by Bill Browne, Researcher

In her post-budget interview with Treasurer Scott Morrison, Leigh Sales wondered how much of the budget’s rosier outlook could be attributed to good economic management, and how much was based on factors outside of the government’s control.

Well, she put it more colourfully — asking the Treasurer: “Has your derrière had a lucky encounter with a rainbow?”

Perhaps unsurprisingly, Mr Morrison did not give the rainbow much credit — but Leigh Sales’ thinking was very much in line with my colleague Jim Stanford’s work on economic management by Prime Minister.

Jim Stanford’s 2016 report — available at the Centre for Future Work’s website here — compares each Prime Minister since World War II against a dozen indicators of economic performance.

Jim Stanford points out that Australia’s strongest growth happened when:

  • taxes were higher (especially on businesses and high-income individuals),
  • collective bargaining coverage was near-universal, and
  • government programs (and the taxes to pay for them) were growing rapidly.

He ultimately finds that:

There is no obvious correlation between … swings in Australia’s economic history, and the policy orientation of the government that oversaw them.

While governments can do a great deal to affect the quality of our lives and the shape of our economy, much is outside of their control.

In other words: it’s got more to do with the rainbow than it does the derrière.

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