We have been told for many years that the Coalition are better economic managers, without being provided with any evidence to support this bold claim.
Hindsight is a wonderful thing, and distance gives you the perspective and the ability to take a more dispassionate assessment of many things, but that is especially true of government performance. The Howard government is now far enough behind us to take a look at their economic record and that of the former Treasurer Peter Costello. And in recent months a great many experts and commentators have been doing this
According to Crispin Hull in the Canberra Times the structural deficit we currently have in the budget belongs wholly to Peter Costello and his hopeless performance as Treasurer. An excellent article by Mike Seccombe highlights the fact that a number of very wealthy Australians essentially pay no tax – surely that’s revenue problem (as well as a problem of equity). Mike also goes on to outline how many Howard-era policies shifted the tax burden from the big end of town to those at the bottom of the economic pile… the exact template Abbott spectacularly failed to implement in 2014.
Despite the assertions of Scott Morrison, our latest non-performing Coalition Treasurer, that the only problem we have is a spending problem, analysis by the ABC suggests we have a revenue problem also. And despite recent claims by the budget office that we do have a spending problem, Greg Jericho demonstrates things are more complex than that.
Howard himself was treasurer, appointed following the removal of Phillip Lynch for dodgy land deals while in the Fraser government. During this stint many consider Howard to have been inept. In 1982-83 Howard personally oversaw the worst recession since the Great Depression.
All damning stuff, and a long history of blunders and ineptitude.
In addition to all the poor report cards on so many Howard and Costello policies, it is worth looking at additional spending (the baby bonus) and revenue (fuel excise) initiatives.
The Baby bonus was largesse at the height of the mining boom, introduced by Costello, but poorly targeted and always completely unsustainable. It took a Labor government to pare it back and better target it to actual need rather than middle and upper class pork barrelling. The change introduced in 2013 by the Gillard government is projected to save $2.4B over 4 years. Given that the bonus was introduced in 2002, and based on these numbers the wastage as a result of poor Coalition policy and loose economic management around this issue alone is likely over $6B.
Fuel excise was cut and frozen in March 2001 – at a time (in an election year) when the Howard govt was deeply unpopular. As Bernard Keane explains it worked a treat politically by turning Howard’s political fortunes around, but has been something of an economic disaster. The Australia institute found that up to June 2015, this desperate move by Howard cost $46B in lost revenue. Keeping Howard and Costello in their jobs was very expensive for us all.
Malcolm Turnbull came to the top job by promising better economic leadership. At the time anyone looked better than Hockey and Abbott. Things moved slowly because everything was on the table and was being considered carefully by the government.
But that was a lie. Malcolm Turnbull had already decided to keep the baby bonus unchanged (in order to get the National’s support for his Coup) -this will cost $1.4B over the next 10 years.. Clearly a spending problem.
When negative gearing and superannuation entered the public conversation Turnbull insisted he wanted to have, Malcolm and the Coalition tried to shut it down by suggesting house prices would both rise and fall in the same 24 hour period as well as rents going through the roof. Economist Saul Eslake believes there is no evidence to support the claims of those running the scare campaign.
It seems yet again that the Coalition is willing to sacrifice economic improvement for political gain.
Further evidence of the Coalition’s economic credentials - there has in fact been a turnaround since the Coalition took charge of the Treasury benches. Australia has gone from the stand-out economy through the global financial crisis (GFC) to the worst performer in terms of growth trajectories among the world’s wealthiest nations, according to new OECD data from the last quarter of 2015.
The Turnbull government is currently sinking like a stone for many reasons – infighting and division, poor leadership and communication, a continued haphazard approach to government, and significantly… economic mismanagement.
But to be fair the Turnbull government is no different than the Abbott, Howard and Fraser governments… they were all terrible economic managers.
by Mark Enders
The Townsville Greens will publish blogs considered to be of merit. The opinions expressed are those of the Author.