Jordan has a graph up comparing Real GDP between Australia and NZ from 1977 to 1998. He uses this to blame everything on the nasty right wing reforms and says the more sensible policies of the last few years have closed the gap.
Now let’s look at the three periods in turn – pre 1984, 1985 – 1999 and 2000 onwards.
Jordan shows a similar GDP growth up to 1984. So does this mean he thinks Muldoon was right? Does he hanker for the days of the state setting wages, prices, rents and interest rates? The days of import controls and subsidies?
Then we have 1984 – 1999. It always amuses me as people try to treat this as one period with one Government. There were in fact two, arguably three Governments in that time with very different policies.
Yes from 1984 to 1990 GDP slipped relative to Australia. Well Labour was in power then and sure they did some things right, they also did a fair bit wrong. Then National came into office in late 1990 and by 1992 you see the GDP growth start up and looking much the same rate as Australia. Kept this up until 1996 when we got hit by the Asian crisis and Winston.
But anyway that isn’t even the main thing I wanted to touch on. I was intrigued by why the graph stopped in 1998. Jordan says he hasn’t had time to update it. Well it took me a few minutes but below we see Real GDP, seasonally adjusted, from March 2000 to December 2005. They both start from a base of 100 in March 2000.
Oh yes one can see how well Dr Cullen is closing that gap. Now remember Jordan said “The more sensible policies since have led us to slightly catch up in terms of growth – particularly over the past five years.”
UPDATE: The Australian line looks to be based on nominal, not real, GDP which makes the current graph invalid. It was meant to be real GDP but somehow grabbed the wrong data series. WIll do an updated post later with the corrected figures.No tag for this post.