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The Forum > Article Comments > Fact-checking Australia's likely next PM > Comments

Fact-checking Australia's likely next PM : Comments

By Alan Austin, published 29/7/2013

Mr Abbott's address to the Australia-Israel Chamber of Commerce in Melbourne on Monday of last week contained about twenty readily identifiable falsehoods.

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Alan,

Your question "But how much of that debt did the Hawke/Keating Government inherit from the Fraser Government?"

The answer is virtually none of it. It was nearly all Labor generated.

http://barnabyisright.files.wordpress.com/2010/03/myefo_netdebt_800x600.jpg

As for the New Matilda and Independent Australian, we all know how biased, factually incorrect and unscrupulous most of their authors are.
Posted by Shadow Minister, Thursday, 8 August 2013 9:04:57 AM
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Hi Alan
These are retail sales levels and growth going back to 1983. To verify earlier estimates, check the PDFs on the ABS website.

1983-84 ___ $48b __ 8.9%
1984-85 ___ $52b __ 7.3%
1985-86 ___ $58b __ 11.9%
1986-87 ___ $63b __ 8.7%
1987-88 ___ $69b __ 9.1%
1988-89 ___ $76b __ 9.7%
1989-90 ___ $82b __ 8.3%
1990-91 ___ $84b __ 3.1%
1991-92 ___ $90b __ 6.6%
1992-93 ___ $93b __ 3.0%
1993-94 ___ $98b __ 5.2%
1994-95 __ $105b __ 7.4%
1995-96 __ $112b __ 7.3%
1996-97 __ $115b __ 2.7%
1997-98 __ $121b __ 4.5%
1998-99 __ $127b __ 5.5%
1999-00 __ $135b __ 6.5%
2000-01 __ $142b __ 5.0%
2001-02 __ $154b __ 8.5%
2002-03 __ $165b __ 6.7%
2003-04 __ $179b __ 8.8%
2004-05 __ $186b __ 3.9%
2005-06 __ $193b __ 3.8%
2006-07 __ $206b __ 7.0%
2007-08 __ $221b __ 6.9%
2008-09 __ $231b __ 4.6%
2009-10 __ $239b __ 3.7%
2010-11 __ $245b __ 2.6%
2011-12 __ $253b __ 3.1%
2012-13 __ $259b __ 2.5%

The “negative 6.1%” recorded by trading economics for July 2001 is odd. It is clearly due to the 31.9% growth it recorded in the year to July 2000, which is even odder. Neither of these are near ABS estimates for this period. Trading economics may not reflect the ABS’s adjustments for introduction of the GST, which caused retail sales to rise sharply in June 2000 and fall in July 2000. But even the original changes were not of this magnitude. I think trading economics have an error. If you’re a subscriber, maybe contact them for an explanation.

Abbot’s reference to a “recent productivity decline” is quoting from the World Economic Forum’s analysis of Australia’s productivity.

http://shared.liberal.org.au/Share/eBooks/StrongAustralia.pdf p.96

The quotation is from a speech Abbott gave on 2 May 2012. At the time, the most recent multifactor productivity data available was the 2010-11 edition of ABS Cat. 5204.0. This showed Australia’s multifactor productivity decreased by 1.5% in 2010 11 to its lowest level since 2006-07.

Source (same table and ID as above)
http://www.ab s.gov.au/AUSSTATS/ab s@.nsf/DetailsPage/5204.02010-11?OpenDocument
Posted by Rhian, Thursday, 8 August 2013 4:24:32 PM
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Hi Shadow Minister,

It's important we look at actual data, isn't it? Remember, the mainstream media and the Coalition lie routinely, don't they?

And they fabricate dodgy graphs!

The Hawke Government inherited debt at 19.6% of GDP. The Keating Government left office with debt at 20.8%. Taking interest into account - at the steep rates Fraser left us with - shows virtually all debt in 1996 had actually accrued under Fraser. And we know who the world's most disastrous Treasurer was then, don't we?

Regarding other variables:

Net debt:

Rose under Fraser, fluctuated under Hawke/Keating, dropped under Howard, and rose during the Rudd/Gillard/GFC period.

Compared with other nations, Australia was average under Howard and exceptionally strong during the Rudd/Gillard period.

Unemployment rate:

Worsened disastrously under Fraser, improved under Hawke/Keating and Howard and dropped back slightly during the Rudd/Gillard/GFC period.

Compared with others, average under Howard and near world’s best during the Rudd/Gillard/GFC period.

GDP growth:

Poor during the Fraser years, improved during the Hawke/Keating and Howard period but dropped back during the Rudd/Gillard/GFC period.

Comparatively, very ordinary through the Howard years and best by far in the developed world during the Rudd/Gillard/GFC period.

Regulatory environment for small business.

Heritage Foundation rates the Rudd/Gillard period as best in Australia’s history, best in the entire capitalist world [OECD] and third best in the world, behind Hong Kong and Singapore.

On all the following, however, Rudd/Gillard have done way better than Howard – despite the GFC!

1. income – GDP per person
2. GNI income per person
3. interest rates
4. income disparity
5. inflation
6. health care
7. pension levels
8. superannuation
9. personal tax levels
10. company taxes
11. indirect taxes
12. international credit ratings
13. economic freedom
14. personal savings
15. current account
16. foreign exchange reserves
17. value of the currency cf the US$
18. value of the currency cf the euro and the pound
19. productivity
20. quality of life
21. balance of trade current
22. balance of trade history
23. terms of trade
24. 10 year bond rate
25. world ranking on economic management

Cheers,

AA
Posted by Alan Austin, Thursday, 8 August 2013 4:45:21 PM
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Hi Rhian,

Thanks for the retail sales data. Most helpful.

Yes, I suspect the 2000-01 blip related to the introduction of the GST. There was a one-off spike in inflation that year also.

No, not a subscriber to tradingeconomics. But use the site constantly, so maybe should. (And yes, they do have errors sometimes and do respond to queries.)

So would you agree, Rhian, a 2.5% rise [or 2.1% using the other data) is a good result comparatively?

It's in the top third of the OECD, whose average is about 0.6%. Only 0.36 if we take out Chile’s outlier. And negative 0.9% for the Euro Area.

Is it fair then to report this as a problem area where Australia’s performance is worrisome, rather than a global problem where Australia’s performance is relatively sound?

Re: “the most recent multifactor productivity data available was the 2010-11 edition of ABS Cat. 5204.0. This showed Australia’s multifactor productivity decreased by 1.5% in 2010-11 to its lowest level since 2006-07.”

Hmmm. Yes, I see.

So has no-one pointed out to Mr Abbott that that information is now somewhat dated?

Has he been shown the labour productivity data which reveals a substantial, if not stunning, rise since the end of 2010? Has he been shown your multifactor chart, A2421362J, which shows a shift upwards between June 2011 and June 2012?

Here again, Rhian, the dishonesty issue is not just that the statement is factually dubious – on the definition of ‘recent’.

The greater problem is that comparisons are made between periods without acknowledging the impact of the worst global financial crisis since the 1930s.

No?

Cheers,

AA
Posted by Alan Austin, Thursday, 8 August 2013 6:12:48 PM
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Hi Alan
No, I would not agree 2.5% is a good result comparatively. Not only is it the lowest in decades, it is also lower than in Australia even at the height of the GFC. It may be better than in Europe, but we know much of Europe is a basket case.

I don’t regard retail sales as a particularly valuable indicator. It was you who raised them as evidence of Australia’s supposed strong economy. I thought it relevant to point out how weak they are. I’d prefer to use real per capita consumption (a broader measure adjusted for inflation), which is currently declining in Australia.

Re productivity
I have no idea what Abbott’s advisors tell him, but it’s a bit rich for you to castigate him for quoting numbers that were accurate and the most “recent” available at the time he used them.
Posted by Rhian, Thursday, 8 August 2013 7:43:30 PM
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Re the global recession
The GFC peaked in 2009. In Europe and the USA its after-effects are still lingering, but the rest of the world is moving on. We have had nearly four years of global growth since then - about average growth for the world as a whole (about 3½%), and quite strong growth (>5%pa on average) outside the advanced economies. The GFC is no longer an excuse for the current weaknesses of Australia’s economy, if it ever was.

Australia didn’t have a recession. You say this was mainly because of good economic management, I say it was mainly due to other things. But we do agree that there was no recession.

A recession is measured by changes in output, and productivity measures output per unit of input. So, why should we expect Australia’s productivity to behave as if there had been a recession; or congratulate ourselves that our productivity pattern does not look like countries that did? This is to confise the cyclical with the structural.

Abstracting from cyclical swings, Australia has experienced a structural decline in its multifactor productivity. This has caused expressions of concern from (among others) Kevin Rudd, Treasury, the Reserve Bank, the Grattan Institute, and a host of other competent commentators. Just because Abbott says the same thing, doesn’t make it wrong.
Posted by Rhian, Thursday, 8 August 2013 8:37:07 PM
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