This Research Paper, however, does not seek to
explain movement in any of the indicators. Rather, it provides a
summary measure of the performance of each administration by
calculating a number of period averages across a wide range of
indicators. There are, however, some important considerations with
this approach. First, each administration is of a different length
and experiences different phases of the business cycle. Second,
each administration is variously affected by external factors
beyond its control, eg the oil crisis of the 1970s. Third, each
administration inherits a distinctly different legacy and therefore
starts from a very different base. Fourth, it takes time for the
policies of each new administration to take effect and yet the
economic indicators presented here measure performance from the day
each administration took office. Fifth, period averages are
simplistic in nature and ignore major developments that may have
taken place during each administration s term in office. Finally,
the Howard government is still in office and therefore period
averages for this administration, calculated on the basis of the
latest available data at August 2007, may change in the future.
With these qualifications in mind, the major economic indicators,
measured in terms of period averages, are summarised below.
While employment growth was weakest during the
Fraser years, it recovered strongly under Hawke/Keating and has
remained strong under Howard. The proportion of the working age
population in employment was lowest under Fraser and highest under
Howard. The proportion of the working age population in part-time
employment has risen with each administration. While the
unemployment rate was lowest under Whitlam and highest under
Hawke/Keating, it fell under Howard. Despite improvements in the
overall unemployment rate, the teenage full time unemployment rate
has been about the same under Howard as it was under Hawke/Keating.
The long term unemployed as a proportion of the total unemployed
almost doubled under Hawke/Keating compared with Fraser, but then
fell under Howard. Labour productivity growth has averaged around
the same for both the Hawke/Keating and Howard administrations.
The rate of inflation has fallen sharply with
each administration from an annual average of 14.5 per cent under
Whitlam to 2.5 per cent under Howard. Real wages, measured in terms
of non-farm compensation per employee, rose by an average of 4.7
per cent per annum under Whitlam, but then slowed under Fraser and
even fell slightly under Hawke/Keating. Real wages have grown an
average of 1.7 per cent per annum under Howard.
The average standard of living for all
Australians as measured by real gross domestic product (GDP) per
capita [1] has
improved steadily with each administration from $25 000 per annum
under Whitlam to $41 000 under Howard. The rate of increase in real
GDP per capita was slowest under Whitlam and Fraser at around one
per cent per annum and more than twice this rate under
Hawke/Keating and Howard. Commensurate with this, the rate of
economic growth was considerably slower under Whitlam and Fraser
than it has been under either Hawke/Keating or Howard. National
saving has fallen dramatically since Whitlam with some increase
under Howard, while household saving has fallen sharply under all
administrations. The ratio of household debt to annual gross
household disposable income has more than doubled from 51.8 per
cent under Hawke/Keating to 116.0 per cent under Howard. Interest
payments on debt as a proportion of gross household disposable
income, or the household debt servicing ratio, has risen from an
average of 7.0 per cent under Hawke/Keating to 8.5 per cent under
Howard.
The size of the underlying Commonwealth budget
deficit grew from an average of 0.2 per cent of GDP during the
Whitlam term in office to an average of 1.0 per cent under Fraser
and 1.5 per cent under Hawke/Keating, with the budget in surplus by
an average of 1.0 per cent of GDP under Howard. Commonwealth tax
receipts as a percentage of GDP have grown steadily under each
administration. Real housing interest rates reached a peak during
the Hawke/Keating years, with a significant fall under Howard. Home
loan repayments as a proportion of family income have risen from an
average of 26.6 per cent under Hawke/Keating to 27.9 per cent under
Howard.
Australia s current account deficit has
increased with each administration, rising from 1.3 per cent of GDP
under Whitlam to 4.6 per cent under Howard. At the same time,
Australia s net foreign debt has risen sharply from 7.2 per cent of
GDP under Fraser to 33.5 per cent under Hawke/Keating and 45.0 per
cent under Howard. The foreign debt servicing ratio, or the ability
to meet interest payments on foreign debt from export receipts, has
fallen over the period from Whitlam to Hawke/Keating but has
increased under Howard. The degree of import penetration, as
measured by the imports to sales ratio, has increased with each
administration. The average value of the Australian dollar has
fallen with each administration, whether measured relative to the
US dollar or to the currencies of our major trading partners (trade
weighted index).
Economic
indicators
Glossary
Balance on current account.
The difference between payments and receipts in respect of current
transactions between Australia and the rest of the world. A
negative amount, or current account deficit, means that total
payments exceed total receipts.
Business investment. Private
gross fixed capital formation (i.e. expenditure by private firms on
new durable goods and net additions of similar second hand goods)
on other buildings and structures, machinery and equipment,
livestock and intangible fixed assets.
Economic growth. A measure of
the increase in real gross domestic product.
Employed persons. Persons
aged 15 and over who, during a reference period of one week, worked
for one hour or more for pay or worked for one hour or more without
pay in a family business or farm.
Employment to population
ratio. The number of employed persons aged 15-64 years
expressed as a percentage of the civilian population in the same
age group.
Foreign debt servicing ratio.
The interest obligation on foreign debt as a proportion of goods
and services credits (export earnings).
Gross domestic product. The
total market value of goods and services produced after deducting
the cost of goods and services used up in the process of production
but before deducting an amount for depreciation.
Home loan affordability.
Average home loan repayments on new loans as a proportion of median
family income.
Household debt ratio. The
amount of household debt at a point in time expressed as a
percentage of the annual gross disposable income of households.
Household debt is the sum of housing and other personal debt,
including securitised debt.
Household debt servicing
ratio. Interest obligations on housing and other personal
debt as a proportion of gross household disposable income.
Household savings ratio. The
ratio of household income saved to household net disposable income.
Net disposable income is the gross disposable income of the
household sector net of depreciation on the capital assets of the
household sector.
Imports to sales ratio. The
ratio of imports to domestic sales. Provides a measure of import
penetration, i.e. the extent to which imports are displacing, or
indicate an absence of, domestically produced alternatives.
Labour force participation
rate. The number of persons in the labour force (i.e.
employed plus unemployed) expressed as a percentage of the civilian
population aged 15 years and over.
Labour productivity. Real
gross domestic product per hour worked in the market sector. The
market sector excludes the following five industries because their
outputs are not marketed: property and business services;
government administration and defence; education; health and
community services; and personal and other services.
Long term unemployed. Persons
unemployed for a period of 52 weeks or more since their last
full-time job. (This definition is the one used by the ABS prior to
April 2001. The definition now in use by the ABS refers to the
period since a person last worked in any job, regardless of whether
it was full time or part time. The earlier definition has been used
here, however, as it provides a much longer time series.)
National saving. The
proportion of net national disposable income that is not spent on
final consumption of goods and services. Net national disposable
income is the gross national disposable income net of depreciation
on the capital assets of the nation.
Net foreign debt. The amount
borrowed from non-residents by residents of Australia, minus the
value of foreign reserves held by the Reserve Bank and minus
lending by residents of Australia to non-residents.
Part-time employment to population
ratio. The number of part-time employed persons aged 15-64
years expressed as a percentage of the civilian population in the
same age group. Part-time employed persons are those who usually
work less than 35 hours a week in all jobs.
Real full time adult ordinary time
earnings. Average gross (before tax) earnings of full-time
adult employees, excluding overtime payments and after adjustment
for inflation.
Real gross domestic product.
Gross domestic product after adjustment for inflation; a measure
used to indicate change in the actual quantity of goods and
services produced.
Real housing interest rate.
Standard variable rate for bank housing loans to individuals for
owner occupation, after adjustment for inflation.
Real large business rate.
Average variable interest rate charged to large businesses for term
and overdraft facilities, after adjustment for inflation.
Real non farm compensation per
employee. Average total remuneration of all non-farm
employees, after adjustment for inflation.
Teenage full time unemployment
rate. The number of 15-19 year olds unemployed and looking
for full-time work expressed as a proportion of the number of 15-19
year olds in the full-time labour force.
Terms of trade. The
relationship between a country s export prices and its import
prices. A fall in the index means that a country must export more
to purchase the same amount of imports.
Trade weighted index. A
measure of the value of the Australian dollar against a basket of
foreign currencies of Australia s major trading partners.
Unemployment rate. The number
of unemployed persons expressed as a percentage of the labour
force. The unemployed are persons aged 15 and over who, during a
reference period of one week, were not employed but had actively
looked for work in the previous four weeks and were available to
start work.
Endnotes