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Martin misrepresents official opinion of the IMF



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MEDIA RELEASE

THE HON JOE HOCKEY MP

SHADOW TREASURER

Friday, 11 January 2013

MARTIN MISREPRESENTS OFFICIAL OPINION OF THE IMF

The article published by Peter Martin in Fairfax newspapers this morning under the headline ‘Australia’s most wasteful spending came in Howard era, finds IMF’ is a gross misrepresentation of the view of the IMF and their perspective on the economic management of the Howard/Costello Government.

The so-called IMF ‘study’ referred to by Mr Martin is, in fact, a Working Paper prepared by four researchers of the IMF and does not represent the views of the IMF. Page 2 of the Working Paper unequivocally states:

“This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.”1

Any attempt to make this paper look like the official view of the IMF is grossly misrepresenting both the facts and the organisation.

In reality, the IMF holds a diametrically opposite opinion to that insinuated by Mr Martin.

The official view of the IMF regarding the Howard/Costello years is contained in the 2007 Article IV Consultation with Australia.2 The Executive Directors of the IMF noted:

“Executive Directors commended the Australian authorities for their exemplary macroeconomic management, which is widely recognized as being at the forefront of international best practice. Sound fiscal, monetary, and structural policies, against a background of sizable terms of trade gains, have created the conditions for a continued expansion, supported by high employment levels…. Directors praised

1 IMF Working Paper, Fiscal Affairs Department, A Modern History of Fiscal Prudence and Profligacy, January 2013, p2 of PDF version (emphasis added). 2

Official summary of the assessment is provided in IMF Public Information Notice (PIN) No. 07/112, issued on 12 September 2007.

Australia's very strong fiscal position, with fiscal policy firmly focused on medium- and long-term objectives.”3

With specific reference to the periods of ‘profligacy’ accusation levelled by Mr Martin, the IMF noted in 2007 that:

“Additional revenues resulting from the terms of trade boom have been managed prudently, and the 2007/08 Budget continues appropriately to target budget surpluses.”4

The Howard/Costello Government was not only among the most responsible in Australia’s history it was also praised by the IMF as at the forefront of international best practice.

As Treasurer, Peter Costello gifted Labor a $20 billion dollar surplus and no net debt after delivering the four biggest budget surpluses in Australia’s history.

All Wayne Swan has delivered are the four biggest budget deficits in Australia’s history, totalling $172 billion. Australia’s gross debt is now over a quarter of a trillion dollars and Labor is spending $90 billion a year more than the last Budget of the Coalition Government.

It was not John Howard and Peter Costello who wasted billions of taxpayer dollars and maxed out the nation’s credit card on dangerous pink batts and overpriced school halls. Any allegations of profligacy should be levelled against Kevin Rudd, Julia Gillard and Wayne Swan.

[ENDS]

3 IMF Public Information Notice (PIN) No. 07/112, issued 12 September 2007, http://www.imf.org/external/np/sec/pn/2007/pn07112.htm (emphasis added). 4

ibid, emphasis added.