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 country’s army of jobless. The Europeans had only a temporary pause from their apparently steady path toward full-blown financial crisis when Germany’s highest court ruled yesterday that the country’s 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 death’s 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 didn’t cut spending hard enough. Then its stimulus packages wouldn’t work. Then they worked too well. Then they weren’t cutting spending enough again. Then they were going to destroy the mining industry. Then the flood levy was going to undermine demand. Then it wasn’t doing enough to help families make ends meet. Then the carbon price was going to destroy the economy.
Then it wasn’t 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 Labor’s economic management.
Throughout it all jobs have been created, inflation kept in check and public debt kept low. Hell, we’ve even done what economists back in the 1980s and 1990s used to insist was critical to our economic future — we’re saving more. Quarter after quarter, we’re producing economic data that the national flagellants of yesteryear, the commentators who insisted we were permanently one step away from Lee Kuan Yew’s 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, Labor’s economic management. As steadily as job growth has increased, so too has Labor’s inability to own anything positive about the economy.
This isn’t 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 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 haven’t had it as good at any time since the post-war boom.
But Labor ‘s problem is much worse than Howard and Costello’s. Labor has dodged everything the world has thrown at us and won’t get an iota of credit from voters for it. The media gets part of the blame — not merely the incessant partisan campaign against the government by Murdoch’s 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 Essential’s 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 they’ve so badly messed up their reputation for economic management.
Front and centre in any such inquiry should be Wayne Swan. Swan’s 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 government’s 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 Gillard’s leadership, and however unfairly given the ongoing strong performance of the economy, Wayne Swan’s position should be under active consideration as well.
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