There are so many wrong things in the comments supporting Abbott that I have had to be rather selective.

Rhian wrote;
5. “Australia's debt position is better … because we started better”. Abbott is right here, and Alan is misrepresenting the argument. Countries with comparatively low debt before the GFC mostly emerged with relatively low debt.
We did not start better. Howard and Costello continued the idiotic policy of sell common good assets started by Hawke and Keating and while we had less government debt we, the public, owned less assets.

Howard ignored the advice form Reserve Bank Governor, Ian Macfarlane, that financial institution regulation was far too slack. If anyone looks at total debt it was private debt, issued by banks, that was out of control. Public debt used to provide worthwhile infrastructure and services is never a problem when there underemployed resources in the area serviced by a single sovereign currency.

Abraham Lincoln said it well;
"The money power preys on the nation in times of peace, and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes."

Professor Bill Mitchell, in today's blog wrote;
"There is nothing intrinsically important about the monetary system. It is a means to an end – to ensure real outcomes are reached to improve the lives of everyone."

Greetings all,

Intriguing discussion, as always. Thanks.

@Foyle: Agree with most of your observations. Not sure, however, that Scandinavian nations are “more egalitarian, happier and more successful” than Australia. Is this based on recent data?

Definitely way in front of the USA and the Eurozone. Correct there.

@voxUnius: Yes, that’s an interesting piece by Uren and Maher. The response from James O'Neill seems valid.

@imajulianutter: No, not at all, Keith. There are plenty of critiques of the asylum seeker policy. Here and elsewhere.

No, the current administration is not spending and taxing. Mr Bowen’s emphasis now is definitely on cutting spending. Correct?

@spindoc: No, the opposite is true. The article measures Mr Abbott’s statements against objective data – NOT any subjective opinion of falsity. Happy to provide further data if desired.

@Shadow Minister: No, the opposite is true. Please refer here:

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

This shows dramatically that productivity has increased for nine consecutive quarters – from what was already a high base. Australia’s productivity has been the world’s best for two years now.

It is a curious thing that you, along with Mr Abbott and Mr Hockey, persist in saying things which are so easily proven to be completely false. Why is this?

@Atman: No, there's no evidence that the mining boom saved Australia from the GFC. None whatsoever.

It didn’t hurt. But doesn’t explain Australia rocketing from 12th-ranked economy when Labor took over in 2007 to the world’s best-managed economy in 2009/10. Many other countries export minerals to China. These include the USA, South Korea, New Zealand, Russia and Japan. None of these was spared the ravages of the GFC.

Brazil also had strong iron ore exports but found no protection. It went into recession in 2009 along with other ore exporters and has barely recovered since.

Similarly with other minerals. Russia, USA and South Africa all export quantities of gold, as does Australia. Of these, only Australia escaped recession.

Strong commodity prices? Always good to have. But other exporters enjoyed the same profit windfalls, without the same outcome, didn't they?

Looking forward to continuing the conversation.

Cheers,

AA

One of the main reasons that the public have fallen prey to so many Coalition and pro-Coalition media lies about the economy is because private debt - as opposed to public debt - is out of control. All the cited global fiscal statistics that 'prove' the health of the Australian economy go nowhere when people are justifiably worried that they cannot sustain their private debt levels.

While our public debt is at a very manageable 21% of GDP, indeed best in the world, our private debt stands at 105% of GDP. The only country with a higher household debt is Ireland at 124%. The UK (98%), US (87%) and Canada (91%) come close, but we compare very unfavourably with Japan (67%), France (48%), Sweden (60%) and Italy (45%).

Countries that experienced massive housing booms in the 1990s and 2000s are now understandably crippled with massive private debt. So too, the more countries privatized their public services, the more people had to borrow to finance exponential increases in health, education, insurance, transport and general household expenses. Cheap clothing from China can only go so far in offsetting a $2500 monthly mortgage payment and a $400 monthly family health insurance premium.

In Australia, both sides of politics have created this crippling user-pays society and the conditions that led to the housing boom. However, the Coalition is much more likely than the ALP to grossly exacerbate the situation by letting loose the same austerity agenda that has proven catastrophic for so many countries.

Hi Rhian,

Thanks for your critique. Appreciate this.

Re 1.

This is about the specific matter of prosperity. Wealth and income. Not job levels, rate of growth or debt.

To evaluate this, we must examine the relevant indicators.

The day after your first house loan, Rhian, did you say, “Omigod, the $50,000 in the bank is gone! I now have a debt of $350,000. What a poor destitute person I am suddenly!”

Re 3.

Data used is here:

http://www.tradingeconomics.com/australia/gdp-growth-annual

It includes the first quarter of 2013 only. Easily compared with other nations.

Which line are you looking at in Table 1 of ABS Cat. 5206.0, Rhian? There are 108 lines.

How do you make OECD comparisons with this?

Re 4.

The problem with Nicolaas Groenewold’s paper is that he “sets out to begin to fill this gap within the framework of a small VAR model of the Australian economy ...” [page 8]

Unfortunately, conventional economic modelling has proven inadequate with the GFC. Just as traditional economics didn’t work in the Great Depression.

Yes, surpluses and small debt are positives, but they don't explain Australia’s surge to the top of the world, do they?

Several countries which emerged securely from the GFC actually went in with huge debts at the outset: Israel, Switzerland and Singapore.

In contrast, Spain, Finland, Iceland and Chile all had modest debt and budget surpluses in 2008 yet suffered severe reversals.

The evidence confirms deficit and debt were not important.

Re 5.

The critical outcome is not just the debt they emerged with, but overall economic health – income, growth, national wealth, jobs, inflation, tax rates, productivity, savings, terms of trade, credit ratings.

On these, Australia is top of the world – by a mile – and streaking further ahead. No?

Re 6.

Growth is one factor. There are others. See 5, above.

Re 7.

No-one is “latching on to one or two quarters”, Rhian. The linked chart shows productivity growth for nine consecutive quarters! Off a high base.

Still seems all the data supports the article. But happy to look at other relevant info.

Cheers,

AA

There are many porkies in AA's manipulation of data notibly:

1, GDP growth from 2007 to 2012 was on average about 2.2% with about 1.2% of this occurring within the mining sector. With population increasing about 1.5% p.a. during this time, the non mining income relative to costs dropped.

The rising unemployment and increased casualization of the work force left many people feeling worse off.

Abbott's statement was correct.

2. Labor has introduced 22000 new regulations that have greatly increased the cost of business. The IR reforms have crippled small businesses and increased retail costs. The new inability of one man independent businesses to get ABN numbers has shut out 130 000 people from self employment etc, etc.

The Heritage foundation is a small group with limited knowledge of Aus, but even in this report it notes the negative effect of the labor government.

3. AA deliberately uses the growth figures not adjusted for population growth. Subtract the population growth and Abbott's figures are correct and AA is telling porkies.

4. UNICEF set up for child welfare? Really AA that is cherry picking in the extreme.

5.6. AA's comparison is facile. Spain, Finland, Iceland and Chile' economy were all very different.

Having Zero debt to start with and a huge mining boom is why Aus pulled through so well.

7. Multifactor productivity according to the ABS decreased by an average of 0.7% from 2007 to 2012. It increased between '96 to '04, and flattened after that.

8,9,10, Even Dudd is admitting the damage the carbon tax has done to industry and cost of living and is trying to move to a floating carbon tax at a lower value.

11. This was an aspirational statement, and AA's comment is irrelevant.

12. China is Aus's single largest consumer of commodities, and so AA's argument is purely semantics.

finally:

"And where are Australia's fact-checkers and what are they doing?"

a) in Aus not France,
b) Doing their jobs, not making things up like AA.

Hi again Shadow Minister,

Are you sure you have data to support those claims of yours?

Actual data. Really?

As an exercise, have a shot at this multiple choice quiz question:

In his speech on Monday of last week to the Australia-Israel Chamber of Commerce in Melbourne, Tony Abbott said, “The Howard/Costello Government … presided over what now seems like a golden age of prosperity – that’s been lost.”

Is this true?

On how many of these 25 variables was Australia performing better during the Howard/Costello years than now?

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 tax rate
11. indirect taxation rate
12. international credit ratings
13. economic freedom
14. personal savings
15. current account as a % of GDP
16. foreign exchange reserves
17. value of the local currency cf the US$
18. value of the local currency cf the euro and the pound
19. productivity
20. overall quality of life
21. balance of trade current
22. balance of trade history
23. terms of trade
24. government 10 year bond rate
25. world ranking on economic management

(a) twelve, about half
(b) only four
(c) one
(d) none

Thanks, SM,

Cheers,

AA