Blog - The incredible vanishing surplus
Posted on Friday, 2 December 2011
The Treasurer finally admitted it this week: there is an economic crisis in Europe, the world economy is slowing down and Australia will be affected. The government isn’t going to do anything, though. As far as this government is concerned, the carbon tax, the mining tax and the National Broadband Network must still go ahead even though the last thing Australia needs is more tax and more waste – the very things that have got Europe into so much trouble.
There’s no good time to introduce a bad tax. It’s never right to waste money on projects that others could do better. Now is the worst possible time to weaken our economy with counter-productive new taxes and spending that will ultimately make the school hall rip-off look responsible. Unfortunately, the current government can’t help itself. It is addicted to spending and taxing. It makes promises it can’t keep and then pretends that everything is someone else’s fault.
The essential facts behind this week’s crisis mini-budget are that this year’s forecast deficit has blown out from $12 billion to $37 billion in just 12 months. Net Commonwealth debt this year has blown out from $107 billion to $133 billion just since the May Budget, to fund Labor’s on-going spending spree. Despite this, the government is pretending that next year’s forecast surplus will be $1.5 billion courtesy of some very modest savings and some flagrant accounting tricks.
The biggest save, from an increased public service efficiency dividend, is a virtual lift from the Coalition’s pre-election policy that Labor pledged never, ever to implement.
As for accounting tricks, the government’s energy security programme plans to spend $1 billion this year and $1 billion the year after next – but just $1 million next year, the so-called surplus year. I am not making this up! The coal jobs package spend is over $200 million this year and over $200 million the year after next – but just $10 million next year to help get the budget back to surplus. Almost $3 billion of infrastructure projects and carbon tax compensation for households has been brought forward to the current year just so that Labor can save face.
Only Labor could perpetrate this fiscal fiddle without dying of shame. No wonder the Prime Minister has faced no media – repeat none – for at least a week because she wants the mirage of a surplus ultimately to be all Wayne Swan’s fault.
The Treasurer who has given Australia the four biggest deficits in our history now expects us to believe that he will deliver a surplus in year five. This government has proven itself to be much better at predicting a surplus than delivering one.
The Coalition believes that the first challenge for government is to live within its means – as families and other households do. Lower spending means lower taxes and less borrowing means lower interest rates. Lower taxes and lower interest rates mean less pressure on families’ cost of living. Our plan for a stronger economy and stronger Australia involves ending Labor’s waste and getting government spending under control.
2 December 2011