Once again, federal opposition finance spokesman Andrew Robb has shown himself to be unsuited to a frontbench position, especially in a critical economic portfolio.
It’s a pity, because he’s not in federal Parliament merely to make shadow treasurer Joe Hockey look good. He’s there to contribute something meaningful to governance and the debate over the economy. But judging by comments in his press release issued about the speech to the Committee for Economic Development of Australia yesterday, Robb is what you would call a GFC denialist and has an odd worldview that seems to have been formed a bit before the Tea Party in the US started believing all government debt is bad.
In that he is in good company — Hockey also hates government debt, as does their boss, Opposition Leader Tony Abbott, a man deeply suspicious of markets. But Robb also has a deep suspicion of the realities of the past five years of Australian economic history and performance. He still fails to understand how close Australia came to following Europe, the US and other major economies into recession, or a sharp and lasting slowdown in 2007-08.
Robb forgets that unemployment rose from 4% in October 2007 to a peak of 6.3% in June 2008. The number of people out of work jumped from 483,000 to more than 683,000. GDP growth contracted at an annual rate of close to 3% following the collapse of Lehman Brothers, which is pretty sharp, but Robb has ignored that. Thanks to the big round of government stimulus, growth bounced back to 0.9% in the March 2009 quarter (a rebound at an annual rate of more than 3%). It eased back to zero in the June quarter, and then rose by 0.7% and 0.8% in the September and December quarters respectively as the impact of the second round of stimulus took hold (the schools building program and the insulation spending).
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This saved Australia from a sharp slowdown in 2009. The lack of any growth in the June quarter came as unemployment was worsening — hitting that high of 6.3% in 2009, with 483,000 people out of work and hundreds of thousands more underemployed. The underemployment rate rose from 6.2% to 7.8% in the same time, meaning the total unemployment/underemployment rate jumped to more than 12%.
The press release on his speech (the text of which wasn’t on his website) said:
“I would assert that both the government’s profligate and wasteful response to the GFC and its failure to take seriously its rapidly accelerating public debt levels are creating very real vulnerabilities which will have long term negative consequences for jobs and growth.
“Mr Robb says for too long Labor has used the GFC almost half a decade ago, with its principal impact on the northern hemisphere, as an excuse to justify taking net debt from zero of $70 billion in net assets, to the current record level of $168 billion, plus its $7 billion plus annual interest payment bill.”
And there’s more of this simplistic rubbish, which reminds us Robb is a creature of the 1980s and the anti-union push that brought the likes of Peter Costello to prominence. Robb was head of the National Farmers Federation and the Cattle Council. That doesn’t equip him to be finance minister.
And Robb clearly didn’t understand the speech on March 19 by deputy RBA governor Phil Lowe, who outlined just how well Australia had performed since 2010:
“Since that time, output in the Australian economy has increased by 9%. The number of people with jobs has risen by over half a million. The unemployment rate today, at 5.4%, is exactly the same as it was three years ago … By the standards of most other countries, this represents a very good outcome and a high degree of internal balance. Remarkably, we have achieved this balance despite experiencing the biggest boom in business investment and the largest rise in the terms of trade for over a hundred years. In the past, much smaller investment and terms of trade booms caused outbreaks of inflation and the emergence of other imbalances in the economy. On this occasion this has not happened.”
All these facts are an inconvenience for Robb and others in the federal opposition. They simply deny the GFC happened and that the economy has managed to grow, in spite of difficult headwinds in the global economy and at home.