Australia’s remarkable rise in the global economic rankings downplayed by the media

The improvement in Australia's economic fortunes has been overlooked by many in the mainstream media. Why do they consistently ignore the strong performances of Labor governments?

Australia’s ascent in the global economic hierarchy is remarkable, with the country now ranked second among G20 nations for its economic performance, a stark contrast to its 14th place standing in 2021 during the final year of the Coalition’s term. This is an impressive leap from the 107th position out of 116 economies in 2019, illustrating a dramatic turnaround in just a few years. Importantly, these rankings are sourced from the International Monetary Fund, an institution not swayed by partisan influences, countering any notion that the metrics might be biased by leftist think tanks or political agendas.

This upward trajectory has not always been mirrored in the media’s portrayal of economic management concerning the achievements under Labor governments. Historical patterns indicate that since at least 1983—and likely earlier in the 1940s and definitively from 1972—Labor has managed the economy more effectively than the Coalition, especially in periods of long-term governance, such as the Hawke–Keating years between 1983–1996. This was evident when Australia deftly avoided the pitfalls of the 2008 financial crisis, a testament to the economic stewardship of figures like Wayne Swan, whose contributions are often overshadowed by those of Paul Keating, despite both receiving accolades as international finance ministers of the year—a recognition never bestowed upon their Liberal counterparts.

Despite these achievements, there is a pervasive reluctance within the mainstream media to acknowledge Labor’s superior economic management. The narrative often favours the Coalition, despite its spotty record in economic stewardship, marked by ideologically driven policies more suited to times of economic boon rather than hardship. The Coalition’s governance has seen Australia through cycles of economic mismanagement, most notably after the mining boom of the early 2000s, which left enduring budgetary challenges.

Current discussions around economic policy under the Labor government, led by Treasurer Jim Chalmers, reflects a certain level of optimism. His efforts to amend the structural damages wrought by nearly a decade of Abbott, Turnbull, and Morrison’s leadership are commendable, yet the journey toward substantial reform is long and fraught with challenges. This cautious approach reflects a broader awareness that while macroeconomic indicators suggest robust health, public sentiment about economic conditions remains tepid.

As Australia navigates these complex economic waters, the shift from entrenched neoliberal policies to more progressive economic models is gradual but necessary. The transformation towards a New Keynesian framework is emblematic of this shift, indicating a deeper, more systemic reorientation of economic policy thinking that is essential for addressing contemporary economic challenges and ensuring long-term sustainable growth. This transition underscores a crucial moment in Australian economic history, one that requires a nuanced understanding of both the achievements and the ongoing challenges in governance and economic management.

A long-term vision is required to shape Australia’s economic future

This perspective on economic management, voiced by Chalmers during his recent visit to the United States, emphasises the necessity of investing strategically for long-term gains. Chalmers articulates a vision where investments are not just immediate but staggered over time, reflecting a deep understanding of how economies evolve. The planned reforms in the upcoming Australian budgets are described as “big” and “substantial” by Chalmers, yet tempered to unfold across a medium to longer term period. This approach is designed to manage inflation while simultaneously fostering growth, highlighting a strategic patience that aims to match investment impacts with economic cycles.

The areas Chalmers highlights—energy transformation, housing, and human capital—are central concerns, and they represent sectors where Australia has significant potential to leverage its natural and human resources to forge a more dynamic and competitive economy. The emphasis on energy transformation, in particular, speaks to an urgent global need and presents Australia an opportunity to lead in a sector that is increasingly defining economic models worldwide. Such transformation is not only industrial but is fundamentally about reshaping the economic landscape to be more sustainable and resilient.

The need for agility in economic policy highlights a historical lesson: economies that fail to adapt to changing circumstances risk stagnation or decline. Looking at the history of economic performance in Australia, economic successes were often attributed to a single booming sector rather than a diversified approach—agriculture in the 1950s and mining in the early 2000s—and this illustrates the dangers of over-reliance on specific industries. The contemporary Australian economic strategy aims to rectify these past oversights by promoting agility and diversification, ensuring that the economy is robust enough to withstand future challenges.

The call for reforms to be community-focused is also a critical reminder that economic policies must serve the broader population, not just the economic metrics. This principle is fundamental to democratic governance and ensures that economic progress translates into real improvements in people’s lives. What is the point of an economy that ranks second in the OECD if people can’t afford to purchase a home at a reasonable cost, or afford to adequately feed their families? This is the criticism often leveled at neoliberal policies, which often prioritises economic efficiency at the cost of social equity.

The narrative around economic management in Australia often revolves around the dichotomy between the Labor and Liberal parties. On most economic indicators, Labor governments manages the economy better during challenging times—in the early 1970s during the oil crisis; during the recession left behind by the Fraser government in 1983; the global financial crisis in 2008; and now, the dire economic circumstances left behind by nine years of the Abbott–Turnbull–Morrison governments; while the Liberal Party promotes economic conditions that benefit the wealthy and squanders good economic circumstances—and these factors points to a deeper ideological divide over economic policy and its social implications. This ideological battle shapes public perceptions and is influenced by conservative media narratives, often obscuring the underlying economic realities.

This discussion of economic reforms and strategic investments comes at a critical time. As Australia prepares for future budgets under the Labor government—at least one more budget before the next federal election—the focus remains on how these policies will not only enhance economic statistics but also how they will impact the everyday lives of Australians, fostering a more equitable and sustainable future. This ongoing economic recalibration seeks not only to address immediate needs but to lay down the foundational structures that will support future generations. This broad, inclusive approach to economic management, despite often lacking sufficient recognition in the mainstream media, is crucial for building a consensus on the way forward, ensuring that the economy serves all segments of the community.

Economic success and political popularity: the paradox of leadership

The critical dissonance between government performance, public perception, and media representation reveals a complex landscape in Australian politics, particularly with the economy. Despite the Labor government’s strong economic track record as articulated by Treasurer Chalmers and evidenced by significant improvements in the IMF rankings, public approval for Prime Minister Anthony Albanese remains lukewarm.

During the United States Presidential Campaign in 1992, Bill Clinton asserted “it’s the economy, stupid,” suggesting that successful economic management is the number one priority for a political leader and, if this is managed successfully, political success is guaranteed. However, this is not always the case, and it appears that in the case of Albanese—and the broader Labor government—his electorate standing has been influenced by factors beyond economic performance. His support for the Voice of Parliament in 2023, for instance—or his lack of support for the Palestinian cause in Gaza—has been a flashpoint in public opinion, possibly exacerbating his negative approval ratings amidst underlying societal currents. Such complexities highlight that economic achievements alone may not suffice to garner broad public support in a diverse and at times divided electorate.

The negative portrayal of Labor’s economic management by mainstream media also further complicates the public’s understanding and appreciation of the government. Despite Labor’s substantial economic successes, financial publications and broader media outlets often downplay these achievements, influenced by longstanding biases or commercial interests that favour conservative narratives, especially the narratives presented by News Corporation. This skepticism from the media is striking. Critical voices from the Australian Financial Review and News Corporation undermine significant achievements, such as delivering a budget surplus—a long-held gold standard of fiscal responsibility. Yet, when a Labor government achieves this, it is mocked for not using the appropriate fiscal lever at the necessary time.

This media bias not only shapes public perception but also plays into the political dynamics, where divisive figures such as Peter Dutton can achieve a positive approval rating—for the first time ever as leader of the opposition—despite his objectively less competent track record and propensity for social division at every opportunity. This phenomenon highlights the role of media in crafting political landscapes, often irrespective of underlying economic realities.

The upcoming budget in May represents a critical point for the Labor government to reinforce its economic credentials and shift public and media narratives. However, the government’s approach suggests a resolve to prioritise long-term economic strategies over immediate political gains. The decision to ignore the often partisan media critique and focus on sustainable economic policies may ultimately serve the broader interests of the Australian community, and emphasises the need for governance that transcends short-term popularity and remains steadfast in its commitment to national prosperity.

The challenge for the Labor government lies not only in managing the economy but also in navigating the complex pieces of media influence, public perception, and political opposition. The ability to maintain a focus on equitable and sustainable economic policies, despite these pressures, will be crucial for their long-term success and for the advancement of Australia’s national interests. Economic success must be coupled with strategic communication and engagement to truly resonate with and serve the community and the electorate.