Australia has undergone an economic revival under his watch, Treasurer Peter Costello says, despite the latest figures showing the economy is struggling and homeowners are continuing to shun malls and shops.
And he said this was largely because of the way he and the federal government had overhauled the nation over the past decade.
But Mr Costello's revival is hitting problems, with the latest national accounts showing the economy grew by a weaker than expected 0.5 per cent in the December quarter.
The growth rate makes Australia one of the slowest growing developed nations in the globe, with annual growth now at 2.7 per cent.
There were downturns in consumer spending with the public, stung by the downturn in the property market and higher petrol prices, continuing to shun the nation's retail outlets.
Costello has done nothing for the economy in the last 10 years, he has basically sat back and watched the private sector operate by itself, taking the credit whenever poorly reported GDP 'growth' figures look cheery. Treasurers do very little to 'manage' any economy, their principal job is to collect taxes for the government and look concerned. It's a myth that they 'manage the economy', and if you listen to and read their speeches very closely, you will realise they never actually make that claim, but they like naive journalists to present that notion to the public for them.
Cheery 'GDP growth' figures were always a sign of empty internal domestic inflation in the housing market, they had nothing to do with increased productivity or real wealth creation for the country as a whole, just more borrowings from the banks. Now the boom has fizzled, the country has to stand on its industries for that elusive glow of 'economic growth'. It's very lucky newly emerging industrial giants like China have pushed commodity prices higher for Australia, or growth would be negative by now. So now the spruikers are advising the horde of slavering property investors to 'invest in Darwin and Perth.' The exploitation and dollar chasing never ends.
Hyperinflated prices for property have impoverished the next generation, who can now no longer afford to shop retail. And remember the Federal Government (Peter Costello) retains negative gearing on investment properties and halved the rate of capital gains tax, making his own contribution to the housing bubble, and doing nothing to prevent it. Also, the First Home Owners Grant (FHOG) also probably further inflated prices in an uncapped free market without government intervention or regulation.
The next thing that will happen while property prices remain so high is that there will be increasing upwards pressure on wages - industrial action from wage workers, and inflationary retail prices from small business.
Finally, the current young generation who were locked out of the housing market and could never afford to invest in the equity of their own home will become pensioners reliant on the Federal Government to pay their rent and otherwise subsidise their old age after they have retired, whereas the current generation of retirees who could afford to buy a house have much lower ongoing living costs. Oh, and there will be the 5% of rich investors who purchased all the housing out from under everyone else as 'investment properties'.
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