Once again the mainstream media are in lock-step misreporting Australia’s economy.
Most reports last week hailed the 1.0% quarterly and 3.1% annual growth in gross domestic product (GDP) as a success:
Ute beaut. Economy shifts to overdrive, surging 3.1% – Sydney Morning Herald
The one per cent surge in economic growth … lifted the annual rate to a robust 3.1 per cent – The Australian
The Australian economy has beaten expectations, with very strong 1 per cent growth – ABC News
It’s a dramatic turnaround for the economy – Channel 10 News
They are all wrong. Annual growth of 3.1% is well below most benchmarks. In the current global environment, this is a fail. Just among APEC economies — the 21 countries sharing Australia’s Pacific rim region — the average GDP growth is above 3.8%. Thailand, Hong Kong, Singapore and Chile are all above 4.0%. Malaysia, Brunei and Indonesia exceed 5.0%. Vietnam, China and the Philippines are above 6.0%. Australia is lagging in the bottom half.
Once again, the media are ignoring the global boom in trade, investment, jobs and profits now in its third year — and now dragging Australia along in its wake. This is proven by the fact that export prices and external demand were the key drivers of the growth, not anything the government has done.
Last week, Treasurer Scott Morrison — on TV and in his media release — preached with the fervour of a televangelist that Australia’s modest 3.1% growth was better than a small number of much larger economies: “Australia has climbed back to the top of the global leaderboard, leading the major advanced economies of the world, bettering the average growth of the OECD and all G7 nations once again.”
There are three problems here. The first is that “Australia has climbed back to the top of the global leaderboard”. This is false. Trading Economics shows the latest GDP growth figures for 185 economies. Australia’s 3.1% ranks equal 96th. That’s in the bottom half of the table, nowhere near the leaders.
The second ruse is claiming Australia is “bettering the average growth of the OECD”. In fact, the average of GDP growth numbers for the 35 OECD countries today is 3.08% – almost the same as Australia’s 3.1%. But New Zealand, Luxembourg and Ireland have yet to post their first-quarter numbers. If just one of these posts rise, Australia will slip back below average. In any event, bettering the OECD average is nothing to brag about. Australia should be right at the top.
The third sneaky trick is comparing Australia with the G7 nations, which Morrison has done before. Australia is not a G7 member. So this is as relevant as claiming Australia’s growth is better than countries’ ending with “stan”. (It isn’t, by the way. They average 4.8 %.)
Australia is a member of three groups with which comparisons should be made. These are the rankings and averages:
The world: equal 96th out of 185 economies, equal with Finland, Mauritania and Ukraine. World average is 3.58%, above Australia’s 3.1%.
APEC countries: 12th out of 21. Average 3.85%, well above Australia’s 3.1%.
OECD countries: equal 15th out of 35, equal with Finland. Average 3.08%, virtually the same as Australia’s 3.1%.
All these rankings have declined from the Labor years, when Australia really did lead. For most quarters in 2008 and 2009, Australia was in the top six developed countries.
In December 2008, Australia’s 1.6% growth ranked second in the OECD, behind only Poland. The average was -2.93%. In the next two quarters, Australia topped the table by a fair margin. Australia’s 1.5% in the 2009 March quarter was certainly below Australia’s long-term average. But it was way ahead of Norway and Poland, which were the only other rich countries to record positives. The average for the group was an appalling -5.2%.
In the 2009 June quarter, the average declined even further — down to the all-time low of -5.41%. Australia increased its growth to 1.9%, moving further ahead at the top of the table. To listen to hot-gospeller Morrison and his hallelujah chorus in the press gallery, one would think Australia is still at the top, instead of languishing well down the list.