How much do you really know about the state of the economy? Take our quiz and find out!
Will you get a gong from Euromoney or will you have to Fightback!? Is it time to call Khemlani or put some money aside in the piggery? Are you a pre-copernican obscurantist or an envious unthinking person?
Answers at the end — no peeking! Why not post your scores in the comments?
1. How many of these 15 countries have triple A credit ratings and stable outlook with all four major credit agencies — Standard & Poor's, Fitch, Moody's and Dagong?
The USA, Canada, Germany, the United Kingdom, France, Denmark, Austria, the Netherlands, Saudi Arabia, New Zealand, Australia, China, Japan, South Korea and Luxembourg.
(a) all 15 (b) 10 (c) five (d) one
2. The Washington-based free-enterprise organisation Heritage Foundation publishes an annual index of economic freedom. This measures capitalism's ability to "work, produce, consume, and invest in any way they please, unconstrained by the state."
Since Australia changed from the right-wing Howard government to the left-wing Rudd/Gillard regime, Australia's ranking on the freedom index among the 34 Organisation for Economic Cooperation and Development (OECD) nations has:
(a) dropped to the bottom of the table (b) dropped marginally but still somewhere in the middle (c) stayed the same, somewhere in the middle (d) risen to the top
3. By 2007, Australia's level of high technology exports had fallen to US$3.26 billion, the lowest level in three years.
Over the next three years, under Labor, during the worst financial downturn since the Great Depression, high tech exports:
(a) dropped 4 per cent to $3.13 billion (b) stayed at the same level (c) increased 4 per cent to $3.39 billion (d) increased 17.4 per cent to $3.83 billion
4. Tony Abbott told the national press in January, "As long as a carbon tax or emissions trading scheme damages our economy without reducing emissions … it would be crazy to go down that path."
In the first six months of Australia's carbon pricing scheme, carbon dioxide emissions:
(a) rose marginally by 1.2 per cent (b) stayed the same (c) fell marginally by 1.2 per cent (d) fell significantly by 8.6 per cent
5. Only two of the 34 OECD countries survived the global financial crisis with just one quarter of negative GDP growth, avoiding a technical recession.
Curiously, those two are now the only nations with interest rates — hence cost of borrowing and return on savings — in the optimum range between 2.8 per cent and 4.4 per cent.
Australia is one. The other is:
(a) Poland (b) Switzerland (c) Germany (d) Canada
6. Exports of goods and services is a key indicator of an economy's health. Of these 12 powerhouse economies, how many sold more goods and services in 2012's fourth quarter than in the third?
Australia, Denmark, France, Germany, Japan, South Korea, Luxembourg, New Zealand, Norway, Sweden, the United Kingdom, the USA.
(a) all 12 (b) only six (c) two (d) one
7. This follows question 6 about exports of goods and services — an indicator of a sound economy.
The fouth quarter of 2012 was a toughie. Only seven of the 34 OECD countries managed to sell more in 2012's fourth quarter than in the third. Only three managed a 1 per cent gain or better.
Those three were:
(a) Australia, Canada and the Netherlands (b) Australia, the Slovak Republic and Switzerland (c) Australia, Poland and Chile (d) Australia, Singapore and China
Bonus point: One of those nations increased its sales by an impressive 3.3 per cent, more than double the next best result (1.6 per cent). Which one?
8. There have been two extraordinarily costly blunders by treasurers in Australia's history. Both well kept secrets.
One was $4.5 billion in Australia's reserves lost gambling on the foreign exchange markets.
The second was the sale of most of Australia's gold reserves at near rock bottom prices just before the price rose spectacularly — giving more billions to speculators overseas.
Coincidentally (or maybe not) they happened under the same treasurer.
He was:
(a) John Howard (b) Paul Keating (c) Peter Costello (d) Wayne Swan
9. Which prestigious international news journal in February lauded the latest data on Australia's economy?
The article highlighted GDP growth, the lift in exports, record income per person and the stock market surge:
(a) The Wall Street Journal (b) La Tribune (c) Der Spiegel (d) The Washington Post (e) The Huffington Post (f) Bloomberg.com (g) all of the above
10. This follows question 9 regarding international news journals praising Australia's economy.
The essential story was that Australia — alone in the world — registered quarterly GDP growth above 0.5 per cent for the seventh consecutive quarter. And annual growth for 21 consecutive years.
The latest number was 0.6 for the December 2012 quarter. Almost as good as the 0.7 for the September quarter and the same as the 0.6 for the June quarter. All exceeded predictions.
Which of the following headlines was written by a Murdoch editor in Australia:
(a) Australia Expands at Fastest Pace Since 2007 on Exports (b) Australian Quarterly G.D.P. Beats Expectations (c) Australia Has Now Gone 21 Years Without A Recession (d) Economic growth slows in December quarter (e) Australian Dollar up on Strength in Shares, Solid 4Q GDP
11. Shadow Treasurer Joe Hockey told a business conference in Brisbane in February that energy and labour costs are lower in the USA than in Australia, implying input costs were lower generally.
But what about outcomes? On how many of these 25 indicators are Americans faring better than Australians?
1. economic growth 2. gross national income per capita 3. income disparity 4. employment participation 5. unemployment rate 6. women in the workforce 7. superannuation 8. health care 9. pension levels 10. economic freedom 11. interest rates 12. savings 13. home ownership 14. value of the local currency cf the euro 15. value of the local currency cf the UK pound 16. government 10 year bond rate 17. bankruptcies 18. deficit as a percentage of GDP 19. current account as a percentage of GDP 20. debt as a percentage of GDP 21. balance of trade current 22. balance of trade history 23. foreign exchange reserves 24. international credit ratings 25. overall quality of life
(a) Only ten of the 25 (b) Only five (c) One (d) None
12. According to the OECD, overall taxation in Australia increased when the Coalition took office in 1996. Taxes were then higher throughout the entire Howard/Costello period than at any time during the preceding Hawke/Keating years.
Taxation as percentage of GDP reached an all-time high in 2004 at 30.4 per cent.
The tax take then dropped significantly when Labor took office in 2007. For the entire Rudd/Gillard period taxes have been lower than the lowest point during the Howard years.
Which of these untrue statements appears in Tony Abbott's recent speeches:
(a) At the heart of Labor's failure is the assumption that bigger government and higher taxes are the answer to every problem. (b) The government has completely failed to appreciate the iron law of economics that no country has ever taxed its way to prosperity. (c) With a growing economy, it is possible to have lower taxes, better services and a stronger budget bottom line — as Australians discovered during the Howard era. (d) To every issue this government's knee-jerk response is more tax, more regulation and more vitriol. (e) all of the above.
Answers:
1: (d) one. Australia. Five countries in this exclusive club: Singapore, Norway, Sweden, Switzerland and Australia. 2. (d) Australia ranks third in the world and top among OECD nations. 3. (d) increased 17.4 per cent 4. (d) fell by 8.6 per cent 5. (a) Poland 6. (d) one. Australia 7. (b) Australia [3.3 per cent], the Slovak Republic [1.0 per cent] and Switzerland [1.6 per cent]. 8. (c) Peter Costello. Gambling losses here. Gold sales here. 9. (g) all of them 10. (d) in the Sydney Daily Telegraph. The others were: (a) Bloomberg, (b) The New York Times, (c) The Huffington Post and (e) The Wall Street Journal. 11. (d) none. The USA is equal with Australia on two or three indicators, but better on none. 12. (e) all of them.