This is the only government since Fraser’s that hasn’t presided over an improved standard of living.
During the election campaign the government is going to make a great deal about its economic management. And yet, while the story on jobs is certainly good, on other measures it has very little to boast about.
When gauging the economic performance of a government, pretty much the worst thing you can do is look at the budget balance. Whether it is debt or deficit or surplus, really we should not care too much at all.
It does not matter (despite what the ALP will try to tell you) that net debt has reached record highs under the Abbott-Turnbull-Morrison government. Similarly, it does not matter (despite what the LNP will try to tell you) that the government is projecting a budget surplus for next year.
So I have never gauged success or failure on the basis of inputs; I only really care about the end result. Has economic growth improved? What about jobs and wages? And crucially, what has happened to living standards?
Here the story is complicated. We can merely compare the present with past performance, but the Australian economic does not exist in a vacuum – we need to consider how well the government played with the cards they were dealt by the world economy.
For example, Australia’s GDP per capita has grown faster on average since September 2013 than it did under the Rudd-Gillard governments, 1% compared with 0.9%. And yet, during the past five and half years, the average per capita growth of Canada, New Zealand, the UK and US has been 1.3%, whereas during the Rudd-Gillard years those countries average a mere 0.1%:
Compared with the nations with which we most compare ourselves, the Rudd-Gillard years stand out as the absolute peak period of outperformance. Even though the Hawke and Howard years were better for GDP growth, so were they for the rest of the world.
The story for labour productivity is also not good. The Abbott-Turnbull-Morrison government has recorded the worst average and median annual productivity growth of any government going back to the last four years of the Fraser government:
On jobs the government certainly has a better story to tell. Since it came into office the percentage of adults in work has gone from 61.1% to 62.4%, and the percent of those aged 25-64 in the peak working years has gone from 75.2% to 77.5% – which is a record high.
It’s mostly due to the influx of women into the workforce, but also from a halt in the drop of youth leaving the workforce and men also improving slightly:
And yes, full-time work is not as plentiful as in the past, but that is a long-term issue, and even in terms of hours worked per capita, the current government has done well – although the past year has not seen much improvement:
But even here some context is needed. The Abbott-Turnbull-Morrison years have been when most nations have seen a better employment picture than occurred during the GFC. Among 15-64 years olds, for the first time since the Hawke government the US has actually improved more than Australia:
But let’s give them some credit. Yes, employment has grown well. But as we well know, that has not translated into increased wages.
And just how badly they current government has performed is quite startling.
The best comparison of earnings is average male full-time earnings, as this removes some of the downward bias we get in total average earnings or total full-time earnings, which occurs due to increases in part-time workers and women entering the workforce in lower-paying jobs.
And here the story is awful.
Under the Howard government, average male full-time earnings grew each year by an average of 1.53% in real terms. Under Rudd and Gillard they went up by 1.93%; and since September 2013 they have grown on average by a measly 0.01%:
This translates into the worst period of growth in real household disposable income per capita under any continuous party of government since Fraser – the only one that cannot say that standards of living have improved since they won office:
And worse for the Morrison government is that governments that have overseen such poor standard of living invariably do poorly come the election:
The Liberal party always likes to talk up economic management – and mostly wants to talk about the budget surplus as though that is something tangible to people, when in reality it is not. When we look at the performance of this government, the story is not one that really deserves much boasting.
The world economy has been improving and so it is expected that growth and employment would be better now, and yet, compared with the rest of the world we’re not exactly performing our socks off.
And for all the good news about jobs, the reality is households are no better off now than they were in 2016 or 2013.
• Greg Jericho is a Guardian Australia columnist