Peter Costello spelled out what seemed like a convincing account of the Howard
Government’s economic record in his Press Club speech
yesterday and even tried
to map out a future agenda, something the PM steered away from last
night. However, this notion that both Costello and Howard have been
geniuses on economic management does not stand up to scrutiny.

Sure, Australia has never before had a decade with only one quarter of
negative economic growth, but this achievement has been as much about
the legacy of Hawke and Keating, an unsustainable housing bubble, the
best terms of trade in 30 years and explosive economic growth in China,
than any specific measures taken by this government.

Similarly, low inflation and low interest rates have been a global phenomenon, as is the notion of an independent central bank.

Falling public debt, economic growth and surplus budgets are always
welcome but the major blemishes of large external
deficits, rising foreign debt, a poor export performance, falling
productivity since 2003 and record levels of taxation and government
spending is hardly something a Liberal government should be proud of.

Costello is keen to talk up the impact of global shocks such as SARS,
September 11, the Asian crisis and the tech wreck, but these were
nothing compared with the bigger disruptions caused by the two OPEC oil
shocks in the 1970s and the Volcker US rate hikes of 1979-80 and
1981-82.

Apart from RBA independence, the waterfront and industrial relations, the Howard Government’s own reform record
has been pretty patchy and they’ve conspicuously baulked at reform
proposals in areas such as pharmacies, newsagents, civil
aviation, agricultural marketing, personal income tax (which they’ve
actually made worse) and the professions.

There has also been a dangerous concentration of corporate power,
despite the PM’s claims last night that small business is the backbone
of the economy. Tell that to the suppliers of Coles Myer and Woolworths
or any bank customer.

The GST was about shoring up
government revenues, not about micro reform or improving productivity.
And since 2001 they’ve imposed a torrent of productivity-stifling
regulation in the name of “security” and corporate governance, not that improving governance is a bad thing.

That said, you’d far rather have Howard and Costello running the
economy than the economic troglodytes that Federal Labor has served up
since the departure of Paul Keating in 1996.