As the economy improves, Labors ownership of it deteriorates

by Bernard Keane

The contrast between the Australian economy and those of much of the developed world has rarely been greater. The US economy is at stall speed, or might even be in recession already, and may as well be anyway for the countrys army of jobless. The Europeans had only a temporary pause from their apparently steady path toward full-blown financial crisis when Germanys highest court ruled yesterday that the countrys participation in the Greek bailout was legal; at least they can go back to worrying about their own flatlining economies outside Germany. But the Australian economy came back strongly in the last quarter of 2010-11 and even that disaster-induced speed bump in the third quarter was deemed significantly smaller in hindsight. Even manufacturing, supposedly at deaths door courtesy of the strong dollar, made a substantial contribution to growth. As constant as the health of the Australian economy has been criticism that the government has bungled its management. Before the GFC, it didnt cut spending hard enough. Then its stimulus packages wouldnt work. Then they worked too well. Then they werent cutting spending enough again. Then they were going to

destroy the mining industry. Then the flood levy was going to undermine demand. Then it wasnt doing enough to help families make ends meet. Then the carbon price was going to destroy the economy. Then it wasnt doing enough to protect manufacturing or deal with the patchwork economy. The criticism du jour is about productivity, which if anything appears to have started getting off the ground to which it was knocked by WorkChoices and the GFC, but which instead is being framed as a peculiar problem of Labors economic management. Throughout it all jobs have been created, inflation kept in check and public debt kept low. Hell, weve even done what economists back in the 1980s and 1990s used to insist was critical to our economic futurewere saving more. Quarter after quarter, were producing economic data that the national flagellants of yesteryear, the commentators who insisted we were permanently one step away from Lee Kuan Yews poor white trash of Asia, would have given their right arms for. All of it, of course, appears to have happened in spite, not because of, Labors economic management. As steadily as job growth has increased, so too has Labors inability to own anything positive about the economy. This isnt a unique problem for Labor. John Howard and Peter Costello presided over a resources boom that saw the economy head back to something close to full employment for the first time since the 1970s. There was much to criticise about their mishandling of the boom, but Australians were more focused on whingeing about their cost of living, despite plenty of evidence the

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only problems about making ends meet for the top 80% of voters related to people being unable to control their consumption. The lesson is that Australians will find something to moan about even when they havent had it as good at any time since the post-war boom. But Labor s problem is much worse than Howard and Costellos. Labor has dodged everything the world has thrown at us and wont get an iota of credit from voters for it. The media gets part of the blamenot merely the incessant partisan campaign against the government by Murdochs minions, but much of the coverage of economic issues that can find any negative, no matter how carefully concealed, in data. But when polling shows, as Essentials did last week, that people would prefer the Coalition to handle things if there was another GFC, a priority for Labor should be establishing why theyve so badly messed up their reputation for economic management. Front and centre in any such inquiry should be Wayne Swan. Swans policy performance as Treasurer keeps being vindicated, but his political performance keeps being discredited. Under Keating and Costello the role of Treasurer evolved beyond being a safe hands economic manager to being the chief prosecutor of a governments case on economic management. It was a role better filled by Lindsay Tanner when he was around; Tanner not merely gave the sense that an adult was around to run things but was capable of succinctly explaining why the government had got it right and the Opposition got it wrong. Penny Wong is incapable of such a performance; Chris Bowen might have been, but he was instead dispatched to the Sisyphean labours of

stopping asylum seekers. Amid all the muttering about Julia Gillards leadership, and however unfairly given the ongoing strong performance of the economy, Wayne Swans position should be under active consideration as well.
----------------Someone recently said Labor couldn't sell fish to Eskimos. I'm Labor, and I should know. Am I the only one aware that the Queen is a fan of doing something about addressing climate change? http://www.youtube.com/watch?v=jFTXA0JVenQ Only Labor could ignore the opportunity of using Elizabeth II to sell its carbon pricing scheme. No 1 missed opportunity. Right-wing outfits mercilessly attack the Queen about her attitude on addressing climate change. These connect with the mob who organised recent Canberra stunts. Some have connections with Abbott, Jones, Hadley, Bolt and co. Labor could look good defending Elizabeth II by attacking these outfits and pointing to the connections. http://cecaust.com.au/pubs/pdfs/Fight_the_Queen.pdf Opportunity No 2 missed. Australian ranks 98 in the world on government debt severity (09/10). Treasury has gov. debt peaking at $106.6b in 2011/12 (7.2% of GDP) which should allow it to overtake Gibraltar and be in striking distance (behind half a dozen oil-rich states) for No 1 position as LEAST indebted nation. Of course we're talking fed. government debt, not private debt such as that caused by Abbott taking out a $700000 loan to fund a cozier lifestyle. Opportunity 3 missed. Who knows Australia vies with Norway for No 1 position as most developed country on the UN Human Development Index? Opportunity No 4 missed. Anyone got a clue Keating inherited an 11.5% inflation rate from Howard in 1983 and reduced it to 2%? Australia is currently in its 20th year of continuous GDP growth. The coalition was not in office when that surge began. Celebrations anybody? Labor inherited -0.5 GDP growth rate from Howard and by 1996 improved it to 5%. Keating left Howard with 3% productivity after he inherited -2%. Menzies holds the record for the highest post war inflation rate at 26% in Dec 1951. Howard holds the record for the highest interest rates at 21.4% in 1982. Labor floated the dollar. Labor reduced tariff protection and deregulated the financial sector. Labor introduced the wages accord, enterprise bargaining, and

ended the industrial mayhem that existed under Howard. Labor introduced the 4-pillars banking policy. Keating and Labor introduced compulsory superannuation which has led to $1.5 trillion in national savings and powers much of the share market. Keating instigated the push for greater trading links with China Labor built the Sydney Harbour Bridge, Opera House, Snowy Mountain Scheme and got us through a few world wars, the Great Depression, GFC. Need I go? Another dozen or so opportunities lost. Yes, Swanny needs to be replaced by Crean, but only on condition Crean can remember two-thirds of the above, and then talk about it until he's blue in the face. Factions breed numbers crunchers, they don't breed talent. Alan MacIntyre