Anne Garnett

According to the rhetoric of the Gillard government, more particularly the former Treasurer, Wayne Swan, the Australian economy was the envy of the world during their period of government, in terms of economic growth, employment, debt levels and inflation. It is difficult to know if members of the government actually believed this, but they claimed that it was the fault of Australian commentators and the general public for not realising this—almost the ‘Emperor's New Clothes’ in reverse. The reality was that Australia did fare very much better during the post-global financial crisis years, relative to the serious economic problems and government debt inherent in the countries of the European Union, the Slow economic growth and high unemployment of the USA and the rising government debt in a number of Asian economies. The Australian economy was buoyed by the continuing minerals boom, but more broadly faced some persistent internal economic problems including negative productivity growth, below trend economic growth, gradually rising unemployment and falling business and consumer confidence.

John Howard's fourth government has been a period of exceptional economic growth and prosperity. During this term over 855 000 net new jobs were created, unemployment, at just over 4 per cent, hit the lowest rate since 1975, while inflation largely remained within the Reserve Bank of Australia’s target rate of 2—3 per cent (ABS 2007 a; RBA 2007 a). The Howard government stands among the few governments in the world with budget surpluses and among the very few with no net government debt, having inherited a $96 billion debt with annual interest repayments of close to $8 billion when it first came to office in 1996 (Australian Treasury 1998). The total debt was repaid during its fourth term, with the commonwealth now a net lender to the financial sector.