Two weeks ago Prime Minister Scott Morrison appeared on the ABC's 7.30 report with Leigh Sales. During the sixteen minute interview, Mr. Morrison made a number of claims which have since been repeated in press conferences and have been disseminated by the Australian media, with limited scrutiny. Alan Austin has provided the friendlyjordies team with his research and insights disputing many of these claims.
The Strength of the Australian Economy during the COVID-19 Pandemic
Scott Morrison“The Australian economy has come through this pandemic, stronger than all the G7 countries in the world.”
As described by Mr. Austin:
This has been a standard porky pie since Morrison became Treasurer in 2015. It works because few people know what the G7 is and it sounds convincing when delivered with hubris.
The G7 comprises seven large economies, the UK, USA, Canada, Japan, Germany, France and Italy, and, notably, does not include Australia. According to Mr. Austin, these economies feature "cumbersome bureaucracies, extensive government debt and slow economic growth," the flattener referring to the annual increase in gross domestic product (GDP).
Currently, Australia’s 4.2 per cent annual economic growth beats G7 countries Canada, Japan and Germany. But it lags France (5.4), Italy (6.2), the USA (5.5) and the United Kingdom (6.6). In this way, Mr. Morrison is factually inaccurate in his claim that Australia's economy is, following the pandemic, in a stronger position than 'all' of the G7 countries.
Alan Austin: The point Morrison slides over is that Australia is not a G7 country and therefore should not be compared with them. Australia must be ranked alongside all advanced economies, as listed by the International Monetary Fund (IMF), or all members of the Organisation for Economic Cooperation and Development (OECD), the club of 38 developed, free enterprise economies. Among all 38 developed OECD members, Australia now ranks 27th on GDP annual growth, almost in the bottom 30%. Australia was in the top nine of those 38 OECD members on annual GDP growth for most of Labor’s last term. In 2009, Australia was top of the table.
Analysis of the 4% Unemployment Rate Claim
Scott Morrison: “We've got unemployment down to 4 per cent and falling.”
If if we accept the 4.0 per cent headline rate, that still ranks 14th among the developed OECD member economies. Under Labor, Australia was consistently in the top eight. Mr. Austin contends that this figure has been significantly influenced by the growth in public service positions as a percentage of the total workforce:
"Yes, but since 2018, when Morrison became Prime Minister, nearly 400,000 Australians doing nothing on the dole have been moved into the public service where they are doing nothing on a government salary. Public servants are up from below 12.0 per cent of the workforce, which had been the level for many years, to 14.2 per cent today. So for valid comparisons with any period before 2018, we must add 2.2 per cent. That comes to 6.2 per cent [4.0 + 2.2 = 6.2], which is quite poor. "
Comparing Severity and Outcomes of the Global Financial Crisis Against the COVID-19 Pandemic
Scott Morrison: “Now, that has happened during a crisis, an economic crisis that was 30 times worse than the global financial crisis (GFC) that Labor faced, and our employment outcomes are 50 per cent better.”
According to Mr. Austin, this is "absolute nonsense":
The GFC was far worse. The COVID downturn was short, sharp and shitty – to deploy the precise technical descriptors – but nowhere near as severe as the recessions of the early eighties, or the early nineties, or the GFC.
Only one OECD member avoided a recession and high job losses during the GFC – Australia. Most economies stayed in recession for between three and eleven quarters and lost vast numbers of jobs. Several countries still haven’t recovered the jobs lost during the GFC.
"And no, employment outcomes are not 50 per cent better. They are substantially worse when adjusted for the blow-out in public service jobs and other factors."
Falsehoods on Government Budgeting
Scott Morrison: “We got the budget back into balance."
This statement is difficult to conclude as factual without utilising a very loose definition of the term 'balance' and is therefore inaccurate. Assuming that a balanced budget is one with no surplus but also no deficit, the closest the Coalition Government has come to 'balance' was a deficit of $690 million in June 2019. Which as Alan Austin points out, constitutes a massive expansion of debt from 16.8 per cent of GDP when the Liberals first took office to 28.8 per cent. This was the highest increase out of all the 36 wealthy member countries of the OECD. The Coalition Government had originally projected a $7.1 billion surplus in 2019-2020.
Falsehoods on Comparative Government Debt
Morrison: “Even our debt, given the massive interventions we've undertaken, is a fraction of what we are seeing overseas.”
According to Mr. Austin, this is a "blatant lie":
"When the Coalition took over from Labor in 2013, Australia’s gross debt was just $271.7 billion. That was 16.8 per cent of GDP. Labor had added $37.05 billion per year in order to get through the worst recession since the 1930s."
From then until August 2018, when Mr. Morrison became Prime Minister and Josh Frydenberg Treasurer, debt increased by $53.4 billion per year to $538.6 billion. Then, through the Morrison period, which included the pandemic, debt blew out by $94.7 billion per year to a total of $869.9 billion as of early April 2022, 39.5 per cent of GDP.
The IMF shows Australia’s gross debt under a Labor government ranked fourth among developed countries for 2012 and 2013. Under the Coalition, It now ranks 23rd.
"There is no question Labor was one of the developed world’s best managers of deficits and debt when in office, if not the best. The Coalition is close to the worst today, if not the worst."
Taxation under Labor vs. LNP
Morrison: “We have cut company tax from 30 per cent to 25 per cent for small and medium sized businesses ... if you're earning between $45,000 and $200,000, you will pay no more than 30 cents in the dollar in tax.”
Mr. Austin says that to state or imply that taxes will be lower under a Coalition Government is "absolutely false." History shows overwhelmingly that the tax take under Labor as a percentage of the nation’s gross national product (GDP) has always been lower than under the Coalition. Many decisions affect taxes actually collected, including bracket creep, changes to deductions allowed, tax avoidance, tax evasion as well as legislated changes to rates such as those Morrison listed.
Scott Morrison 'deceptive' on Jobs Training
Morrison: “We have 220,000 apprentices in trade training right now. That is the highest level of trade apprentices in training since records began in 1963.”
Mr. Austin describes this claim as "highly deceptive," and that the Coalition Government's performance in regards to jobs training has been "poor." It is sensible to assume that there are more apprentices now than 1963 due to the increase in population. "What matters is the proportion of the youth population in gainful apprenticeships," Mr. Austin says:
"Through the last five years of the Howard Coalition Government, an average of 61 young Australians in every thousand served apprenticeships. This rose during the five full years of the Rudd and Gillard Labor Governments to 70. It tumbled over the five years from 2016 to 2020 to just 56."
Falsehoods on Covid Preparedness
In January of this year Australia’s COVID-19 deaths had become the highest relative to population compared to all other 28 major Asia-Pacific nations (with populations above 1 million). According to Mr. Austin, Australia's performance is nowhere near the top in the world:
"In the first three months of 2022, Australia lost 3,971 lives to Covid at a rate of 152 per million. That ranks 16th among developed countries. Nowhere near the leaders."
Falsehoods repeated and reinforced by the media
Mr. Austin described to the friendlyjordies team of how "it is a profound disservice to the nation that mainstream interviewers seldom if ever challenge Coalition ministers on their blatant lies about the economy. But it is truly infuriating is when professional journalists actually repeat and reinforce them:"
Leigh Sales: “Let me put it to you that with the record of performance during Covid which, as you point out, is better than around the world and the economy doing relatively well ...”
In fact, since Mr. Morrison became Treasurer in 2015 the Australian economy has recorded 60 outcomes which are the worst on record. The ABC’s charter requires them to publish this information and, and Mr. Austin claims "they are failing the nation badly by refusing to do so."
Mr. Austin also provided his comments on the state of media scrutiny during the election and Mr. Morrison's claims:
"Of all the falsehoods pushed by the Australian media during election campaigns, arguably the most effective is that the Coalition runs the economy better than the Labor Party. The actual evidence overwhelmingly shows the opposite is true. All the mainstream media, including ABC News and Current Affairs, reinforce this myth routinely. Seasoned editors and finance writers must know it is false. The economics scribes at The Australian, The Australian Financial Review, The Age, The Sydney Morning Herald and the other News Corp and Nine Entertainment dailies are liars. Others, like a good many ABC and commercial radio and TV presenters, have simply been brainwashed over the decades and probably genuinely believe the myth. As a result, Coalition ministers are hardly ever challenged on their continual outrageous lies. A classic example was Leigh Sales interviewing Prime Minister Scott Morrison on the 7.30 Report on 5th April."
The friendlyjordies team would like to sincerely thank Alan Austin for his research and significant contribution to this edition of The Facts.