Comparing Australian Macroeconomic Management: Labor versus Coalition

Abstract

This paper attempts to assess the relative performance of the Australian Labor Party (ALP) and the Coalition governments in their management of the Australian macroeconomy. Given the problem of defining an appropriate counter/actual, we make comparisons using a number of different methods. Firstly we compare the averages of the key macroeconomic variables for the period of each government and then compare changes over the tenure of each government. Secondly, we use the method of ‘difference in differences’; that is, we compare the performance of the Australian economy with the US economy. This allows us to control for any features of the world economy that may be driving all the economies. A crude comparison suggests that the Labor party performed better on inflation and the real rate of interest while the Coalition performed better on growth and unemployment. However, there is no clear cut answer.