The quantum of cant and hypocrisy from Tony Abbott and Joe Hockey in response to yesterday’s GDP growth figures seems one of Australia’s fastest-growing economic variables.
While it is true, as Crikey reported yesterday, that the higher figure for the first quarter of 2015 — compared with the last three quarters — is welcome news, there seems scant basis for Hockey’s hubris.
The Treasurer told the Parliament yesterday: “The Australian economy had one of the fastest-growing quarters in the world in the first quarter of this year. We were faster than any other G7 nation and one of the fastest-growing economies in the developed world in the first three months of this year.”
Really? Only if just the one number is considered in isolation. Comparisons with just one quarter are fraught exercises for several reasons. Firstly, aberrations arise randomly. Second, the first quarter in the United States and elsewhere is frequently down due to winter inactivity. Third, the first quarter in Australia is boosted by summer tourism and education. And fourth, we have the much more reliable annual GDP growth figures provided each quarter along with individual quarter-on-quarter numbers. This is the number economists do (and politicians should) examine.
Looking at this, things are actually pretty grim for the PM and the Treasurer. At 2.3%, this is the equal-lowest annual-growth figure since the second quarter of 2011, when the GDP was whacked by the devastating Queensland floods.
This quarter’s rate is down from 2.5% three months ago, which was down from 2.7% six months ago, which was down from 3.5% a year ago. The variable is on a steady slide.
Compared with the wider group of comparable economies — the 34 members of the Organisation for Economic Co-operation and Development — Australia currently ranks 19th. Australia’s 2.3% is well behind Spain (2.7%), Poland (3.6%), Hungary (3.4%) and the Czech Republic (4.2%), which have none of Australia’s immense natural advantages.
The performance looks even more dismal when evaluated against Abbott’s and Hockey’s bold promises and denigration of the opposition before the 2013 election.
“It will be my number one imperative to safeguard the economy against a significant downturn and to turbo charge economic growth and jobs,” Hockey said in June 2013.
When that was spoken, annual growth was 2.5%, the fifth highest in the OECD, behind Chile, Estonia, Israel and Turkey.
Tony Abbott was even more gung-ho in opposition: “The Coalition can deliver tax cuts without a carbon tax because we will eliminate wasteful and unnecessary government spending and because lower taxes and higher productivity will boost economic growth.”
When that was spoken, November 2012, annual growth was 3.1%, the fourth highest in the OECD, behind Mexico, Chile and Estonia.
Hockey said yesterday, while boasting of his 2.3%, ranked 19th in the OECD: “We’ve had a terrific set of numbers that came out today, and those numbers have proven that there are some clowns out there that are talking about recession and dark clouds on the horizon. They’ve been proven to be looking foolish.”
Well, let’s hope they are. In due course. We shall know more about that in three months’ time, as Australia’s winter sets in. Meanwhile, with actual delivery measured against promises, a touch more humility on Abbott’s and Hockey’s part — and civility towards their predecessors — might be in order.