Correcting Scott Morrison’s falsehoods on the Australian economy

The Treasurer's press releases are packed with incorrect assertions about Australia's economic dominance, falsehoods about tax relief and deflections from the government's financial incompetence -- and that's just in the last month.

Treasurer Scott Morrison’s official media releases have significant reach and influence, and most are repeated verbatim by a fawning, uncritical media. Unfortunately for us, many contain serious distortions and falsehoods.

This following analysis of three such releases these falsehoods will be supplied to the Parliamentary Library, Treasury and other archives where Morrison’s original error-laden releases are on file, so anyone, not just Crikey readers, may access the truth.

June 21

Morrison’s June 21 media release titled “Lower, fairer and simpler taxes for all working Australians” contains three false assertions.

The first is that the government’s personal income tax plan will ensure “all Australians paying tax will be better off”. This is not true. The changes will not relieve the millions of Australians hit by the range of hefty indirect taxes but who do not pay direct income tax.

Morrison’s claim that “Australia will continue to have a progressive income tax system, with those on the highest incomes paying most of the tax” would be true only if tax evasion — which currently relieves many top income earners of paying any income tax at all — is tackled. Evidence of widespread evasion is readily available. The Coalition has no credible plans to address this. NATSEM modelling confirms that Morrison’s proposed tax system from 2024-25 is less progressive than the current system. Tax cuts will benefit the rich more than the poor.

Finally, history shows that the belief that Labor is standing “for higher taxes on all Australian wage earners” is untrue. Judging by tax data found in statement 11 of the May budget papers, we can see that taxation receipts (table 3, page 11-9) as a percentage of gross domestic product through the Hawke/Keating Labor period averaged 21.84% each year. This increased significantly through the Howard years to 23.44%. The average then fell through the Rudd/Gillard years to just 20.80%. It rose again during the Abbott/Turnbull period to 22.20%.

June 18

Morrison’s June 18 release asserts that “Labor’s higher taxes can never keep up with their higher and uncontrolled spending.”

Not true. Spending as a percentage of GDP is shown in table 1 (page 11-5) of statement 11 of the budget papers. Through the Labor years this averaged just 24.84% of GDP. That is despite the vast outlays — as they were depicted at the time — of nearly $89 billion in stimulus spending in 2008-09.

So spending to GDP should have fallen back dramatically under the Coalition, if Morrison is to be believed. But no. It has increased to an average of 25.28%.

June 6

There were three falsehoods in just one sentence in Morrison’s June 6 media release on annual GDP growth: “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.”

Firstly, Australia is nowhere near the leaders. Of the 183 countries whose annual GDP growth is listed with trading economics, Australia with 3.14% ranks equal 106th. That’s down in the bottom half.The average growth for those 183 economies in 3.71%, well above Australia’s 3.14%. Global leaders today are China on 6.8%, India on 7.7% and Ireland on 8.4%.

Australia is not “Bettering the OECD average”. Average growth for the 35 wealthy members of the Organisation for Economic Cooperation and Development (OECD) is 3.17%. Australia’s 3.14% is lower.

Data on all countries can be found here. Australia’s growth can be calculated from ABS file 5206 (table 2, column DT).

But perhaps Morrison’s worst deception comes from the phrase “once again”. He wants us to believe Australia’s fortunes have finally been restored. He claims earlier in the same release that “the Turnbull Government’s plan for a stronger economy is working, and we need to stick to that plan.”

The opposite is true. Australia’s GDP growth now ranks 16th in the OECD — lower than virtually the entire Labor period. For most of the Rudd/Gillard years, Australia was in the top six. By December 2008, with the developed world impacted by the global financial crisis, Australia’s annual growth was second highest. In the next two quarters, Australia was clear first.

At the end of Labor’s last full calendar year, 2012, Australia ranked a solid fifth. Does ranking 16th really mean Australia has risen to the top “once again”?