Andrew Leigh

FRYDENBERG IS PLAYING A JAUNTY TUNE ON PICASSO'S VIOLIN

The Canberra Times, 30 October 2019

‘I found a Picasso and a Stradivarius in my attic’, goes the joke. ‘Alas, Stradivarius couldn’t paint, and Picasso made terrible violins’.

The Morrison Government has a similar problem. When it comes to economic growth, what matters to households are their living standards: how incomes are growing on a per-person basis. When it comes to carbon emissions, the big question is how Australia is impacting the planet. So it’s total emissions that count.

But that’s not what the Coalition has been spruiking. When discussing the economy, Treasurer Josh Frydenberg points to ‘28 years of uninterrupted economic growth’ as proof of the economy’s resilience. What he won’t admit is that on a per-person basis, Australia’s gross domestic product (the sum of the economy’s output) shrank over the past year. The nation has been through a ‘per-capita recession’.

Negative growth isn’t just found in the GDP figures. When the Melbourne Institute looked at trends in median household disposable income since the Coalition won office in 2013, it found that the typical household had become poorer, not richer. In 2017, the most recent year available, median household income was lower, after inflation, than it had been in 2013.

How does the government hide these figures? By focusing only on the total size of the economy. With Australia’s population growing at around half a percent each year, the total economy can grow even if living standards aren’t rising.

Immigration has considerable benefits for Australia, but we shouldn’t confuse the economic impact of a new migrant family moving in next door with a pay rise. A bigger pie doesn’t help much if your slice isn’t growing. To focus only on national output, and ignore living standards, is to play fast and loose with statistics.

But the tricky economics gets worse, because when it comes to carbon emissions, the Coalition backflips on its favourite measure. As every school child can tell you, when it comes to carbon emissions, what matters is the total amount of global pollution.

The atmosphere doesn’t care whether world population peaks at 8 billion or 10 billion - what counts is the volume of emissions, and whether they will lead to a temperature rise of 1.5 degrees, 2 degrees or worse.

That’s why, when countries gather for international climate change meetings in places such as Kyoto and Paris, they are expected to make pledges that result in lower total national emissions, not just lower per-person emissions. Other nations want to know how much the United States will cut its emissions, not how much it will cut its emissions per person.

If Australia had gone to these meetings making its pledges on a per-person basis, we would have been laughed out of the room. Advanced nations are expected to take account of population growth when making our commitments. In the case of carbon pollution, it’s the national effort that counts.

Absurdly, whenever the Morrison Government is pressed about the fact that greenhouse gas emissions have been rising ever since they came to office, they fall back on the per-person measure. In June, when the latest figures came out, Minister Angus Taylor boasted: ‘The report shows that emissions per capita and the emissions intensity of the economy were at their lowest levels in 29 years in the year to December 2018’ (despite his obsession with per capita measures, Taylor never admits that Australia’s emissions per person are the highest in the advanced world).

In September, Prime Minister Morrison told the United Nations, ‘Australia is doing our bit on climate change’. But many countries disagree. As Climate Analytics chief executive Bill Hare, observed after the recent UN climate summit, ‘Diplomatic officials from countries that I speak with see Australia as a denialist government’. Experts have rubbished Prime Minister Morrison’s attacks on China’s climate emissions. As the Australian National University’s Frank Jotzo points out, China’s carbon emissions from fossil fuels rose by 2 percent over the period 2013-2018, compared with Australia’s increase of 3.6 percent. People in greenhouses shouldn’t throw lumps of coal.

By touting national totals for economic growth, but per-person figures for carbon pollution, the Morrison Government has things exactly backwards. They’re trying to paint a rosy picture of the total economy growing and per-person emissions shrinking, in order to distract from the fact that living standards are flagging and overall pollution is rising.

Thankfully, many commentators are wising up to these tricks. Increasingly, we’ve seen a focus on average wages, median incomes and poverty rates - metrics that go directly to living standards. And when the government recently tried to spin rising emissions with use of a per-person figure, one report acidly noted, ‘this measure is irrelevant to the nation's progress towards reducing total emissions. Per capita emissions in Australia have generally fallen for several decades under successive governments amid technology advances and as the population grows’.

Used properly, numbers are vital to understanding the world around us. The key is to know what’s being measured, and stay on our guard against those who use statistics to obscure, rather than inform.

Andrew Leigh is the Shadow Assistant Minister for Treasury, and his website is www.andrewleigh.com.

Authorised by Paul Erickson, ALP, Canberra