No, George

George Megalogenis has an analysis in The Australian that doesn’t stand up to much scrutiny.

New analysis of fiscal policy going back to the 1970s contains a shock for voters who generally rate the Coalition as the better economic manager.

In fact, Labor treasurers have been more frugal, with Paul Keating the only treasurer to cut government spending in real terms, when the economy was growing in the second half of the 1980s.

Mr Swan’s effort at holding the increase in real government spending to 1 per cent a year between 2010-11 and 2014-15 would be the second best on record, if the budget projections hold.

I suspect he did that analysis himself.

The figure below shows the growth in government spending back to the 1970s and is taken from the Budget papers.

The blue line is the one to watch (the red line using the non-farm GDP deflator isn’t used for policy purposes only for comparative purposes). It is hard to say that the ALP are more frugal than the Coalition over that period. But what George M has done is throw away a heap of data. It looks like he has only counted spending when the economy is growing by two percent or more. That distinction is very arbitrary. The notion that Wayne Swan is more frugal than Peter Costello is extraordinarily misleading. As Samuel J keeps pointing out (see here and here) the policy decisions of this government have been to increase spending not decrease spending.
Update I: George M replies in comments.
Update II: I have updated SamuelJ’s graph.

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102 Responses to No, George

  1. JC

    Mr Swan’s effort at holding the increase in real government spending to 1 per cent a year between 2010-11 and 2014-15 would be the second best on record, if the budget projections hold.

    Isn’t the NBN off balance sheet, George? Did you count that as part of the spending?

  2. George is cheering for reduced expenditure. That’s to be commended, no matter what.

    There is a lot of ‘Labor can do no good while the Liberals can do no wrong’ around at the moment. Peter van Onselen had a piece in the Australian on the weekend in which he mentioned the Fraser government, which changed nothing because it thought the only thing wrong with the country was that Labor was in power. We seem to have something like that in Victoria, NSW is looking worrying, and the federal Liberals offer no comfort.

    If George keeps pushing Labor in the direction of cutting spending, even if he has to interpret the figures to do it, all power to him.

  3. Judith Sloan

    I was glad to read your post, Sinc, because when I say Mega’s piece, I thought, Mmmm, looks wrong. Oh so, you take out the massive increase in government spending by the Rudd/Gillard government – because they were battling the recession we didn’t have – then Bob’s your uncle. Or not. Just stupid analysis. And the current 1 per cent is from a much higher base.

  4. JC

    David

    I grant you that the Vic libs are basically New Labor. However I would be giving the NSW libs a little more time than a few weeks in power.

    Secondly people are behaving rationally by looking at labor and the libs in terms of which can do good and which a re seriously bad.

    Howard for all his faults ran a very decent administration, possibly one of the best of all time for a while there.

    These morons are now in the consumer electronics business after having burnt down 200 homes and killed 4 people!

    As the Frogs used to say they understood everything and learnt nothing.

    Labor has no choice but to cut spending seeing it wasted $150 billion and there is more coming from the NBN which Dot promises will never be finished.

  5. JC

    Oh so, you take out the massive increase in government spending by the Rudd/Gillard government – because they were battling the recession we didn’t have – then Bob’s your uncle. Or not. Just stupid analysis. And the current 1 per cent is from a much higher base.

    It’s called smoothing. George learnt the practice from the University of East Anglia. Instead of hiding the decline, George is hiding the bump.

    Every self-respecting left-winger smooths now when the glove doesn’t fit the hand. “if the glove don’t fit you have to acquit”.

  6. I don’t deny the current government is seriously bad news. All I’m saying is that George doesn’t deserve a bollocking for cheering baby steps in the direction of fiscal responsibility or showing that Labor is capable or being responsible.

    It’s called positive reinforcement.

  7. .

    What’s that thing you say…change their behaviour, …

  8. Well I’d say we’re stuck with the pricks for two more years. And I’m not convinced the Liberals will be much improvement.

    So, if it works on dogs and pigs …

  9. George Megalogenis

    Hello Sinclair,
    The point of the exercise was to check spending growth in good times. The recessions, GFC and the introduction of the GST were excluded.
    You can put them back in if you wish, but then you wouldn’t be comparing like with like.
    Cheers
    GM

  10. JC

    David

    I don’t think George is doing that at all. He’s offering cover for the ALP by implying… oh if you take this itty bitty spending out (stimulus) and leave the NBN out too the spending spurt doesn’t look at all bad. So as Judith says that masks the fact that spending is now on a higher base.

    He of course is doing this by “smoothing” , which is the old East Anglia University “trick”. This bullshitting shouldn’t be tolerated by anymore and he ought to be treated without total contempt for trying that on.

  11. JC

    Well I’d say we’re stuck with the pricks for two more years. And I’m not convinced the Liberals will be much improvement.

    It may not, you’re right. But right now it looks like there is serious voter support to stop the disgraceful spending. In fact I would venture to say there’s a large part of the Australian electorate that believes that as the ALP campaigned on that theme too prior to 07. Howard was getting shit canned left right and centre for ratcheting up the spending and people were listening.

    If the Libs are lying then we’ll find out.

  12. JC

    Hi George:

    You say

    The point of the exercise was to check spending growth in good times.

    Really? So would you mind telling us what smoothing you carried when the country was buffeted by other externally driven events…

    1. The Asian crisis

    2. The tech crash.

  13. TerjeP

    In 2007 Rudd promised that reckless spending would stop, he projected income tax cuts every year off into the ever never and he said he would take a “meat axe” to the public service. Couple that with the fact that the Hawke / Keating years included some good reforms and the fact that Howard had done some illiberal things. Like propose an Internet filter, ban semi automatic firearms, toy with sedition laws, over ride euthanasia laws in NT, invade Iraq without consulting parliament etc and the case for Labor started looked good. I personally hated Rudd and didn’t preference Labor over Liberal but I can fully understand why some classical liberals would have.

  14. Neil

    All George did was reveal who he votes for.

    Only an ALP supporter would try and make Swan look better than he is.

  15. Milton Von Smith

    What a piece of garbage by George M. The projections in the budget are just that: projections. They are not reality.

    The only thing we know for sure under this government is that spending increased by 17 per cent in real terms in the last two years.

    That is the largest, quickest increase in spending since Whitlam, and the largest absolute increase in spending per person in at least the last 40 years, and perhaps longer.

    Coming off such a high base, spending restraint should be easy. But Wayne Swan and George M. make it sound as if the ALP will achiece some sort of magnificent accomplishment. Rubbish, pure and simple.

  16. JC

    I must say, it would be pretty hard defending Swandive about anything.

    It certainly takes a great deal of courage.

  17. Rafe

    On the topic of the Hawke/Keating reforms, did the Opposition try to block any of them? Even though the wets and dries were still slugging it out until almost 1990.

  18. Abu Chowdah

    All George did was reveal who he votes for.

    Bingo. That’s always been clear from his barracking on the Insiders couch.

  19. Judith Sloan

    The Opposition was calling for even quicker and more radical reforms during the Hawke/Keating years, so that was tremendous political cover for the Labor government. And it didn’t block the reforms that were proposed. It has to be said, they were rare days, however.

  20. Adrian

    2 per cent GDP growth seems arbitary for looking at goverment spending. looks like cherry picking data.

  21. No Worries

    If George was serious about using projections to build his case, he should have consulted the projections for 2011/12 in last four budgets. Inconveniently(for the government and George) the previous budgets remain posted on the budget web site. It’s quite amusing to watch the projections and estimates move both with and against the GDP projections over such a short time frame. If George is prepared to hang his hat on such ephemeral data, then it’s no surprise when his credibility is equated to Swan’s.

  22. m0nty

    Seeing as George is using a subset of figures, isn’t what he is measuring not who the best “manager of money” is in a broad sense, but who is the best Keynesian Treasurer? Reining in public sector spending in a boom is classic Keynesianism. Is that the test he’s deliberately putting on economic performance by restricting his data to boom times?

    I get the feeling this is just one side of what should be a two-sided analysis. If you want to rate economic management, you have to measure performance in recessions as well as booms. You’d probably use different criteria for recessions to fit Keynesian theory, of course, but you shouldn’t leave it out of a comprehensive analysis. How you balance the two data sets is up for discussion, of course. Is it more courageous to be frugal in good times than it is to invest strongly in bad times?

  23. JC

    Seeing as George is using a subset of figures, isn’t what he is measuring not who the best “manager of money” is in a broad sense, but who is the best Keynesian Treasurer?

    Not really. You’re wrong again. He’s trying to create the false impression this government are as virtuous as Mary is to the Catholic Church when it comes to spending. However George got his Mary’s confused when everyone knows they’re like the other Mary before she met Jesus… The town bike.

    Reining in public sector spending in a boom is classic Keynesianism.

    Not really. Reigning spending is always a good objective no matter the when it happens.

    Is that the test he’s deliberately putting on economic performance by restricting his data to boom times?

    Not really. Because it leaves out the reality this government have come straight from a sheltered workshop.

    I get the feeling this is just one side of what should be a two-sided analysis.

    Not really.

    If you want to rate economic management, you have to measure performance in recessions as well as booms.

    Not really. But even so these goons have fucked up things during a recession as well as when our terms of trade have never been better in the nations history. Consequently they are doubly useless. In fact more useless than tits on a bull as perceived by the majority of the voting public.. which you can see from past and present polls.

    You’d probably use different criteria for recessions to fit Keynesian theory, of course, but you shouldn’t leave it out of a comprehensive analysis.

    Not really. That’s just silly.

    How you balance the two data sets is up for discussion, of course. Is it more courageous to be frugal in good times than it is to invest strongly in bad times?

    Not really. Governments should always be frugal. You know that of course.

  24. George Megalogenis

    “Just stupid analysis.”

    “All George did was reveal who he votes for.”

    “Bingo. That’s always been clear from his barracking on the Insiders couch.”

    Sorry, I assumed this was a policy blog. My mistake.

    Whichever way you run this exercise, the spending in the latter part of the Howard government has no precedent in a deregulated economy. The story, and it bears repeating, is that voters were indulged with above-average spending increases in good times when compared to the Fraser, Hawke, Keating and Howard Mark I governments.

    The simplest way to see this is to count the number of households that paid no net income tax. The figure had been stuck at around 38% throughout the 1990s, and into the early part of the last decade.

    In the coalition’s final term it increased by 4 percentage points, or 276,000 households, to 42%. Almost half of those that joined the tax-free club were couple families with dependent children. That’s where the proceeds of the first mining boom went.

    Seriously, what government increases dependency when unemployment is falling?

    Swan has done okay, but that’s all he has done. Conservatives should be pushing him to go further, not engaging in these silly little exercises to shout down someone you don’t like the look or sound of.

    My criticism of Labor has been pretty consistent. Swan should have reduced middle class welfare, not squeezed it over the forward estimates. Otherwise, we are just treading water until the next global shock.

    All the best,
    GM

  25. Michael Fisk

    Conservatives should be pushing him to go further, not engaging in these silly little exercises to shout down someone you don’t like the look or sound of.

    Not at all. We can walk and chew gum at the same time.

  26. JC

    Hi George.

    You’re right. The Howard years were also nothing to write home about in terms of the spending. However a couple of things.

    1. Did you smooth out for the Asian crisis and the Tech crash which were two exogenous hits we took? If not why not like I asked you earlier.?

    2. Howard’s spending, although over the top, seems to have under-girded by stable tax receipts, as shown by the fact that this government drew down on the accumulated spending when they decide to embark on their spending spree in the GFC.

    In other words they (Howard Government) weren’t reliant on boom like tax receipts to support extremely high levels of spending. When that wasn’t enough they didn’t attack an efficient sector such as mining like a bunch of Bedouins in the middle of the night nor did they attempt to impose a carbin tax.

  27. JC

    oops… drew down on the accumulated surplus….

  28. m0nty

    Hey JC: is this the five minute argument or the full half hour? You’re a parody of yourself.

  29. JC

    MonTy

    Grown up are talking. Please get back to the playroom. You’ll be told when you can leave.

    Thanks.

  30. Neil

    Well Swan spent $240B more than Costello did in his first three years compared to Costello in his last three.

    I would think the GFC gave the ALP an excuse to spend big.

    http://www.budget.gov.au/2011-12/content/overview/html/overview_48.htm

    Spending 05-06-07 = $240B+$253+$272B= $765B

    Spending 08-09-10 = $316 + $339B + $352B = $1007B

    $1007B- $765B = $242B

  31. Judith Sloan

    One of the dilemmas for the Howard government when the TOT unexpectedly began to spike was the normal mechanism to spread the gains (and probably destroy those gains) – centralised wage fixation and comparative wage justice – had been (thankfully) ditched.

    With the economy at close to full capacity, the macro-economists were wary about awarding massive across-the-board tax cuts, although some cuts were put in place, lest the economy serious over-heat.

    Costello’s idea was to squirrel the loot away in various funds, including Future Fund but others (eg. higher education, infrastructure, since raided by Labor). But there is no doubt that Howard saw family payments as a means of wooing the middle class (and their votes) – pretty liberally defined. And there is no doubt that it was overdone.

    The best bet for cutting this back was actually Rudd’s first budget – new team in charge, new narrative, etc. – but it was not to be. And then the wheels fell off with the GFC and the narrative changed again.

    I would like to see some serious modelling of the Henry proposals, dramatically simplifying the tax-transfer system and cutting back on family payments dramatically, in part to get rid of the churn. Inevitably, there will be some losers but a strong government would just see this through – the losses are likely to be relatively small. I can’t see it happening under either Labor or Coalition.

  32. Neil

    Whoops. Should have been

    Spending 05-06-07 = $240B+$253+$272B= $765B

    Spending 08-09-10 = $316 + $337B + $350B = $1003B

    $1003B- $765B = $238B

    Still it does seem like an explosion in spending compared to Costello (provided my numbers are correct)

  33. With the economy at close to full capacity, the macro-economists were wary about awarding massive across-the-board tax cuts … lest the economy serious over-heat.

    This is very frustrating. When the economy is going gangbusters they say it’s too stimulatory to cut taxes. When it slumps, they say it would worsen the budget deficit.

    I reckon George makes a very good point. Howard and Costello blew a great opportunity to get the government’s hand out of our pocket. To suggest Swan is orders of magnitude worse is just wrong. A pox on the lot of them, I say.

  34. Sinclair Davidson

    This is not an opportunity to launch into George M – concentrate on the issues.

  35. There, there, there

    Conservatives should be pushing him to go further, not engaging in these silly little exercises to shout down someone you don’t like the look or sound of.

    All sides get aired here, intellectually, robustly with some sarcasm and with humour. When you use the phrase “shout someone down you don’t like the look or sound of” you are probably projecting based on experiences some have had on the couches at Insiders.

    We welcome your input but don’t play the victim, because people don’t automatically kiss ass.

    That is all.

  36. benson

    I was reading that last night and the first thing I thought was “did he forget about the half-decade spending blowout in the early to mid 1990s?” Not to mention the current spending blowout.

    The most obvious problem with the analysis is that it doesn’t adjust for population growth – the most obvious metric to use is real per capita spending growth.

    It’s not the weirdest thing Megalogenis has ever come up with, though. That would have to be his bizarre theory that Liberal voters were going to defect to the Greens in the 2004 election. (No, really. Read that link.)

    Overall, it goes to a deeper problem in Megalogenis’ journalism: he displays a touching faith in hackneyed cliches of dubious accuracy, like the non-existent, media-created demographic of the “doctor’s wife”, a demographic for which no sociological or demographic evidence exists.

  37. benson

    DavidLeyonhjelm:

    When the economy is going gangbusters they say it’s too stimulatory to cut taxes. When it slumps, they say it would worsen the budget deficit.

    And the analogous spending argument, to wit, that a strong economy makes high spending possible, and that a weak economy requires stimulus spending.

  38. JC

    ….like the non-existent, media-created demographic of the “doctor’s wife”, a demographic for which no sociological or demographic evidence exists.

    Bullshit. Quodger is a perfect example of a Doctor’s wife. There are plenty of these dolts around. In fact I would say at least 30% of the Greenslime voters are middle aged Doctors wives.

    I can’t recall where I read it reading, but I read a large part of their voting bloc are older middle class voters from the professional classes most usually retired. Ignorant twats.

  39. benson

    There is no statistical evidence for the “doctor’s wife” as Liberal refugee. The Greens-voting “doctor’s wives”, if they do exist at all, are defectors from the ALP or Greens, not the Liberals.

    The demographic Newspolls/A> make it obvious that the bulk of the Greens’ voter base is people under 40, so the retired/older Greens voters are atypical Greens voters.

  40. benson

    defectors from the ALP or Greens

    That should read “Democrats” intead of Greens.

  41. JC

    How do you know there aren’t any former liberal supporters and stayed there from the link you provided? I can’t see how you can determine that from the inforamtion.

    7% of the 49+ (all) are greenslime supporters. It’s a decent chunk.

  42. benson

    If you look at the Liberal primary vote in core “doctor’s wife” seats (try: Wentworth, North Sydney, Warringah, Bradfield, Berowra, Mackellar and Mitchell for Sydney examples), you’ll see that the Liberal primary vote is very stable in those seats over time (there’s a Liberal blowout in those seats in 2010, but that’s probably just cyclical).

    The exceptions are seats where a strong independent runs (e.g. North Sydney when Mack was member, King in Wentworth in 2004, etc).

  43. benson

    In other words, if there were Liberals defecting to the Greens, you’d expect to see the Greens cannibalising the Liberal primary vote. But they aren’t – they’re only cannibalising the ALP primary vote.

    You could argue that this is a stock vs. flow type problem (to wit, that the “stock” of voters is always changing, as looking at election swings doesn’t tell us about the compositional changes within the stock of voters). For example, you could argue that existing Liberal voters are defecting to the Greens (so Greens vote goes up), new Liberal voters are moving in and/or getting to voting age (Liberal primary vote goes up) and Labor voters are dying off (Labor primary vote falls).

    That would also explain the “Liberal steady, Greens up, Labor down” phenomenon, but it fails Occam’s razor – the simplest explanation for the stable Liberal primary vote in northern Sydney is that the Greens-voting-“doctor’s wife”-as-Liberal-reffo story is a load of balls.

  44. .

    Mackellar had a drop in the Lab vote and a boost to the Greens last time IIRC. But Bishop romped home, with a boost as well, but in 2007 there was a lot more candidates.

  45. benson

    Mackellar is also an exception to the “stable Liberal primary vote” rule of thumb – it seems to have had a primary drift toward the Liberals over the past twenty years.

    Then again, boundaries move with every redistribution, so that makes comparisons over time possibly not so accurate.

  46. JC

    Yea, good sleuthing, Benson. Good work.

  47. Quentin George

    Look at Higgins too – if the Doctor’s wives thing holds true anywhere, it would be Melbourne – but the by-election after Costello’s retirement had an increase in the Liberal primary vote.

  48. JC

    Anecdotally I saw a large number of disaffected ALP voters moving to the Greenslime.

    I think almost all the deadenders at Lavatory Pronto voted Greenslime last time around if I recall correctly. Also as you say if you look at the primary ALP vote, it’s going either to the Greenslime, or those that haven’t yet caught that mentally debilitating virus, moving to the libs.

    The ALP is in a bit of a pickle. Go left and lose more to the Libs, go right and lose to the Greenslime.

    If i were them I would be turning pretty hard right (keating right) making the Slime my enemies rather than my allies and then letting the ball fall where it does.

    They don’t need the slimers as they will be voting ALP as second preference anyway. Duck bum is an appalling politician.

  49. .

    They are ruing the day they let little Richo became a strategy guru. So what if they won in 1987? They’ve been paying for it ever since.

  50. JC

    Look at Higgins too – if the Doctor’s wives thing holds true anywhere, it would be Melbourne – but the by-election after Costello’s retirement had an increase in the Liberal primary vote.

    Yes but I think Higgins was too difficult to figure out because unless I’m mistaken the ALP didn’t run a candidate in that seat and the Slimers ran that nasty bold galoot, Happy Hamilton who ended up getting 35% of the vote.

    I think it would be difficult to tell what the fuck was going on in the by-election although the ALP primary vote increased.

  51. JC

    Oops

    although the LIB primary vote increased.

  52. benson

    Thanks JC. Yes, I have studied this in some detail.

    I’d wager that you’re right, Quentin. I should study the other supposed “doctor’s wife” seats as well, like Kooyong, Higgins and Curtin, possibly Ryan in Brisbane too. I expect they’d be similar because sociological trends are rarely restricted to one city or region in a country. So you’d expect most of Australia to be reasonably similar.

    Melbourne would be hard to draw conclusions on because of the ALP’s strong cyclical position in Melbourne in 2007 and 2010. Cyclical factors throw up artifacts, like that Liberal spike in northern Sydney in 2010. So 2013 should bring a cyclical correction, which might improve the clarity of things.

  53. PSC

    It’s more interesting/relevant to look at government spending as a percentage of GDP.

    Look at the graph on page 4 of this Treasury report on the subject:

    http://www.treasury.gov.au/documents/1352/PDF/03_spending_growth.pdf

    I think the determining factor is if you include recessions in the analysis or not.

  54. Quentin George

    Yes but I think Higgins was too difficult to figure out because unless I’m mistaken the ALP didn’t run a candidate in that seat and the Slimers ran that nasty bold galoot, Happy Hamilton who ended up getting 35% of the vote.

    2009 Federal by-election

    Kelly O’Dwyer 54.6% primary (+1% since 2007 election)
    Clive Hamilton 32.4% primary (+21.7% since 2007)

    No ALP candidate (-31.1%).

    So Hamilton got roughly the ALP vote, +- %.

  55. JC

    PSC

    Why are they calling it “real government payments” in that link? Is there a difference to “spending”. It quite doesn’t pass the smell test to me.

    Is the NBN in there? If not why not? And lastly what about GST? I know of course that goes to the states.

    All this shit doesn’t means squat unless the state spending is in there too as what we should be concerned with at a macro level is ALL government spending, not just federal.

    Here’s an idea. Include GST in those charts and simply assume it was all spent by the states which it was. To a large extent GST is a federal tax anyway.

  56. .

    Quentin,

    Forget that. Remember how much Government spending as a proportion of GDP has risen since (1957-1963) to now. A 135% increase for nothing really.

  57. Alex Pundit

    I noticed Christopher Joye just linked this. If you are still reading the comments Chris, what do you think of the article?

  58. JC

    So Hamilton got roughly the ALP vote, +- %.

    Umm you could argue that. If it’s true and i wish it weren’t it goes to show just how treacherous the ALP voters are when they would prefer to vote for that nasty little douche rather than Kelly. Amazing result.

    However i would say that Happy lost a % of the ALP voters that felt they would vomit on the vote chit than vote for that douche and he still received the slime vote.

  59. Michael Fisk

    The party that succeeds in the years ahead will be whichever party sells itself as the Party Of Cheap Energy. Never let yourself be caught advocating high electricity or petrol prices. The Whitlam coalition served the ALP well, but it is coming apart due to the intractable differences between their constituencies, with the main flashpoint being the Energy Question.

    The Liberals need to lock in about half the blue collar and migrant constituencies, particularly those working in construction and energy, and then brutalise Labor as per usual among the privately-employed middle class professionals, business people, etc. There’s your demographic majority.

    Then you can let Labor keep the dregs of the country, the public sector union members, Green ideologues, Islamic extremists and dole recipients, and laugh as they are totally consumed by the contradictions and general uselessness of their supporters.

    Imagine a gathering of Mark Bahnisch, Keyser Trad, Clive Hamilton and Rob Oakeshott. That’s the future of the Labor Party and “progressive politics” generally, and it doesn’t bode well.

  60. JC

    Imagine a gathering of Mark Bahnisch, Keyser Trad, Clive Hamilton and Rob Oakeshott.

    That’s Tony Jones Q&A panel this evening and Rob Oakeshott is the notional conservative.

  61. Imagine a gathering of Mark Bahnisch, Keyser Trad, Clive Hamilton and Rob Oakeshott. That’s the future of the Labor Party and “progressive politics” generally, and it doesn’t bode well.

    How could you object to that? Sounds unelectable. 🙂

  62. Quentin George

    “However i would say that Happy lost a % of the ALP voters that felt they would vomit on the vote chit than vote for that douche and he still received the slime vote”

    Well, yeah, 1/3 of ALP voters went for the Sex Party or the DLP in preference to Hamilton. And again, this should be where your doctor’s wives effect is at its max.

  63. PSC

    JC – I guess they’re calling it “real” to distinguish it from nominal. Chart 1 includes GST. No idea what the distinction between a “payment” and and “expense” is in government accounting.

    nothing really

    The material increases – under both parties – are in welfare and health expenditure. So to a good degree the baby boomers paying for their parents’ pensions and hospital stays.

    If you want to cut it back to 1960s level dot, you need a plan to deal with poor and sick old people. Who can vote themselves benefits.

  64. JC

    JC – I guess they’re calling it “real” to distinguish it from nominal.

    I wasn’t asking that PSC. But you know that of course.

    Chart 1 includes GST. No idea what the distinction between a “payment” and and “expense” is in government accounting.

    It’s worth knowing because you simply can’t trust anything they say, as it could have a qualifier. We need to confirm that payments = spending otherwise it’s useless without that conformation.

  65. .

    If you want to cut it back to 1960s level dot, you need a plan to deal with poor and sick old people. Who can vote themselves benefits.

    You have been duped.

    We had all of that jazz back then with different names. In the late 1950s/early 1960s, we had a welfare states, state supported tertiary education, socialised healthcare and a much, much larger military equipped with up to date weaponry.

    We get much less out of Government now at a much higher price.

    If only Government as a proportion of GDP in turn resulted in an increase in living standards – Rudd and Gillard would be lauded as the best PMs ever.

    This is nonsense anyway. A few years ago, there was 90 bn in welfare churn.

    In the earlier period, Government expenditure was as low as 17% of GDP. We ought to set a target of 15%.

    This isn’t about services PSC, it is about Governance.

  66. Pickles

    George, you’re in print or on the waves almost daily opining pretty much as you wish.

    You’re what passes for one species of celebrity in this country these days, so don’t moan if on the rarest of occasions when you stick your head up in a forum where instant, uncut feedback is possible, a few might express a firmly held view that you’re a bit of a silly billy.

    Oh, and Barrie Cassidy you are appalling and Ms Tingle the only thing that saves you from ridicule is that you look like a girl I once knew. [Edited for good taste. Sinc]

  67. Labor Outsider

    George is pretty obviously correct in criticising the late Howard years. The textbook response to the revenue boom and strong economy during those years would have been to allow the automatic stabilizers to work and budget surpluses to increase. IMHO those years have taken a lot of the gloss off the earlier Howard years, where significantly more constraint was exercised. Of coure, the debate about the current government’s policies is clouded somewhat by different views about the fiscal stimulus. I think it is certainly true that fiscal policy could and should be even more restrictive than planned. However, the government is doing broadly the right thing in following a period of fiscal stimulus with a long period in which government spending should make a negative contribution to growth. That is a fairly textbook Keynesian approach.

  68. Jacques Chester

    Sorry, I assumed this was a policy blog. My mistake.

    … Conservatives should be pushing him to go further, not engaging in these silly little exercises to shout down someone you don’t like the look or sound of.

    George;

    Everyone gets howled down hereabouts. I own the server, I manage the software, I provide the bandwidth and I cop the odd dose of abuse here and there. I’ve seen every blogger here accused of crypto-leftism. When Howard was still in office he was fairly frequently excoriated (go look the archives in Pandora, I’ll wait).

    Catallaxy Files is a policy blog, but it’s not necessarily a gentleman’s club. More of an unlicensed boxing ring.

  69. George Megalogenis

    Jacques,
    I wasn’t moaning. In fact, I am willing to bet I get more crap on my blog than you do on yours.
    But I snip it because it doesn’t further the debate. For e.g. have a look at what you let through on Laura at 7.53am.
    GM

  70. Sinclair Davidson

    LO – if Treasury had correctly forecast revenue the Howard government could have cut taxes more deeply than they did rather than engage is so many ‘once-off’ give-aways.

  71. Neil

    “The textbook response to the revenue boom and strong economy during those years would have been to allow the automatic stabilizers to work and budget surpluses to increase.”

    Actually the surpluses did increase in case you did not notice. However most Labor supporters have told me Howard should have spent more on infrastructure.

    Basically with ALP supporters the guy cannot win. He either spent too much or too little.

    Also it never occurs to Labor voters that our booming economy was due to good Coalition policy decisions. Apparently it was all due to dumb luck which Labor is no longer getting.

  72. Jacques Chester

    George;

    I’m sure you get some rippers, being so high-profile.

    Just to clarify, while I operate the server, I don’t set the policy. Each of the blogs I host (see the list on the main page) has an independent editorial policy. I don’t interfere.

    For contrast, here are comments policies from Catallaxy Files, John Quiggin and Larvatus Prodeo.

    In talking about myself, I guess my point was that, like Rodney Dangerfield, I don’t get no respect *tie adjustment*.

  73. daddy dave

    Okay, so George’s central point is that he’s dinging Howard/Costello on profligate spending. Who’s gonna disagree with that?

    It seems that his “good times” analysis can be criticised on which years were, or were not, included, but it’s a ballpark analysis to support the thesis that “Howard was no angel on spending either.”

    Which, let’s face it, isn’t exactly wrong.

    The booming economy of Howard/Costello was driven in large part by their good policies. That doesn’t mean they are immune to criticism for spending too much.

  74. .

    George,

    You’ve never had a run in with Graeme Bird so stop complaining. You know nothing about internet cranks.

  75. George Megalogenis

    You think?

    I got this in my inbox the other day, referring to a piece in the weekend paper:

    ” The first murmur of the new xenophobia was apparent in the 2007 election, even as the Chinese- and Indian-born constituents in Bennelong were helping to vote John Howard out of his own seat.”

    So immigrants groups vote as a racial block and you call Anglos zenophobic. You Greeks are some of the greatest parasites on the planet. You come here after we save your arses from ” Adolf” and you have a strong racial cultural glue that would put Nazi racism to shame, and you return home to Greece living off Australian pensions given to you by Anglos

    George, piss off back to your own country.

    … Which is off the point when we are talking government spending. But the tone is not that much different to some of the stuff here. What I’ve found through trial and error on my blog is that those readers who think before they type have a better chance of filling my open mind with something I didn’t know.

    If the guy who spammed me had stopped after the first line, I would have replied with “touche”. But he wasn’t interested in a debate.

    A couple of the posters here just want to belittle. You guys are better than that.

    GM

  76. Sinclair Davidson

    If that’s the worst you’ve ever seen you doing well.

    So man up, ignore the trolls, and engage in those arguments you want to. As one of the more intelligent (and numerate) lefties you should have no trouble holding your own.

  77. .

    Wow, that was pretty unhinged.

  78. .

    Sinclair: It wasn’t loony but Anglos saving the Greeks in WWII?

    The more I read that the less it makes sense.

    But George ought to be desensitised. I have the perfect training camp:

    http://graemebird.wordpress.com/

    Actually, this was a back handed way to see if George had an encounter with him.

  79. Sinclair Davidson

    . – you don’t really expect those sorts of things to make sense do you?

  80. JC

    George

    It still doesn’t beat Birdie’s abuse.

    The dude who rote to you sure doesn’t like Greeks, hey.

    Birdie hates Chinese and Italians but I’m not sure in which order of who comes first.

  81. JC

    Labor Outsider says:

    George is pretty obviously correct in criticising the late Howard years. The textbook response to the revenue boom and strong economy during those years would have been to allow the automatic stabilizers to work and budget surpluses to increase.

    Are you freaking serious,LO?

    They ran surpluses. Comparing that government to these deadbeats isn’t an option for you. It’s not just the spending. It’s also how the spending is financed and these morons have a deficit with spending anchored to bubbly tax receipts. One bad move in China and we’re fucked.

    You ought to return your business diploma, LO.

  82. Abu Chowdah

    … Which is off the point when we are talking government spending. But the tone is not that much different to some of the stuff here. What I’ve found through trial and error on my blog is that those readers who think before they type have a better chance of filling my open mind with something I didn’t know.

    Steady on old bean. You can’t compare some loony emailing you to me saying you barrack for Labor on the Insiders couch. Time and again, you do, leavened with a few “plague on both their houses” non-serious critcisms from the Left.

    Stop being so sensitive and get on with whatever it is you want to say.

  83. Paul Williams

    George, if Labor Treasurers have been more frugal than Coalition, how to explain Costello turning Labor’s $96 billion deficit into a $21billion surplus, and Swan turning that surplus into a $51 billion deficit?

    I agree that the later Howard/Costello govts were too much tax-and-spend, but they were amateurs compared to Rudd/Gillard/Swan.

  84. badm0f0

    … how to explain Costello turning Labor’s $96 billion deficit into a $21billion surplus …

    Perhaps you could explain where you found a deficit of $96 billion?

  85. m0nty

    A couple of the posters here just want to belittle. You guys are better than that.

    Well said, that man.

  86. JC

    It’s accumulated debt, bado, you goose. You trying to deny that now or are you just being an annoying leftie?

    If you can’t be straight up with people here why not simply head back to leftville where that sort of obfuscation bullshit is appreciated.

  87. JC

    montY

    You should be the last person to try and raise standards. In fact you were told yesterday not to interfere as this was an adults thread.

    and why would you. You’re totally ignorant of economics.

  88. badm0f0

    It’s accumulated debt, bado, you goose. You trying to deny that now or are you just being an annoying leftie?

    Which still isn’t the budget deficit (which was around $11b for 95-96/$5b for 96-97)

  89. JC

    So you’re saying you didn’t know what he was talking about, right? No idea

    If that’s true you’re even dumber than I thought you were. You have no “associative skills” at all.

  90. badm0f0

    I knew what he was referring to, I was just inviting him to discover that he was conflating government debt with the budget outcome. In other words, he didn’t know what he was talking about, which is kind of funny given he was having a go at GM for his analytical skills.

  91. JC

    I knew what he was referring to,

    Says it all really.

  92. Capitalist Piggy

    The Budget’s ‘underlying cash balance’ estimate for 2010-11 is -$49.4bn. Currently (year to March 2011) its $60bn. So the govt has just three months to reduce it by $11bn.

    Will they be able to do it?

  93. Sinclair Davidson

    badm0f0 – too cute. Government debt is accumulated fiscal deficits then adjusted for principal repayments and interest. There is a macro identity that I can’t recall exactly at the moment that shows this.

  94. Michael Fisk

    We need to get Homer on here to defend the government.

    Homer? Get over here and defend this government at once!

  95. JC

    Homer’s not allowed back here because he was too disruptively stupid, Fisk.

    He could do a birdie and start his own blog and respond that way.

    Hey Homes.. call it the skanke Ho blog.

  96. Paul Williams

    Ok, maybe I didn’t know what I was talking about.

    Fortunately badmo was able to figure out what I meant.

    So how does that square with Labor being more frugal than the Coalition?

  97. gary

    “It is hard to say that the ALP are more frugal than the Coalition over that period.” No joke.

    Between 1973 and 2011 Labor has accumulated 19.7% of GDP in deficits (@$1.3T GDP => $257B in debt) whereas the Coalition has accumulated 9.9% in surpluses (@1.3T GDP => $129B).

    As expected from casual observation Labor run up debt and the Coalition take a responsible approach and balance the budget and repay debt.

    Having said that there needs to be change to the constitution to restrict govt spending to (say) 20% of GDP.

  98. But she is the dead spit of a girl I once knew.

  99. Sinclair Davidson

    No doubt.

  100. Michael Fisk

    Saying Labor Treasurers are more frugal is as ridiculous as arguing that the ABC is right-wing, or that we need to higher more public servants.

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