The economy: Who does it better?

Like me, you were probably driven mad by John Howard telling us, without any shred of evidence, that the economy was always better managed by the Coalition. Oh how he raved on.

Unfortunately, too many people believed him and kept repeating the claim. People still do, for no other reason than it was forever repeated by the Liberals and the mainstream media.

Let’s be rational about this and evaluate Howard’s claim.

Evaluating the economic management records of the Labor Party and the Coalition involves looking at various economic indicators over time. Here’s a brief analysis:

GDP Growth and Employment

Labor: According to Stephen Koukoulas in The Guardian, Labor has shown better performance in terms of GDP growth and employment when compared to the Coalition. Over a 43-year period from 1972, Labor governments have generally seen higher average annual GDP growth and stronger employment growth.

Coalition: The same analysis suggests weaker GDP growth under Liberal governments, particularly under the Abbott/Turnbull administration. However, economic performance can be influenced by global economic conditions, and the Coalition often highlights its management during more stable economic times, like the Howard era.

Inflation, Taxes, and Debt

Labor: There’s evidence that Labor governments have managed inflation and budget surpluses effectively, with claims of lower taxes under their governance. Moreover, Labor has been credited with managing the economy through the Global Financial Crisis without falling into recession, which was acknowledged by various experts and world leaders.

Coalition: Conversely, there are criticisms of the Coalition for high spending, borrowing, and taxation. The Liberal Party has been accused of doubling government debt in recent years and not achieving budget surpluses as promised. However, they argue their economic strategies support private sector growth and lower tax burdens.

Public Perception and Policy Impact

Labor: Recent polls and analyses suggest that the public increasingly trusts Labor to manage the economy in the interests of everyday Australians, particularly in dealing with cost-of-living issues. Labor’s policies on wage growth, employment, and social welfare have been seen as more supportive of the average citizen.

Coalition: The Coalition traditionally claims (Sydney Morning Herald, paywalled) superior economic management but has faced criticism for policies perceived to favour big business over individual welfare. The narrative of being better economic managers has been challenged by economic data and public sentiment in recent years.

Economic Crises Management

Both parties have managed (Sydney Morning Herald, paywalled) through various economic crises. Labor has been praised for its handling of the Global Financial Crisis, while the Coalition’s management during the early stages of the COVID-19 economic impact, particularly through fiscal stimulus, was notable. However, the effectiveness of these responses is subject to debate, with Labor often getting credit for preventing a recession during the GFC, and the Coalition for initial economic support during the pandemic.

Conclusion

The best record in managing the Australian economy can be subjective, depending on which metrics are prioritised. Based on the data provided:

Labor tends to show better outcomes in GDP growth, employment, and managing through global crises like the GFC, with a focus on policies that benefit the broader population.

The Coalition emphasises private sector growth, lower taxes, and sometimes has better outcomes during periods of global economic stability, but they’ve faced significant criticism regarding debt, spending, and inflation management in recent terms.

Ultimately, the choice between which party has managed the economy better could depend on one’s valuation of these different economic aspects and the specific historical context of each government’s term.

However, I think it’s fairly safe to say that Labor do it better. They have the runs on the board.

So John Howard was fibbing after all. Who would have thought?

Don’t look so surprised, John.

 

 

Also by Michael Taylor: Aussie women are a phenomena, not a relic

 

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