Voters should have questioned and doubted the Coalition’s “strong economy” slogan. If Labor had campaigned on the per capita recession, it would have been in touch with people’s financial insecurity and made voters think twice about the economic management credentials of the government.
As part of this use of facts on the economy, Labor could have highlighted the productivity destroying collapse in business investment under the Liberal’s watch. As a share of GDP, business investment is at a 25 year low, back at the level prevailing in the early 1990s recession.
Campaigning on this fact could have undermined the perception that the economy and business does well under the Coalition. There is no record of anyone in the Labor leadership group mentioning this, even once.
While wages growth was a top tier issue in the election, Labor struggled to show how it would restore wages growth. This cost it dearly.
For Labor, there was a bit of fluffing around with restoring penalty rates and wage subsidies to childcare workers, but it completely and utterly ignored the proven driver of accelerating wages – growing the economy faster.
To tell voters how it could have helped spur economic growth and as a result deliver a pick up in wages, Labor could have spoken of reform to the Reserve Bank of Australia including a reinforced commitment to the existing 2 to 3 per cent inflation target as a means to achieve this. Further, it could have also ramped up its plan for immediate income tax cuts and have them skewed heavily to low income earners who would spend that extra cash and kick start the economy.
These are relatable issues and policy changes that could have seen Labor as the party of strong growth, with a simple and understandable plan for lower unemployment and higher wages growth.
Labor could have even embraced a target for the unemployment rate – something like 4 per cent for 2022 as a show of confidence in its ability to grow the economy and boost wages.
Part of a stronger growth plan could have also reiterated and highlighted enhanced economic linkages into Asia, which is still the fastest growing part of the global economy. Voters know how important Asia is to Australia and it would have been relatively easy for Labor to use this narrative to communicate with the electorate.
`The Coalition’s “strong economy” claims could have been further demolished if Labor campaigned on the current wealth destruction from the collapse in house prices. Prices are down more than 10 per cent, wiping off over half a trillion dollars from wealth.
They could have also spoken of the 1.8 million Australians currently unemployed or underemployed as a sign of a weak, not strong economy.
These are telling facts on the economy that Labor rarely raised in the campaign.
It cost them the election not to campaign heavily on the economy.
The problem with Labor’s willingness to campaign on the economy dates back to former leader Kim Beasley who in the early 2000s, distanced Labor from the massive reform success of the Hawke / Keating era. Labor was meek in the wake of a Coalition campaign at that time about interest rates and Labor’s role in the early 1990s recession.
Labor is still scared.
A large majority of voters judge the Coalition to be better managers of the economy than Labor. This is despite the facts of GDP, employment growth and wages show Labor to be at least as successful in managing the economy.
If Labor want to win the 2022 election, it needs its leader and economic ministers – whomever they are - to be mongrels on the economy. To take the data on the economy and when it is bad, call it out loud and clear. The gap in the electorate’s perception on which side is the better economic manager widened against Labor in the recent campaign.
If it had campaigned on the economy, the per capita recession, household wealth destruction and the 1.8 million Australians not working the number of hours they would wish, the election result might have been very different.
It all goes back to one of the best lessons in modern politics – It’s the economy, stupid!