Alan,

Even using your website, the productivity increase in the first 6 years of Howard was far greater than in the equivalent labor term. This only uses productivity per unit of labor, and ignores the other major factors.

Using the multifactor productivity, I can't find any figures post June 2012, and your estimates are pure conjecture. The result still stands that total productivity under Howard was better than under Labor, as was the economic management.

We’re covering old ground, Alan. The productivity graph only seems “emphatic” because its axis minimum is set to 96. The actual increase since the December 2010 trough is 2.2%pa. Hardly “stunning”. And the increase in MFP in 2011-12 is 0.2% - hardly a “shift”, especially in the light of the 0.8%pa decline in the previous four years. I refer you, again, to my comments about meaninglessness of short-term changes in productivity.

I think we may partly agree that low or high interest rates by themselves do not indicate good or bad economic performance. Rates can and should vary depending on inflation, stage of the economic cycle, the need to borrow, etc. There is no “optimum range”. Interest rates of 2-5% would be way too high in Japan, where inflation has been negative for most of the past year; and way too low in Turkey, where inflation is over 8%.

Given Singapore’s very high savings rate, large current account surplus and budget surpluses, and typically low inflation, it can sustain lower interest rates than Australia, and has for a long time.

On the Australian article on retain sales - I apologise, I linked to the wrong article. I meant to link to this one, published yesterday, which reports that Australia’s 2012-13 retail sales growth was the lowest since 1961-62:

http://www.theaustralian.com.au/national-affairs/rate-cut-likely-as-sales-growth-hits-50-year-low/story-fn59niix-1226691729203

The numbers are correct, but are based on a year-average methodology, not the through-the-year growth reported in the tradingeconomics.com chart. They use the original data from the ABS, series A3348582J in Table 1:

http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/8501.0Jun%202013?OpenDocument

Hi again Rhian,

The question remains: Is there any basis for claiming “recent productivity declines”?

None whatsoever.

The labour productivity graph shows increases since 2010. The MFP chart shows a decline June 2010 to June 2011, then a marginal rise to June 2012.

So from the moment the June 2012 data was released it became clearly false to assert that there has been any deterioration since Q4 2010.

Re: “The actual increase since the December 2010 trough is 2.2%pa. Hardly “stunning”.”

Are you sure, Rhian?

From 99.8 up to 104.8 is 5.0%. If not stunning, this would seem fairly impressive, given the state of the world.

Several nations considered the world’s best-managed have gone backwards in that time, notably Germany, Japan, South Korea, Switzerland and the UK. And Singapore – gone backwards badly.

This is, after all, the worst downturn since the Great Depression – a reality the mendacious media and Opposition ignore – but a reality nonetheless.

Re: “Rates can and should vary depending on inflation, stage of the economic cycle, need to borrow, etc.”

Agree completely.

Would you agree a well-managed economy would have inflation within the band 0 – 3.5%, interest rates within 2.0 – 5.0%, net borrowings below 40% of GDP, unemployment below 6%, budget deficit below 6% of GDP, productivity rising, stable labour costs, GDP growth above 1%, GDP per capita PPP rising, positive savings and equitably shared wealth?

If no, what are your optimums, Rhian?

If yes, how many nations today are within these parameters?

Re: “Given Singapore’s very high savings rate … low inflation, it can sustain lower interest rates than Australia, and has for a long time.”

Sustainable, perhaps. But why save if interest rates are below the inflation rate?

Re the article: “Commsec chief economist Craig James calculated that the annual growth in sales of 2.5 per cent over 2012-13 was weaker than at any time in the past 51 years.”

Really?

According to tradingeconomics, retail sales incresed 2.1% for 2012-23. That’s well above the negative 1.7% in 2010-11, negative 0.9% in 2010-11, and negative 6.1% in 2000-01.

No?

Cheers,

AA

Alan. Yes I’m sure. 5% growth over 9 quarters equates to 2.2% pa
If you need a little help with your maths, try this:
http://www.wikihow.com/Calculate-an-Annual-Percentage-Growth-Rate

I think you, me and any patient soul still following this thread are well aware of what the productivity data show. Let people reach their own conclusions.

And the retail sales data differ because Comsec uses annual averages while your charts show growth through the year. Both are right, they are giving different perspectives on the same data.

On your “would you agree” list, no, I don’t accept these things necessarily signify a “well-managed” economy. As our earlier discussions show, I tend to have less faith than you in government’s capacity to micro-manage the economy. At best, governments capitalise on opportunities and mitigate the risks. But sometimes an external shock or a one-off like changes in the tax rate cause inflation to move suddenly, for example. Would you blame government for the effects of the gulf war on oil, and hence consumer, prices?

Debt is both a legacy issue as a management one. A government inheriting a huge national debt can’t, and shouldn’t, propel it quickly below 40% of GDP. Equally, one inheriting positive fiscal position shouldn’t propel it towards 40% debt, as our current government is doing.

More importantly, though, it looks very much like you’ve cherry picked indicators and targets that look quite favourable for the current government. Why are the current account, household wealth, household debt, housing affordability, retail sales growth, the rate of growth in real per capita GDP, employment growth, and an adequate (as opposed to merely “positive”) savings ratio not on your list? I suspect it is because these do not paint the government in as favourable a light as the indicators you selected.

By the most important factors i.e.

Net federal debt,
Unemployment,
GDP growth rate
GDP growth rate per capita,
Multifactor productivity growth,
Better regulatory environment for small business.

The Howard government was not only better than the Rudd Gillard, but better than Hawke and Keating, and probably the best managed in the world.

Hi Rhian,

Well, I agree with you on almost everything.

Thanks for the rate calculator. Very nifty.

Sorry about missing the pa! But it’s your fault for no space after the 2.2%.

[Just kidding]

Regarding my list of 11 variables, Rhian, that’s certainly not exhaustive. Pretty sure they are the ones most relevant here because they are the ones raised in the speech which is the subject of the article.

I use a master list of 38. You have suggested eight. Of those, all but household debt are on my list.

The ones applied – here and elsewhere – are those most appropriate for the comparisons sought: between nations, between regions, across time, or whatever.

Pretty sure cherry-picking hasn’t been an issue. Definitely try to avoid this.

Re the Australian: “Comsec uses annual averages while your charts show growth through the year. Both are right, they are giving different perspectives ...”

So, using annual averages, how does 2012-13 compare with those earlier years – negative 1.7% in 2010-11, negative 0.9% in 2010-11 and negative 6.1% in 2000-01?

Is it true 2012-13 was weaker than at any time in the past 51 years?

The main problem with that article, however, is completely denying global context. It’s a grave distortion to depict a positive result of 2.6% or 2.1% as anything other than excellent, given the prevailing global conditions.

How many other nations boast such an impressive rise?

In the OECD, only about six have done better. Almost half the OECD has been negative!

Very rare to find any truth in a Murdoch publication, Rhian.

Agree totally on legacy. Absolutely.

So here’s a question for you:

An April opinion piece at OLO by Shadow Foreign Minister Julie Bishop includes this:

“The Howard Government had to find the funds to pay down the $96 billion debt inherited from the Keating Labor government.”

Yes. We know. But how much of that debt did the Hawke/Keating Government inherit from the Fraser Government?

(a) none
(b) about a quarter
(c) about half
(d) about three quarters
(e) almost all

More quiz questions here:

https://newmatilda.com/2013/08/02/say-hello-tony-abbott-and-friends

Cheers,

A