the OECD which you believe, like Singapore, to have better economic performance than Australia?” Probably. But I don’t need to find them to disprove your claims that Australia’s economy is the “best by far in the developed world during the Rudd/Gillard/GFC period”, and that “Australia’s economy is now healthier than any other economy anywhere ever.” You’re trying to shift the goalposts again.

Earlier, you asked, “Does the level of savings indicate good or bad economic management, Rhian?” It is not necessarily an indicator of good management, but it is a positive indicator. Countries with high savings ratios can support high levels of productive investment without the need to borrow large amounts overseas. While Australia’s investment levels are quite good, its savings are low, so it needs to borrow. Hence our persistent current account deficits, and the accumulation of foreign debt they produce. So I think saving is a legitimate consideration when evaluating economic "health".

Hi Rhian,

Our disagreements re productivity may be semantic. But this graph seems emphatic:

http://www.tradingeconomics.com/australia/productivity

A stunning rise beginning nine quarters ago.

Then your multifactor chart, A2421362J, shows a steady decline from 2004 until June 2011 and then a shift upwards to June 2012, where the data ends. This is quite consistent with the labour productivity chart.

So the evidence suggests that since June 2011 there has been a strong improvement.

Surely the period between June 2011 and now is ‘recent’ – rather than the period 2004 to 2011. No?

Re: “Singapore took a steeper hit from the GFC than Australia – as you would expect with a small open economy. But its recovery was stronger, and its current economic indicators are better.”

Don’t think so, Rhian. Recovery has been patchy. Nine negative growth quarters to Australia’s two.

Re: “It is unusual, to put it mildly, to maintaining high interest rates are better than low.”

Correct. Low is better than high. But optimum is better than too low.

So what is optimum? Well, a balance between cost of borrowing – to purchase a house or car, or build an enterprise – on the one hand and a return on savings for retirees and others.

That optimum would seem to be between 2.0% and 5.0% - where Australia [with Poland, Mexico and New Zealand only] has been for the last five years. No?

So Senator Wong’s comments seem reasonable.

Re: “ABS data show Australia’s retail sales growth at its lowest since 1962; hardly “best ever, anywhere”. Australia’s retail sales rose by 2.6% in the year to June.”

Which ABS series, Rhian?

Tradingeconomics shows 2.1% for the year to June 2013. And 4.1% to June 2012. Both higher than several recent years. No?

Yes, Singapore’s rose by 3.2% in the year to May this year. But -0.9% to June 2012.

Earlier data is limited, so this discussion may be inconclusive until we see the June figures.

I wouldn’t take any notice of that piece in The Australian, Rhian. Two years out of date. And was not even true then.

Cheers,

AA