PETER VAN ONSELEN: The embarrassing list that Albanese and Chalmers do NOT want Aussies to see

On the eve of Treasurer Jim Chalmers’ presentation, which is expected to be a horror mid-financial economic update, The Economist magazine has delivered a scathing assessment of the government’s management of the Australian economy.

Australia will not be in the top 20 performing economies in the world in 2024. It has ranked 21st out of 37 for the past two years, having previously been in the teens.

Australia is far behind other OECD countries such as Spain, Italy, Greece and even Mexico.

Australia’s economic performance is comparable to that of the United States (20th), where Democrats lost the White House in the recent presidential election due to a Trump campaign that condemned their management of the economy, playing on the frustrations of the regular voters. .

The respected magazine blames Australia’s housing crisis for our poor performance this year, citing ‘rising housing costs’ as a key factor behind the country’s economic woes. Other factors weighing on performance include persistently high underlying inflation and dismal economic growth figures.

Tomorrow, Chalmers will provide his final economic update for the year, which is expected to reveal slow growth, rising deficits and out-of-control government spending in areas of recurring expenditure such as the NDIS.

Today he flagged some challenges but tried to use the bad economic news to scare voters that there would be a coalition government “for Medicare, medicine and pensions.” He also tried to strengthen his own economic management credentials by referring to the surpluses previously recorded.

According to updated economic forecasts, a collapse in commodity prices has turned past surpluses into future deficits, as Labor continues to make new spending commitments (such as canceling HECS debt and investing in childcare) despite the accumulation of debt on its watch .

The national debt now exceeds a trillion dollars and rising, while neither major party has yet unveiled a strategy to pay it back.

The annual interest on the debts accrued – without even paying them off – is now one of the largest items in the budget, dwarfed only by social security, health care and defense spending, burdening future generations the unenviable task of ever having to pay the bills. it back.

The Economist’s assessment runs counter to efforts by senior government ministers, including the Prime Minister and Treasurer, to argue that Australia’s economy continues to ‘punch above its weight’. Instead, our position compared to comparable OECD countries has been downgraded.

It’s not the kind of news Labor needs to headline next year’s election, which takes place in the first half of the year. The deteriorating state of Australia’s economy makes it more likely that Labor will rush to the polls before next year’s budget, set for April. Maybe as early as February.

Delivering a full budget with bad economic news just before the election would undermine Labour’s efforts to position itself as the better economic manager during a campaign.

But with the cost of living crisis still raging and Australia stuck in a perpetual cycle of quarterly per capita recessions, there is nothing to hide from the dire state of the national economy. Regardless of when the next election takes place.

Ahead of the 1996 election, Opposition Leader John Howard mocked Prime Minister Paul Keating for providing “five minutes of economic sunshine” before the economy tanked again.

Fast forward to today and the Peter Dutton-led opposition could well do the same in the run-up to the election as Labor looks to build on the twin surpluses it has been handed before all the budget numbers turn red over the next four years.

The deteriorating state of the economy makes it more likely that Labor will rush to the polls before next year’s budget, set for April. Perhaps as early as February, writes Peter van Onselen

The Economist’s scathing assessment coupled with the release of the budget update comes at the same time a new poll shows a majority of Australians are dissatisfied with Anthony Albanese’s performance and believe the country is ‘on the wrong track’ .

The Essential poll also found that 47 percent of Australians believed 2024 was a worse year than they expected.

The survey also found that 68 percent of voters are focused on which party is likely to make them better off when they cast their ballots in the next three years. This sets up a showdown between Albo and Dutton over which party leader is best able to tackle the economic challenges ahead.

The Economist ranks the OECD economies country by country based on the performance of their GDP (economic growth rates), stock markets, consumer prices, unemployment rates and debt levels.

The top 21 countries are Spain, Ireland, Denmark, Greece, Italy, Columbia, Israel, Lithuania, Switzerland, South Korea, Chile, Canada, Sweden, Iceland, Luxembourg, Mexico, Portugal, Czech Republic, Netherlands, USA and Australia.