Alan, you’re shifting the goalposts from fact checking Abbott’s speech to a general discussion of your diagreements with the opposition’s economic analysis; at the same time assuming I share their view, which is only partly true.

Re a), I agree that we need to take into account international context when assessing Australia’s relative economic performance. That’s why I think you underestimate the importance of China, resources and the terms of trade. I wish you’d stop writing as though the OECD comprises the whole world economy, though.

Re b) the quotation from Abbott you critique does not address whether it was appropriate to go into debt in response to the GFC (I think it was), but the fact that Australia’s good fiscal position before the GFC gave it a much better platform for borrowing than countries that were already heavily in debt. The data confirm this.

Re c, d, e, and f – none of these points are raised in the Abbot quotes you cite.

Re g) and h), the evidence is mixed. Refer to my answer above on GDP growth verses levels, and household net wealth (which you have so far ignored). Likewise for “golden age of prosperity”. By your measure, Australia in the 1930s depression was an age of prosperity because real GDP was higher, in average, than in the 1920s.

“Unemployment increases and growth decreases”. That is exactly what the budget forecasts actually predict for 2013-14:
http://www.budget.gov.au/2013-14/content/bp1/html/bp1_bst2-01.htm


“Australia’s economy is now healthier than any other economy anywhere ever.” Well, it depends what you mean by “healthy”; it’s hardly a term with a precise definition in economics. Other countries past and present have recorded higher GDP and income levels and growth, higher household wealth, stronger employment growth and lower unemployment, higher consumption and investment, a stronger balance of payments, less inequality, and less government and (especially) household debt. In fact, I can’t think of any major economic indicator on which Australia’s economic performance is better than any other economy, ever.

None of the verifiable facts you quote from Abbott are actually wrong; though the interpretations are, of course, debatable.

It's not debt per se, rather is it debt for investment or debt a la Detroit. The GillRudd government is definitely of the latter, what is to be expected from winners of the Labor patronage machine?

Hi Rhian:

Thanks again.

Re: “To claim that our economic growth is the best in the world is wrong.”

Correct. Hope I haven’t claimed that. It's not even best in the OECD.

It does, however, shine in any grouping of comparable nations.

Re: “you’re shifting the goalposts from fact checking Abbott’s speech to a general discussion of your disagreements with the opposition’s economic analysis”

Maybe.

Is the assertion that the Rudd/Gillard Governments have worsened Australia’s economy true or false?

That’s the issue under analysis. Data examined so far confirms it’s false.

Re: “The quote you try to falsify says: ‘Australia's debt position is better than that of some other countries – not because we've done better, but because we started better.’ The data show a very strong (and unsurprising) positive correlation between countries’ debt positions before the GFC and their positions after. The six countries with the lowest debt in 2006 also had the lowest debt in 2013. Abbott is right.”

Not at all. That's only if you measure “having done better” by debt levels post GFC.

If you do this, then certainly there’s a strong (and unsurprising) correlation.

But economists don’t just consider debt. They look at the real measures of success - income, growth, jobs, inflation, taxes, productivity, savings, terms of trade and credit ratings.

There is no correlation whatsoever between low debt before the GFC and these outcomes, is there?

If anything, it’s a reverse correlation. Virtually all countries with low or zero debt at the outset did particularly badly on those variables. [Luxembourg, Russia, Ukraine and Chile.] Except Australia.

Most countries with budget surpluses at the outset also performed badly on those outcomes. [Spain, Finland, Iceland, Chile.] Except Australia.

Countries with huge deficits and debt at the outset actually emerged pretty well. [Israel, Switzerland and Singapore.]

So economists seek other explanations, consistent with the facts. As it happens, we find it when we check correlation with the 2009/10 stimulus packages.

Which means “we have done better” is actually true.

Mr Abbott’s denial is false.

As are the other statements noted in the article. No?

Cheers,

AA

Greetings again,

@Killarney:

Yes, agree with almost all your observations. Thanks.

Just not sure that Australia’s private debt is too high. Yes, it’s higher than other countries but, generally, the higher the debt the better the long-term outcomes. Provided, of course, investments are appropriate, interest rates are low and repayments manageable.

Most informed opinion abroad re Australia’s government debt is that it’s too low for the times. This may be shown in due course to have been a significant lost opportunity.

@Shadow Minister:

Re: “GDP growth from 2007 to 2012 was on average about 2.2% with about 1.2% of this occurring within the mining sector.”

Correct. That is my point. Growth has continued. It has not stopped or reversed. Hence wealth has continued to increase, albeit more slowly during the GFC.

Hence assertions that Australia is now less prosperous than in 2007 are false.

Correct?

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

Correct also. “Feeling” worse off.

Your country is matched only by North Korea in having a mainstream media which tells people the opposite of the truth in order to make them feel a certain way.

North Koreans are told their government is extraordinarily brilliant so they feel good.

In Australia it's the other way around.

@Atman:

No, there’s no evidence whatsoever that the mining boom saved Australia from the GFC.

Yes, it helped Australia’s economy tick over through the Howard years. But during that period, Australia’s economy actually slipped from 6th ranking in the world [in 1996] back to 12th [in 2007].

Too many problematic questions with that hypothesis, Atman.

If minerals exports and high prices were so important, why did Brazil, South Africa and the other mineral exporters find no protection from the GFC?

If trade with China was important, why did other nations with even stronger trade links find no protection?

If the mining boom was so vital, why was Australia slipping backwards?

I understand this hypothesis has been repeated ad infinitum by your media and many politicians, Atman.

But it just ain’t true.

Cheers,

AA

AA,

It is always easy to fudge the figures if you leave things out.

The population has been growing at about 1.4% p.a., and as 98% are not employed in mining, the roughly 1% p.a. non mining GDP growth has left the rest of the country -0.4% p.a. worse off.

Correct?

Anyone actually living here can see that retail, tourism etc are all suffering, and with unemployment and job casualization increasing, most Australians are not feeling better off.

WRT Brazil and South Africa, comparing them with Aus is facile as they are largely manufacturing for export intensive, most of their economy was badly hit, the mining sector did help shield them.

Canada is a much closer mix, and also fared relatively well.

"...Australia remains the envy of the advanced economic world..."

http://www.theage.com.au/business/australian-position-enviable-20130731-2qzlg.html

''But it's also partly due to surprisingly sensible macro-economic management. They've just messed up much less than is the norm in advanced economies.''

"Willem Buiter, a former chief economist for the European Bank for Reconstruction & Development, is in Australia this week on a rare visit."