Damned lies and the truth of financial statistics
TATISTICS can be both misleading and alarming.
One set of raw numbers, especially taken out of context, have the ability paint a picture that is far more optimistic – or bleak – than the underlying reality.
This would appear to be the case with the National Accounts data released in recent days, particularly in relation to Queensland.
At a national level they showed Australia’s economic growth slowing to a crawl – only 0.2 per cent in the June quarter; barely a whiff of government spending and a housing boom away from contractionary territory.
In Queensland the measures look, at face value, even worse.
Here the figures show State Final Demand, which measures the sum of government and household consumption expenditure, combined with public and private investment in fixed capital, falling for the fourth consecutive quarter.
In trend terms, State Final Demand in Queensland was down 2.4 per cent year on year.
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Royal com commissions, parl parliamentary inqu inquiries and all ma manner of quasijudi judicial concoctions are now called by ruling administrations to tramp trample adversaries. The evidentiaryevi bar such by a precipitous drop in business investment, which was down 8.4 per cent in the June quarter and a whopping 28.3 per cent over the past year.
There is no doubt that many Queensland businesses are doing it tough, and are inquiries have to hurdle is measured by the issue’s popularity in opinion polls rather than any actual proof a crime may have been committed. A waft, usually fanned by the sensitive noses of conspiracy theorists, will do.
The Abbott Government has spent tens of millions of dollars on such inquiries. Its
aR probe into unions has unearthed some outrageous cases of bullying and intimidatory tactics deployed by the CFMEU but it has fallen short of exposing systemic corruption.
The former Newman government spawned a few inquiries of its own. Its health looking for some clear direction from government when it comes to areas such as taxation relief and industry policy.
Outside the mining sector though, the picture may not be rosy, but nor is it as bleak as the headline numbers might suggest.
The major component of the plunge in business investment was new engineering construction, which was down by nearly 50 per cent year on year.
This doesn’t mean investment across Queensland’s wider economy has ground to a payroll probe produced a useful road map for IT procurement but largely served to just rewind and replay the colossal cock-up.
Amid the fervour of finding itself in power, the Palaszczuk Government has decided to indulge in its own royal commission reckoning.
In perhaps the most illdefined and ill-advised inquiry to date, Labor wants to probe donations accepted and decisions made by the LNP.
In the space of 24 hours this week, Premier Annastacia Palaszczuk and her ministers gave three versions about what the inquiry was all about.
It would mostly be trained on the LNP’s approval of the Acland Stage 3 coal mine and owner New Hope’s donations. It would extend to current and previous Labor administrations. But it may not include union donations.
Throughout the LNP’s term, green groups and a particular shock jock created a stink over Acland’s approval halt, but rather reflects the end of the $60 billion construction phase of the three giant LNG plants in Gladstone and associated infrastructure.
Strip out this massive spike and what you have is business investment in Queensland returning to more “normal” levels.
In fact, in terms of what the statisticians call “private fixed capital formation”, Queensland is still investing at levels higher than those prevailing prior to the Global Financial Crisis.
This sudden drop in activity – from highly and drew a link with hundreds of thousands of dollars in donations.
The fact the vast majority of the money went to the Federal Liberal Party, not the LNP, never mattered.
More significantly, there’s not a shred of evidence to show that proper approval processes were subverted.
Labor originally planned to order the Crime and Corruption Commission to undertake a public inquiry.
The problem is they can’t, unless they get the parliamentary committee that oversees the CCC to issue the order which would be a highly dubious decision.
All the Government can do and should do, is use the same avenue open to everyone else; write to the CCC with whatever evidence (if any) they have and allow the experts to make an assessment.
They seem determined to do more, however, no doubt driven by a desire to even the elevated levels – and the shift to the production phase of the resources boom was always going to occur, regardless of which side of politics was in power, or what policies they adopted.
Bear in mind also that the State Final Demand figures don’t take into account exports, inventories or accurately reflect demand at a local government level.
For that we need to wait for the release of Treasury’s state accounts data, which is likely to paint a far more nuanced picture.