Earth to Josh: Treasurer Frydenberg’s ‘world-leading economy’ claim is false

by | Mar 19, 2021 | Economy & Markets

On key economic variables Australia lags behind 20 comparable advanced economies yet Treasurer Josh Frydenberg repeatedly asserts that Australia outperformed all major advanced economies in 2020. It’s well past time the mainstream media called him out. Alan Austin reports.

A concerted campaign is under way by the Morrison Government and, it seems, most of the mainstream media to advance the ludicrous concept that Australia’s economy is among the world’s best.

Treasurer Josh Frydenberg first made this claim in his speech on the national accounts on December 2 last year. He tentatively asserted, here at the 9 minute 32 second mark, that:

“… the Australian economy has demonstrated its remarkable resilience and Australia is as well positioned as any other nation on earth.”

Remarkably, he wasn’t picked up for his mendacious claim. He has since frequently repeated it.

With no hint of embarrassment, he said in his Tom Hughes Oration in Sydney last week that:

“We have come through this crisis in a stronger position than almost any other nation in the world – both on the health and the economic front. And our economy has recovered strongly, outperforming all major advanced economies in 2020.”

He may be correct regarding the pandemic. But the economic reality is the direct opposite.

Australia did have the world’s best economy from 2009 to 2013. There was no doubt about that. The other countries in the top five – Norway, the United Arab Emirates, Singapore and Switzerland – were a long way behind on all key variables.

Other countries streets ahead

But it is simply false to assert that Australia’s economy “outperformed all major advanced economies in 2020”. At least 20 comparable OECD members and other advanced economies are well ahead of Australia on actual outcomes.

Let’s examine just these five key variables: (1) annual GDP growth, (2) jobless rates, (3) wages growth, (4) the budget deficit and (5) increase in gross debt.

The table below tells a powerful story. In global terms Australia’s results were very ordinary.

Ireland showed Australia what a well-performed economy really looks like; Taiwan and Luxembourg thrashed Australia on all outcomes; the Netherlands had a slightly greater contraction of GDP, but was streets ahead on the other variables; South Korea had similar GDP growth to Australia but much better results on the others; Denmark’s GDP growth lagged Australia’s marginally, but was well in front on all the other markers; Norway’s low wages growth was close to Australia’s, but it outclassed Australia on all others; and New Zealand added slightly more debt but gave Australia a spanking elsewhere.

Economic outcomes 2020

Other economies well ahead of Australia’s on most of these variables, though not all, include Finland, Germany, Israel, Singapore, Estonia, Latvia, Switzerland, Poland, Ukraine, Kuwait and the United Arab Emirates.

Scandalous misrepresentation

So how does Frydenberg get away with such scandalous misrepresentation, claiming Australia’s economy is “stronger than almost any other nation in the world”?

Primarily, because he knows none of the economics writers in the mainstream media will attempt to correct him. They are all in on the joke.

Even ABC News in its 3rd March analysis of the December quarter growth figures inserted this 13-second clip of Treasurer Frydenberg speaking loudly and forcefully:

“Australia’s performance on both the health and the economic front is world-leading, with our economy outperforming all other advanced economies in 2020.”

It was loud, forceful, highlighted by the national broadcaster – and completely false.


Editor’s Note: this story was produced before yesterday’s unemployment figures. These showed the jobless rate down significantly. The figures however remain distorted by JobKeeper, which comes off at the end of this month.

ABOUT THE AUTHOR

Alan Austin

Alan Austin

Alan Austin is a freelance journalist with interests in news media, religious affairs and economic and social issues. You can follow Alan on Twitter @alanaustin001.

14 Comments

  1. Avatar

    Lies win elections. The MSM runs political cover for the Liberal Party, and will not ask hard questions. Rather, propaganda is the norm.

    The lies will continue with the electorate being disengaged with politics. So much so that they vote against their best interests.

  2. Avatar

    “It was loud, forceful, highlighted by the national broadcaster – and completely false.”
    After the disgraceful treatment of Emma Alberici by the supine and/or partisan ABC hierarchy, nobody is going to call out the treasurer’s bullshit – not if they know what is good for their mortgage.

  3. Avatar

    Both Frydenberg and ScoMo are living in a fantasy world. They think they “walk on water”.

    I can’t wait for the next election. Qld & WA have shown the people’s reactions to their dictator demands, and total failures (despite lying & claiming victories) especially about covid.

    Hard to believe doctors have been threatened if they speak out and tell the truth about the government vaccine policy.

  4. Avatar

    How did they calculate the annual GDP growth rates in the table above?

    My understanding is that Real GDP Growth rates should take into account inflation, etc.
    Not that it affects Australia’s GDP Growth standing that much but Fitch Ratings has the 2020 annual Real GDP growth rates for

    Australia -2.8%,
    Ireland at +3.2%,
    Taiwan at +1.9%. and
    New Zealand’s annual GDP growth rate to the end of Dec 2020 is estimated to be -2.9%..

    • Avatar

      Thanks, Bobserver.
      Annual growth in Australia is simply the percentage difference between the GDP measured for each quarter and the same quarter one year ago. In this analysis, the December quarter was available for all except New Zealand, whose Q4 2021 number should be released any moment.
      All annual growth figures in this analysis are drawn from the same data source (linked in the article) so we assume the calculations are the same, or at least comparable.
      It is true other agencies measure these outcomes differently. Another formula is to measure the percentage difference between the total GDP over the last four quarters and the four quarters the year before.
      The Fitch figures were possibly forecasts rather than actuals.

      • Avatar

        “…Annual growth in Australia is simply the percentage difference between
        the GDP measured for each quarter and the same quarter one year ago….”
        That’s a QUARTERLY growth rate on a “year-over-year” basis not the annual growth rate.

        The simplest calculation of annual growth rate for a country is the NOMINAL one :
        = [ (the current year’s 12 month total GDP – the previous year’s total GDP) * 100 ] / by the previous year’s total GDP

        REAL GDP growth, again as I say, takes into account inflation and other factors particular to a country’s economy. Exchange rates are also important as most comparison growth rates are worked out in USDs.

      • Avatar

        Thanks, Bobserver.
        Yes, agree with that.
        Unfortunately, the international agencies derive annual GDP growth from the quantum for each quarter compared with the same quarter a year earlier. So we are stuck with that formula when making global comparisons, as this article does.
        If we are only looking at percentage increases in GDP, exchange rates are not relevant. But they certainly do need to be monitored as part of the overall assessment of economic management – as this media outlet does from time to time.

      • Avatar

        Of course, much of the GDP growth is driven by the immigration Ponzi. If you use GDP per capita, then analyse whether any growth was down to businesses that created intellectual property, the picture looks quite different. We are good at digging large holes and exporting raw materials, or employing yet more baristas and house-builders, but not so much at innovation and adding value. The so-called growth is a poor platform for a sustainable economy.

  5. Avatar

    Stop press. Late update.
    New Zealand has just released its GDP growth/contraction figures for the 2020 December quarter.
    The percentage change from the same quarter of the previous year is a contraction of 0.9 per cent. That is down from the annual growth recorded in the September quarter of +0.4 per cent, as released three months ago and shown in the chart, above. This was revised today down to +0.2 per cent.
    This does not change the analysis in this article at all, as -0.9 is still better than Australia’s -1.12 per cent. But only just.
    https://tradingeconomics.com/new-zealand/gdp-growth-annual

  6. Avatar

    ‘outperforming all major advanced economies in 2020’

    I guess he regards the countries in this article as minor economies …

    • Avatar

      Thanks, CF. Perhaps.
      South Korea and Germany are larger economies by GDP. Germany, South Korea, Poland and Ukraine have higher populations. Taiwan’s is similar.
      All have much better economic management overall.

  7. Avatar

    The absurdity is that in 2014 we had to have the ‘leaners and lifters’ budget because the ‘age of entitlement’ was over. Labor had apparently blown it with government debt, it was all their fault. Since then the Coalition has blown money like it is water flowing through fingers, and frequently in ways that promote their own party’s longevity. Had Turnbull succeeded in passing his trickle down tax cuts to corporations, we’d be even worse off.

    In his last budget Hockey put away $60 million for refurbishments to be made to the Australian Embassy Washington, then miraculously became the new ambassador to the US later that year. He and Corman, like robber barons puffed cigars after their first budget celebrating their mutual greatness. Then this year Corman relied on taxpayers to furnish him with a very costly entourage and an air force executive jet to get the top job at the OECD. Who knows how much that cost taxpayers to get him into his newest neoliberal job?

    So much for leaners and lifters.

    But that only refers to lessor mortals.

  8. Avatar

    i dare say others could produce other tables to produce a different result .

  9. Avatar

    Spot on Alan They are all in the joke! Yet this disinformation is designed to create confidence Leading to more spending and eventually more economic activity Self furfilling prophecy

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