The claim

As the federal election campaign swings into gear, the focus of each of the major political parties has been on its opponent's economic track record.

While the Liberals have claimed Labor cannot be trusted to run the economy, Shadow Treasurer Jim Chalmers said in a tweet published on April 26 that voters couldn't believe a word Prime Minister Scott Morrison said about the economy.

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"This Liberal National government has taxed more, borrowed more and spent more than the last Labor government — but delivered less," the tweet said.

Has the Coalition taxed, borrowed and spent more than the previous Labor government? RMIT ABC Fact Check investigates.

The verdict

Mr Chalmers's claim is correct.

Figures on tax, debt and spending as a proportion of GDP have been higher on average under the Coalition government since 2013 than under the last Labor government.

However, it's important to note, as Chris Richardson of Deloitte Access Economics did, that these figures aren't especially useful for assessing which government is the better economic manager.

That question is not the subject of this fact check.

Assessing the claim

In making his claim, Mr Chalmers referred to "this Liberal National government", which Fact Check takes as the period beginning with former prime minister Tony Abbott's election in September 2013, and ending with the present.

Similarly, Fact Check takes "the last Labor government" to mean the entirety of the Rudd-Gillard government from December 2007 to September 2013.

Fact Check has previously analysed claims regarding tax and borrowing (or debt) and spending (government payments).

As Fact Check has often explained, a fair way to make such comparisons over considerable time, in this case 15 years, is to look at each figure as a proportion of gross domestic product, or GDP. Historical figures for taxation, borrowing and spending as a percentage of GDP can be found in the budget papers.

This data is presented in financial years, which doesn't match up neatly with elections.

Financial year 2007-08 has been designated the first year of Labor's government, given that Kevin Rudd was prime minister for most of that year.

Similarly, 2013-14 has been allocated to the Coalition. The election was held only three months into the financial year, and then treasurer Joe Hockey subsequently announced billions of dollars worth of changes to taxes and spending in his December 2013 Mid-Year Economic and Fiscal Outlook.

The most recent financial year for which actual results are available is 2020-21. For completeness, estimates for the financial year about to end will be mentioned but these have not been taken into account in Fact Check's verdict.

The figures

Consistent with previous practice, Fact Check has used the budget category "Australian Government general government sector taxation receipts" to assess the claim from Mr Chalmers that the Coalition has "taxed more" than the last Labor government.

The historical budget data shows these taxation receipts as a proportion of GDP averaged 21.3 per cent in the six financial years under Labor, from 2007-08 to 2012-13, compared with 22.1 per cent in the past eight financial years of Coalition government. If the estimate for 2021-22 were included, the Coalition average would be 22.2 per cent.

In terms of borrowing, debt figures can be expressed in gross terms (the value of government securities on issue) or net debt, which tallies up liabilities (gross debt) and deducts offsetting financial assets.

Net debt is often considered a better indicator of a government's capacity to handle its borrowing.

Both indicators show the Coalition with a higher debt to GDP ratio than the Rudd-Gillard government.

To determine gross debt, Fact Check has used the budget categories "Australian Government general government sector face value of Australian Government Securities (AGS) on issue". Similarly, for net debt the figures are "Australian Government general government sector net debt".

The Rudd-Gillard government's average gross debt was 11.7 per cent of GDP and net debt average was 4.4 per cent of GDP.

This compares with a Coalition average of 28.4 per cent on gross debt and 19.5 per cent on net debt. Including estimates for 2021-22 would increase these figures to 29.6 per cent for gross debt and 20.4 per cent for net debt.

As for spending, both Labor and the Coalition initiated multi-billion dollar emergency fiscal support measures during their respective periods in government.

Labor had to contend with the Global Financial Crisis while the current government had to deal with the economic shock arising from the pandemic.

The goal in both cases was to avert domestic recession — and the likely increase in unemployment — as the economy came under sudden, potentially devastating shocks from external factors.

Fact Check has used the budget category "Australian Government general government sector payments" to assess the claim on spending from Mr Chalmers.

It shows spending under Labor in the six financial years from 2007-08 to 2012-13 averaged 24.5 per cent of GDP compared with 26.2 per cent during the Coalition's past eight financial years, or 26.4 per cent if estimates for the current financial year were included.

Based on all of these calculations, taxation, borrowings and spending were higher on average under the Coalition since 2013 than under Labor over the previous six years.

What the experts say

Two economic analysts who pay close attention to the federal budget are Saul Eslake of Corinna Economic Advisory and Chris Richardson of Deloitte Access Economics.

Mr Eslake says it is "absolutely" correct to say, as Mr Chalmers did, that tax, debt and spending were higher (on average) under the Coalition than under the previous six years of Labor government.

But he said the notion that Coalition governments had "delivered less" was far more problematic: "That is asking, ‘What are you getting for the spending?' — and that's in the eye of the beholder."

Similarly, Deloitte's Mr Richardson said that while data about tax, debt and spending could easily be gleaned from the budget papers, nothing could be said about what the respective governments had "delivered".

But Mr Richardson also highlighted the need for context when considering the data.

"It's a silly comparison to make," Mr Richardson said. "You are comparing a government under the GFC with one that had the pandemic crisis. It does not tell you much at all about Labor or the Coalition as managers."

"The size of the storm [each financial crisis] dominates the underlying answer, and doesn't really tell us anything about the budgetary habits of one side or the other. Australia, in my view, is great at managing a crisis but bad at managing chronic problems such as climate change or economic reform or budget repair."

Mr Richardson said Labor and the Coalition governments both fought their respective financial crises "really well".

"But we struggle more with the chronic challenges, and the big task of the new government will be to successfully engage with chronic problems."

He noted Labor governed through a commodity boom and a global financial crisis, and the Coalition began its nine years "in the grinding aftermath" of that crisis. But he said budget data in isolation does not explain the drivers behind those figures, in particular global economic conditions and commodities prices.

"You can do the numbers," he said. "But if you are assuming that it tells you anything about the values or capabilities of one [political party] or another, then you are missing the point. And the point is: 'It's the economy, stupid'."

"If you believe this [data] has much to do with government capability, of one party or another, then, as a budget economist, I can tell you that's 'hooey'. The global economy is the overwhelming driver."

Principal researcher: Leonie Wood

Sources

• Jim Chalmers, Tweet, April 26, 2022
• RMIT ABC Fact Check, Jim Chalmers says the two highest-taxing governments of the past 30 years have been Coalition governments. Is that correct?, December 13, 2021
• RMIT ABC Fact Check, Jim Chalmers says two-thirds of the debt in the budget was borrowed before the start of the pandemic. Is he correct?, August 13, 2020
• ABC Fact Check, Fact check: Is government spending today higher than it was in the GFC?,  May 31, 2016
• Australian government, Budget 2022-23, Budget Paper No. 1, March 29, 2022