The Australian stock market is currently trading at the same level it was a decade ago and business investment is in free-fall.
Whatever happened to the “Australia is open for business” catch cry on election night when Tony Abbott steered the Liberal-National Party Coalition to a thumping election win?
Plus, Treasurer Joe Hockey, saying a few weeks after that famous election victory, in a speech in New York that not only was Australia now open for business, but that it was “open for investment and is going for growth”.
These were powerful words, worthy objectives and something that every Australian was hoping would be delivered through a shrewd and pragmatic approach to economic policy.
The rise in business and consumer sentiment was a powerfully positive reaction to the forthright rhetoric on economic policy.
Some two and a half year years after that election win, Australia has a new Prime Minister and Treasurer but the broad economic policy plan of the Coalition government is the same as the one framed and delivered by Abbott and Hockey.
And the results of those economic policies? In terms of “open for business”, the news is not good.
The value of the Australian stock market (the ASX 200) is down by around seven per cent since the election, an ugly result whichever way the numbers are crunched.
It is worth noting that since that time, the US S&P500 stock index has risen by around 13 per cent, which highlights the quite spectacular under-performance of Australian companies since the Coalition has been in office.
This is despite the fact that the carbon price and mining tax were abolished over 18 months ago and that this was meant to be positive for business.
In terms of “open for investment”, the results are a humiliation for the Coalition. According to the Australian Bureau of Statistics private sector capital expenditure survey, business investment has fallen every quarter in trend terms in the two straight years since the election to be down more than 21 per cent.
It is a Great Depression for private sector investment that shows no signs of bottoming out.
The picture is almost as bad for public sector investment, which is the money the government allocated for things like roads, ports, schools, hospitals, rail and other such infrastructure.
The national accounts data shows that the “infrastructure government” that the Coalition made out to be is a fraud.
Public investment has fallen 9.6 per cent since the election despite Mr Abbott’s claim that he was the “infrastructure Prime Minister”.
On any measure, the current Coalition government has failed to deliver.
Importantly, the poor performance of the business sector cannot be explained by the RBA keeping interest rates too high – they have cut them to record lows which has fueled a strong lift in housing activity and low interest rates have been a catalyst for a weaker Australian dollar.
The Aussie dollar, which is down around 23 per cent since the election, is fuelling a lift in tourism, education and niche manufactured exports and has been a significant stimulus to the economy.
Of course, the Coalition government is not to blame for the slump in commodity prices which has had some impact on the markets and the economy.
But it should have known those risks when ramping up its rhetoric and raising expectations that the business sector would be a winner from the change in government back in September 2013.
It clearly hasn’t.