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Response to the reactions to the Budget reply

By Alan Austin - posted Monday, 20 May 2013


Implying Australia's economy is not strong now? In fact, Australia's economy was ranked 12th in the world in 2007. It is now clearly number one. Switzerland and Canada are jostling for second. But no economist disputes Australia's ascendancy – on virtually every measure.


4. "In the second line of this week's budget speech the Treasurer said that it was a budget for jobs and growth. In fact, unemployment increases and growth decreases."

The problem here – and an embedded difficulty throughout – is ignoring the global financial crisis. The GFC devastated economies worldwide. None was spared.

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Average annual increase in Australia's gross domestic product was 3.65% during the 11 Howard years. Then down to 2.44% under Labor.

But here's the thing: Australia's average through the Howard years was about the same as equivalent countries. The USA averaged 3.04%. Canada 3.3%. Some European countries were higher. Luxembourg averaged 4.78%.

Then the GFC knocked the stuffing out of every economy – except one.

In the five years under Labor in Australia, growth has been 2.44%. But in the USA 0.54%, in Canada 0.94% and Luxembourg 0.52%. And the Euro Zone negative 2.3%!

Economists around the world regard this as a major pointer to the Australian Government being the world's best economic manager. Mr Abbott should not claim the opposite.

5. "That's why good governments are at least as careful spending the money they hold on trust from the people as you are when making decisions that affect your family's budget."

Only twice has there been careless spending in Australia's history, according to a January report by Harvard economist Dr Paolo Mauro and others, published by the International Monetary Fund.

They examined 200 years of finances in 55 countries and found two periods of "fiscal profligacy" in Australia – both during the Howard years. None since.

6. "This government has [made your life harder] with its … skyrocketing debt."

Australia's borrowings, according to many independent analysts, are at the right levels for the times.

New York-based Moody's international credit rating agency reassessed Australia's economy after last week's Budget.

"Consolidated government debt is still low compared to other Aaa-rated countries at well under 30% of GDP," Moody's stated. "Australia's relatively low level of government debt has been one of the factors supporting the Aaa rating."

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Only ten wealthy nations reduced debt to GDP in the last year. Australia's reduction by 2.2% was only bettered by Iceland and Norway. That is not "skyrocketing".

7. Far from making "your life harder" it is precisely the low level of borrowings set by the Rudd Government to fund the optimum level of stimulus which saved Australia almost alone in the world [with Poland] from severe recession in 2008-09.

Had the Government taken any other course – followed Coalition policy, for example – Australia would likely still be ranked 12th and mired deeply in recession, unemployment and poverty.

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About the Author

Alan Austin is an Australian freelance journalist currently based in Nîmes in the South of France. His special interests are overseas development, Indigenous affairs and the interface between the religious communities and secular government. As a freelance writer, Alan has worked for many media outlets over the years and been published in most Australian newspapers. He worked for eight years with ABC Radio and Television’s religious broadcasts unit and seven years with World Vision. His most recent part-time appointment was with the Uniting Church magazine Crosslight.

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