GDP in Oz: an unworthy number

They don’t mention the real numbers, neither Treasurer nor Treasury. The most-favoured term seems to be ‘per cent of GPD’ (at least the spelling is correct). If you seek the value of GDP itself ‘Budget Paper No. 1: Budget Strategy and Outlook 2011–12’, for example, provides no inkling. That way no one can test the truth of many statements. Most important is the notion of growth.

Moreover, in his speech the Treasurer boasted:

Our public debt is a tiny fraction of that carried by comparable economies, . . .

He forbore to observe that this was not the work of the ALP even as it is something for which we may be truly grateful. Instead, he lives by the Keynesian fiction (the fairies at the bottom of the garden are named Maynard, by the way), which so neatly and conveniently dovetails with contemporary, demotic politics like a glove:

And just as deficits are the right thing to fight a global recession, or to rebuild from natural disasters, so too are surpluses right for an economy set to grow strongly again.

Setting aside the fictions of grammar and logic contained in the final clause, it is enough to dismiss the cant of the wonders of deficit financing by government. Hence the question regarding GDP: what are the real numbers over times past and forecast?

For the only thing that has grown over recent years is pubic debt and the current account with it. Thus, for example:

 The current account deficit  is expected to narrow sharply in 2010–11, reflecting the expected increase in the terms of trade, and then widen in 2011–12 and 2012–13, reflecting strong growth in import volumes and the expected gradual fall in the terms of trade.

Intriguing that (you won’t find real numbers for the current account deficit either, let alone national debt).

Some numbers appear for the NBN— not something to be grateful for:

 private sector debt raised by NBN Co will complement Government equity to fund roll-out activities.


So what should one conclude? Simply this: after several years of major government borrowings Australia remains in recession and deeply indebted to others for our standards of living.


Checking ABS figures for GDP, the data cease at December 2010: how can we take seriously figures and assumptions for 2011–12 when the financial year 2010–11 has yet to conclude?


One Response

  1. […] from Maynard surprises. For that look elsewhere. Here, for example: “iPad 2 as fast as Cray 2 […]

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