IFocus
You are arguing with a Galah
- Joined
- 8 September 2006
- Posts
- 7,468
- Reactions
- 4,461
Budget surplus a distant dream as Coalition presides over spending surge
Stephen Koukoulas
http://www.theguardian.com/australi...eam-as-coalition-presides-over-spending-surge
Stephen Koukoulas
In opposition, the Coalition parties had a spokesman for debt reduction. Curiously, it is a position they dropped the moment they won the election and the reasons for doing that now seem clear.
Government debt is rising at a breakneck speed and when the mid year economic and fiscal outlook (Myefo) is released later this month, it will confirm wider budget deficits and rising government debt.
Before the 2013 election Andrew Robb was the opposition spokesman for debt reduction and time and time again, he bemoaned the level of government debt under Labor.
At various times he compared Australia’s debt level to that of Greece and Ireland and in 2012 he made the promise that “the top priority for a Coalition government would be slashing debt … the government should be paying down debt”.
Having now been in government for almost 15 months, the Coalition is floundering hopelessly on this commitment.
The level of gross commonwealth government debt has risen a thumping $75bn to a record $348bn. The level of net government debt has increased by $48bn to a record $226.4bn, according to the latest data up to September 2014. The figure will be higher still when Myefo is released and the forecasts will be for even higher debt.
In terms of ‘paying down debt’, this government has failed.
Unnecessary payments of $8.8bn have been made to the Reserve Bank of Australia. The paid parental leave scheme, roads and infrastructure and defence and border protection are all areas that have seen substantial spending increases.
And the government’s decision to give up scarce revenue with the repeal of the carbon price and mining tax has made the budget position all the more problematic.
The government has also had a hand in trash-talking the economy. By creating a mood of fear about a budget “crisis” or “emergency”, the government has left business investment sliding and consumer sentiment mired in pessimism.
When consumers are pessimistic, they tend not to spend, they building savings and the rate of growth is undoubtedly weaker than it would otherwise be. Weaker economic growth hurts government tax receipts.
This is the first government I can recall that continually talks down the economy in such a savage and persistent way.
Indeed, the way the government is spending and has given up compromising with the Senate on other policy changes, there seems little chance of a budget surplus for many years to come and the level of government debt looks like going up and up and up.
http://www.theguardian.com/australi...eam-as-coalition-presides-over-spending-surge