The Silent Truth

By Roger Chao The Silent Truth In the tumult of a raging battle, beneath…

Nuclear Energy: A Layperson's Dilemma

In 2013, I wrote a piece titled, "Climate Change: A layperson's Dilemma"…

The Australian Defence Formula: Spend! Spend! Spend!

The skin toasted Australian Minister of Defence, Richard Marles, who resembles, with…

Religious violence

By Bert Hetebry Having worked for many years with a diverse number of…

Can you afford to travel to work?

UNSW Media Release Australia’s rising cost of living is squeezing household budgets, and…

A Ghost in the Machine

By James Moore The only feature not mentioned was drool. On his second day…

Faulty Assurances: The Judicial Torture of Assange Continues

Only this month, the near comatose US President, Joe Biden, made a…

Spiderwoman finally leaving town

By Frances Goold Louise Bourgeois: Has the Day Invaded the Night or Has…

«
»
Facebook

Tag Archives: MYEFO

MYEFO missing points on long-term recovery: ACTU

Unemployment numbers were reported to have improved on Thursday while federal Treasurer Josh Frydenberg claimed that Australia’s economy was rebounding – but the Australian Council of Trade Unions (ACTU) sent out a message of its own: increase wages and help the insecure workforce, and the nation can be guided out of recession.

As the Australian Bureau of Statistics (ABS) was reporting two divergent numbers relating to the nation’s employment figures – unemployment had improved by 0.2 per cent to 6.8 per cent for the month of November, but also noted that underemployment figures had improved by 1.0 per cent to 9.4 per cent – Michele O’Neil, the ACTU’s president, insisted that wage growth was the best way to ensure a faster and stronger economic recovery.

And as O’Neil’s comments come in the wake of Thursday’s Mid-Year Economic and Fiscal Outlook (MYEFO) presentation update by Frydenberg and Simon Birmingham, the government’s minister for finance, she pointed out that the government’s update lends very little hope for those who had sacrificed close to a year of their working lives in 2020.

“The government had an opportunity to show that they do really care about the future of so many unemployed and underemployed Australians, but failed to deliver that today,” said O’Neil.

“We must not forget that 2.2 million Australians will be facing the end of the year with no job or not enough hours, and the government’s mid-year economic statement does not deal with this fundamental issue,” she added.

The ACTU also advised that the nation’s under-employment figures come with a caveat: while it is encouraging that people are returning to work, the government, as well as the ABS, defines anyone who works as little as an hour per week as being employed.

It also said that any current signs of recovery out of a once-in-a-generation recession possess a shaky foundation – of that recovery being quite fragile, warning that the jobless rate could possibly return to COVID-level rates without the proper vision and leadership to create jobs and increase wages.

“They had an opportunity today to redirect unspent JobKeeper to reverse the cut in payments coming at Christmas and to fund programs that would deliver decent secure jobs that help rebuild our economy, but have shirked that responsibility,” said O’Neil.

“Further, there is no plan to lift wages which have now seen eight years of low growth including the lowest on record – and we know that unless workers have confidence to spend the economy will suffer. Instead, the Morrison government has introduced industrial relations legislation which will cut workers take-home pay,” O’Neil added.

Meanwhile, both Frydenberg and Birmingham used the occasion of the MYEFO to thump the collective chest of the Morrison government, claiming that economic recovery is underway.

“Today’s [federal] budget update confirms Australia’s economy is rebounding strongly,” Frydenberg said.

“The updated numbers are encouraging and better than what was expected at budget just ten weeks ago,” the Treasurer added.

“This Budget update tells a story of resilience, of recovery and of Australians getting back to work. Stronger business and consumer confidence means more Australians are in jobs [and] there are fewer demands on government programs and stronger than expected revenue,” said Birmingham, who has forecast that the budget deficit is expected to be $24 billion less than previously anticipated.

“These forecasts, along with the other economic forecasts, stand Australia in incredibly good stead, relative to many other comparable nations. In summary, Australia’s economic and fiscal strength enabled us to enter the COVID-19 crisis with resilience,” added Birmingham.

O’Neil also put the government’s figures – which also included a line from Frydenberg saying it could take up to four years to return the unemployment rate to pre-pandemic levels – in a perspective, that revenue numbers over deficits wouldn’t be possible without tax-related incentives to businesses.

And she feels that a long-term plan for growing the economy, raising wages for all workers, and jobs-based growth has been lost in the government’s feel-good messages.

“The government has chosen the ‘low road’ recovery, with un-tied tax cuts to big business, and failed to deliver a nation-building approach to job growth,” O’Neil said.

Previously, the ACTU had called for the Morrison government to adopt and implement its National Economic Recovery Plan (NERP), a jobs-based economic recovery blueprint geared towards getting Australia out of recession, on several occasions since unveiling it in July.

Areas such as creating more secure jobs, extending childcare and early learning free of charge, investing in job-training facilities and programs, such as the TAFE system, investing in the nation’s university system, and placing a focus on jobs and investment in the manufacturing sector, were among the items on that blueprint.

But as wage growth has stagnated under successive LNP governments since 2013, the view of O’Neil and the ACTU which holds that area as the most critical means of pushing economic recovery is shared by Brendan O’Connor, Labor’s shadow minister for employment and industry.

 

Shadow employment minister Brendan O’Connor, spruiking direct action to combat a jobs crisis (Photo from TWU Vic/Tas)

 

“If the economy was as strong as the Treasurer claims, there wouldn’t still be a million Australians stuck in the jobless queues, 1.4 million workers underemployed and more left out and left behind in this recovery,” O’Connor said earlier in the week.

“While too many Australians and communities are hurting, the Liberals and Nationals are reverting to form and using the pandemic as an excuse to cut workers’ pay, cut super and strip protections from borrowers,” added O’Connor, who earlier in the month announced on behalf of the ALP what it calls a Pandemic Recovery Jobs and Industry Taskforce.

As the ALP’s initiative could be viewed as a complement to the ACTU’s NERP blueprint, O’Connor says it runs counter to what the Morrison government has been alleged to be doing in the heart of a jobs and economic crisis – leaving people to go at it in a survival-of-the-fittest regimen.

“The Taskforce will travel around the country – particularly to outer-metropolitan, regional and rural areas – to hear from employees, employers, unions, industry bodies, academics and experts about what is needed to best respond to the Morrison recession,” O’Connor said.

 

Also by William Olson:

ASIO bill reforms aren’t enough, say MEAA and Greens

Insecure work inquiry forthcoming: Tony Burke

Unflappable unions remain focused versus IR reform bills

ACTU advocating justice calls for on-the-job deaths

Like what we do at The AIMN?

You’ll like it even more knowing that your donation will help us to keep up the good fight.

Chuck in a few bucks and see just how far it goes!

Donate Button

MYEFO will be interesting

The latest Monthly Financial Statement from the government raises some questions regarding their claim/aim to be in surplus and their assertion that they are “paying down Labor’s debt.”

The underlying cash balance for the financial year to 30 September 2019 was a deficit of $13,853 million ie in the first quarter of this financial year, we have spent almost $14 billion more than we have received.

And there are implications for the upcoming MYEFO as budget predictions are falling short.

The net operating balance for the year to 30 September 2019 was a deficit of $15,209 million, which is $2,681 million higher than the 2019-20 Budget profile deficit of $12,528 million. The difference results from lower than expected revenue and higher expenses.

The fiscal balance for the year to 30 September 2019 was a deficit of $14,650 million, which is $928 million higher than the 2019-20 Budget profile deficit of $13,721 million. The difference results from lower than expected revenue, higher expenses and lower net capital investment.

There have also been downgrades for expected wages and GDP growth.

When it comes to debt, as at 30 September 2019, net debt was $401,749 million.

I tried to access historical monthly debt figures to check what the net debt was when the Coalition won office in September 2013, only to find the site has recently been changed and, for some unknown reason, the entire 2013-14 financial year no longer appears.

From memory, net debt was about $161 billion at the end of August 2013, so any suggestion that the Coalition have paid down debt is absolute rubbish. They have increased it by about 250% during a time of global economic recovery.

Whilst the government doggedly stick to their determination to produce a surplus this year, calls for them to increase spending are becoming louder.

We need our own firefighting aircraft. We need to bring forward infrastructure spending. We need to increase Newstart. We need to build affordable public housing, reduce hospital waiting times, and properly resource our public schools. We need to fix the mess the Nationals have made of water management. We need to decarbonise our economy. We need rehab centres and emergency accommodation, particularly in regional areas.

What we don’t need is to waste hundreds of billions on obsolete weapons of mass destruction, billions on consultants and government advertising, and politicians who think attending sporting matches is more important than their day job.

We don’t need a surplus. We need someone who has a clue about how to invest in this country rather than their own political future.

 

Like what we do at The AIMN?

You’ll like it even more knowing that your donation will help us to keep up the good fight.

Chuck in a few bucks and see just how far it goes!

Your contribution to help with the running costs of this site will be gratefully accepted.

You can donate through PayPal or credit card via the button below, or donate via bank transfer: BSB: 062500; A/c no: 10495969

Donate Button

Merry Christmas, Gina and Rupert

If you go to Tony Abbott’s Facebook page, at time of writing, you will find six threads about the Martin Place siege and one about the slaughter of innocent children in Pakistan. Four days after its release, you will not find any comment about Hockey’s MYEFO. That in itself should be cause for concern.

Tony Abbott has admitted he has little interest in the “dismal science” of economics and it appears he is hoping that applies to the rest of us. He is sticking to his forte – death cults and shirt-fronting.

Despite telling us all to carry on our lives as normal, he seems determined to class the acts of one deranged individual as a terrorist attack on home soil.

When Australians responded by showing solidarity with the Muslim community through the “I’ll ride with you” campaign, the odious Miranda Devine found a new target.

“Thus it was that on Monday, while real people were suffering at the hands of an Islamic State-inspired terrorist in Martin Place, hashtag activists sprang to the defence of theoretical victims of an Islamophobia that wasn’t occurring.

The meaningless, narcissistic, one-sided nature of this “near silent encounter” perfectly symbolises the leftist ­approach to Islamist terrorism.

Denial, deflection, projection. They see themselves as morally superior to the rest of Australia, which they imagine as a sea of ignorant rednecks. In their eyes the threat is not terrorism but Islamophobia.”

This view was endorsed by LNP member for Dawson, George Christensen who tweeted:

“#illridewithyou is a typical pathetic left wing black arm band brigade campaign, casting Aussies as racists who will endanger Muslims.”

The colourful characters who frequent Andrew Bolt‘s blog joined in with a barrage of hate.

Whilst Abbott, Devine, Bolt and Christensen continue to pander to the minority of xenophobic racist rednecks, others have been commenting on the policy direction of this government and none of it is good.

Firstly, Joe Hockey has cost us $28.6 billion in foregone revenue over the forward estimates through his own decisions.

Carbon Tax $12.8 billion

MRRT $3.4 billion

FBT on cars $1.8 billion

Tax on super earnings $313 million

Work-related self-education $266.7 million

Closing corporate tax avoidance $775 million

RBA $8.8 billion (classed as foregone dividends)

Add to that his spending on Direct Action, the “war on terror” at home and abroad, and the extra spending on Operation Sovereign Borders and PPL and we would go close to wiping out his deficit of over $40 billion.

So when you hear the girlinator Cormann talking about Layboor’s debt and deficit disaster, understand you are being sold snake oil by a con man.

Speaking of con men, the G20 leaders must be wondering about our commitment to join the war on corporate tax avoidance which has been shown to be yet another example of Joe “over my dead body” Hockey’s ‘tell em what they wanna hear’.

The head of the Australian Tax Office, Chris Jordan, has described a tax lurk for multinational companies that is being retained by the Abbott government as having been “abused” by foreign corporations at a cost of “hundreds of millions of dollars” a year to the Commonwealth but Hockey, following consultation with the big four accountancy firms and the Corporate Tax Association, which represents the biggest listed companies, decided not to tinker with section 25-90 of the act. And they had the hide to criticise Gillard and Swan for caving in on the mining tax though that was one time I found myself in agreement.

And they will have more pressure coming as the world insists that we take action on climate change.

During an appearance before a British parliamentary committee meeting held early Wednesday morning Australian time, British Prime Minister David Cameron was asked by an MP whether there was hope Australia would do more because “the new Australian government is in denial” on the issue.

Mr Cameron did not disagree and told the hearing there was hope Australia would step up its efforts.

“Australia will respond to international pressure and do more on climate change because it will not want to be seen as the ‘back marker’.”

The new revised GP co-payment has also been blasted.

The Australian Medical Association (AMA) has expressed its formal opposition to the Federal Government’s new co-payment model, labelling it a “wrecking ball”.

“That this should be instituted and ready to go by January 19 is, I think, absurd,” Associate Professor Owler said. “Particularly when there has been absolutely no consultation on this issue.”

The OECD was also not impressed with Hockeynomics slamming his budget measures and stating that ‘close monitoring’ was required mentioning everything from changes to Newstart and pensions through to Direct Action, deregulation of uni fees, and choice of infrastructure spending. They were particularly critical of superannuation tax concessions. The overall implication was “you haven’t thought these measures through.”

And as Abbott has his photo taken in front of lots of Christmas trees, presents are being delivered around the country.

Up to 100 ABC journalists have been told they will become redundant and ADF personnel will face rent increases as well as other charges for live in accommodation and meals.

Australia has transformed into the global Scrooge just in time for Christmas, with spending on foreign aid set to plunge compared to other wealthy industrial countries.

An analysis of Treasurer Joe Hockey’s $3.7 billion cut to the aid budget announced on Monday – on top of the $7.6 billion cut in May – reveals that Australia’s generosity towards the world’s poor will fall to an all-time low.

Australia will soon devote a paltry 22¢ cents in every $100 of national income to foreign aid – less than half the amount spent by the Coalition government more than 40 years ago.

This is the news Tony Abbott and his band of elves don’t want you to discuss as they take from the poorest in the world to give generously to wealthy corporations and mining companies. Gina and Rupert should be well pleased.

 

Like what we do at The AIMN?

You’ll like it even more knowing that your donation will help us to keep up the good fight.

Chuck in a few bucks and see just how far it goes!

Your contribution to help with the running costs of this site will be gratefully accepted.

You can donate through PayPal or credit card via the button below, or donate via bank transfer: BSB: 062500; A/c no: 10495969

Donate Button

Message of the day

As Lenore Taylor reported on Friday, every morning the major parties send out the “messages” of the day. These aren’t really super-secret documents since ministers and MPs dutifully recite them into any available open microphone.

At the media briefing after the Coalition’s party meeting the assembled journalists were told, “The prime minister said 2014 had been a very good year for the government and he’s confident next year would be at least as good if not better.”

And last night on Lateline we saw Steve Ciobo dutifully relaying the “message”.

The Abbott government’s plan is THE ONLY PLAN to improve economic growth and repair the budget – regardless of what question is asked, this is to be the reply. They are to repeat over and over again, what a good year it has been.

Look how Scott has stopped the boats. (But don’t look at the offshore gulags where children are locked up in appalling conditions.)

Look at how many Free Trade Agreements Andrew has signed. (But don’t ask for the detail about what we sacrificed for those signatures.)

Look at Julie – isn’t she pretty? (But don’t ask us for foreign aid or any contribution to global action on anything that doesn’t involve bombing people.)

Look at Matthias – there’s a man who knows how to repeat the lines (But any deficit blowout is most definitely not his fault – it’s Labor’s debt and deficit disaster and when you get sick of that it’s Joe’s fault for not selling the message.)

Ciobo slipped right into the script we knew was coming. He said that the Coalition has already cut Labor’s debt by over $300 billion.

That would be a spectacular feat if true since gross debt when they left office was about $280 billion.

PEFO showed that gross debt was expected to climb to $370bn by the end of 2016/17. In Hockey’s MYEFO that figure had grown to $430 billion and then to $450 billion in the budget, and by all accounts it is still growing as we shall see in Hockey’s next MYEFO in a couple of weeks.

So where is Ciobo getting his figures from? This little piece of number gymnastics from Hockey’s budget.

“The published 2013‑14 MYEFO face value of CGS on issue figure of $667 billion in 2023‑24 did not include a cap on tax receipts. The projection for MYEFO in Chart 1 includes a 23.9 per cent of GDP cap on tax receipts, increasing the face value of CGS on issue projected to $748 billion in 2023‑24.

In comparison, at 2014‑15 Budget CGS on issue is projected to be $389 billion in 2023‑24, an improvement of $359 billion. By 2024‑25, the projected end‑of‑year face value of CGS on issue is expected to reach $362 billion.”

When Emma Alberice pointed out that using MYEFO as a basis of comparison was ignoring the Charter of Budget Honesty, and that it contained Hockey’s spending and revenue cutting measures like gifting the RBA almost $9 billion and foregoing the revenue from the carbon and mining taxes and wasting billions on Direct Action, Ciobo just spoke over the top of her saying Labor had left the RBA in a vulnerable position. Tony Burke then tried to point out that the Coalition had taken $1.24 billion in dividends from the RBA this year, something they roundly criticised Wayne Swan for doing, he also was interrupted and spoken over.

The first instalment, over $600 million, has already been paid back to the government in August.

As reported in Crikey:

“When Wayne Swan took a dividend of just $500 million from the RBA in 2012-13, he was accused of “raiding” the bank, by Hockey among others. It was subsequently revealed that Treasury, after consultations with the RBA, didn’t believe there was any imperative to increase the Reserve Bank’s capital buffers. But if $500 million is a raid, over $1.2 billion looks more like open plunder. How dearly Swan would have liked being able to get another $700 million that year. So as some of us predicted back in 2013 Hockey, having blown out the 2013-14 deficit with his $9 billion gift to the RBA and blamed it on Labor, has got his first repayment to bolster the 2014-15 budget bottom line.

Curiously there is no mention of the dividend in RBA governor Glenn Stevens’ foreword to the report, despite discussing how the $8.8 billion had replenished the bank’s capital reserves; you have to go down to page 77 to get an explanation of the dividend. It’s particularly curious given that the dividend — whether one is to be paid or not, and how large it will be — is regularly mentioned in the forewords of previous annual reports. The omission doesn’t help the impression that the whole business of the $8.8 billion has undermined the perception of RBA independence.”

This politicising of independent bodies like the RBA, Infrastructure Australia, NBNco, the CSIRO, the AFP and the ABC, is a very worrying trend designed to keep even more information from the public.

So my “message for the day” is stop the crap Joe and co. If MSM journalists are incapable of exposing the bullshit then step aside – you have made yourselves redundant.

 

Like what we do at The AIMN?

You’ll like it even more knowing that your donation will help us to keep up the good fight.

Chuck in a few bucks and see just how far it goes!

Your contribution to help with the running costs of this site will be gratefully accepted.

You can donate through PayPal or credit card via the button below, or donate via bank transfer: BSB: 062500; A/c no: 10495969

Donate Button

How to pay for a war

The Treasurer said if Mr Shorten was “honest” about his promise of bi-partisan support for Australia’s mission in Iraq, he would pass budget measures currently stalled in Parliament. Is he suggesting that sick people, pensioners, students and the unemployed should fund the war?

I have a suggestion.

When Joe Hockey produced his first fiscal statement in December last year, the deficit over the forward estimates had grown from $54.6 billion in August’s PEFO to $123 billion.

Part of this was due to Joe spending an extra $11 billion in his first 100 days as Treasurer, the most significant payment being the unasked for $8.8 billion gift to the RBA.

But the greatest increases to the deficit (and future debt) came from just changing forecasts. Hockey told us that Labor’s predicitions were unrealistically optimistic, despite the independent PEFO coming up with the same figures.

In almost every parameter, Hockey lowered PEFO forecasts, often dramatically, for the performance of the Australian economy . He insisted on the worst possible forecasts in order to exaggerate the “mess” he inherited.

Real GDP forecasts from PEFO were 2.5% and 3%, written down in MYEFO to 2.5% and 2.5% for the years 2013-14 and 2014-15.

The quarterly national accounts figures show the trend annual real GDP growth of 3.2% which is right on the 25-year average and significantly higher than predicted in either PEFO or MYEFO.

The IMF expects the Australian economy to grow by 2.8 per cent in 2014 and 2.9 per cent in 2015.

As for nominal GDP, PEFO predicted 3.75% and 4.5% – Hockey’s MYEFO 3.5% and 3.5%.

He decreased nominal GDP forecasts to their lowest level since the global financial crisis. This has a massive impact on revenues, which are very sensitive to changes in nominal GDP growth. This had the effect of reducing projected revenue over the forward estimates to $51 billion less than projected in PEFO.

In fact our annual nominal GDP rose by 4%. This is less than the 25-year average of 6.1% but once again, significantly higher than predicted by Hockey and even higher than PEFO.

Joe’s predictions about construction were even worse.

In MYEFO, housing construction growth was reduced to only 3% rather than 5% as forecast in PEFO.

Private dwelling investment actually increased 3.2% in the June quarter and 9.5% in the past year, the strongest pace of growth recorded in the Housing Industry Association Performance of Construction Index nine-year history.

As these few examples have shown, and as was muttered at the time (or shouted loudly by some of us), Hockey’s predictions were unnecessarily pessimistic in an obvious attempt to artificially create the debt and deficit disaster you have when you aren’t having a debt and deficit disaster.

Change a couple of assumptions and hey presto, we’re rolling in money. Bombs away.

Speaking of which, did you hear that the ADF just threw away $400 million worth of missiles that don’t fit their new planes?

You wanna talk waste, start with a group who plan that badly.

Chris Bowen misses an opportunity.

Yesterday Chris Bowen addressed the National Press Club to announce a Labor initiative to have the independent Parliamentary Budget Office prepare the forecasts to be used in government budget and fiscal statements to allow for greater transparency, accountability and rigour.

He started well by talking about the Charter of Budget Honesty and how Joe Hockey has manipulated the figures to inflate the debt and deficit. He mentioned Hockey’s decision to give $8.8 billion to the RBA which was designed to maximise the deficit, attribute it to Labor, whilst hoping for increased dividends in the future. He also mentioned the effect of Hockey’s manipulation of assumptions about key projections like unemployment, inflation, terms of trade, and GDP growth.

Bowen briefly ran over the comparison of PEFO projections with MYEFO – the former being prepared independently by the secretaries of Treasury and Finance, the latter being a propaganda sheet prepared by Hockey and Corman.

I was optimistic for once. This is exactly what needs to be highlighted in the media because it is what this government is basing all its rhetoric on. The attack on the ‘leaners’ is necessary to avoid saddling our children with an unpayable debt. Apparently we don’t mind burdening them with an unpayable personal debt to pay for their tertiary education but we can’t have public debt because…ummm…we are the knights of No and we want a surplus.

But it went downhill from there.

Instead of continuing in this vein, Chris Bowen then went to great lengths to explain that this was not a criticism of Treasury for whom he has the highest regard. He backed away from direct criticism of Hockey’s lies, concentrating on what the PBO would do and who they would collaborate with. This was what stuck in people’s minds. The introductory part of the speech, by far the most important aspect, was forgotten and not one question by the ‘journalists’ afterwards related to Hockey’s deceit.

Straight afterwards on ABC24, Lyndall Curtis interviewed Matthias Corman who had already been out that morning pre-empting Bowen’s speech. In his usual fashion, regardless of what he was asked, Corman repeated his preprepared lines like a doll having the string in its back pulled. “Layboor’s debt and deficit disaster leaving us with $123 billion in deficits, debt spiralling to $667 billion, and no credible path back to surplus.” Despite Chris Bowen’s introduction, Curtis, like all other journalists, allowed this to pass without question.

So there we were, back where we started with Corman’s mantra ringing in our ears.

Bowen’s answers to the questions that were asked was entirely inadequate. Having admitted there was a budget problem, Bowen was asked how Labor intended to address it. His response – “I’m not going to reveal our policies today. We are in the process of carefully developing them and rest assured you will all know them well before the next election and they will be fully costed.” What a fizzer. Where was the vision for the future? Where was the promise of a better way? Where were the ideas even if the detail was still to be determined?

When asked about negative gearing, Chris nearly got a hernia twisting away from the question and talking instead about housing affordability whilst making it clear that he was not suggesting specific changes to taxation. When pressed further about the very low numbers of first home buyers, he waffled on unconvincingly about stamp duty and construction.

The speech was the wrong way around. He should have started with the changes he wanted to make with the PBO and then outlined why he wanted those changes by listing the duplicity engaged in in the preparation of MYEFO.

Just for the record:

PEFO gives independent predictions using Labor policies. MYEFO gives Hockey’s assessment using Coalition policies.

PEFO shows a cumulative deficit of $54.6 billion over the forward estimates with a predicted surplus of $4.2 billion in 2016-17.

MYEFO shows a cumulative deficit of $122.7 billion with no surplus predicted over the forward estimates.

PEFO states, in 2013-14, net debt for the Australian Government general government sector is estimated to be $184.0 billion (11.7 per cent of GDP) and is projected to return to zero in 2023-24.

Hockey’s MYEFO predicts, nay BLARES, a debt of $667 billion. This figure is quoted ad nauseum every time you press the button on Matthias Corman’s belly. This is a projection of the GROSS debt in a DECADE under COALITION policies.

Let me make that absolutely crystal clear…this is a projection of the future with the Coalition’s decisions to axe the carbon tax which, according to MYEFO, “will reduce receipts by $6.3 billion over the forward estimates period” and the repeal of the minerals resource rent tax which “reduces receipts by $3.4 billion over the forward estimates period”. Add in the decisions to repeal the changes to the FBT and superannuation taxation and to gift $8.8 billion to the RBA, and also the payment to Rupert Murdoch of $882 million from the tax department, as well as the PPL that won’t go away and billions for Direct Inaction, and I would contend that Hockey and Corman OWN that projected debt. Increased spending on defence, searching for missing planes, attending memorial services whenever and wherever you can…these are all discretionary decisions made by this government.

Gross debt was approx. $280 billion when the Coalition took over. It is now $337.686 billion. Since September 30 2013, they have been borrowing over $157 million extra a day.

This article quotes the numbers presented in recent fiscal documents. I wish Chris Bowen had rammed it home a bit harder because Joe is setting us up to say “look how much I have saved” when the numbers tell a different story.

Honesty … what’s that?

When the Charter of Budget Honesty was introduced by the Howard/Costello government in 1998 it was intended to provide a framework for the conduct of Government fiscal policy.

“The purpose of the Charter is to improve fiscal policy outcomes. The Charter provides for this by requiring fiscal strategy to be based on principles of sound fiscal management and by facilitating public scrutiny of fiscal policy and performance.”

Broadly speaking, the Charter requires that budgets must be in balance over the course of the economic cycle, which means the government can run a deficit in bad times as long as there’s a surplus in good times. But, as Alan Kohler points out, the problem was it didn’t say how big these should be.

Stephen Anthony of Macroeconomics wrote in a report he did for the Minerals Council of Australia last year:

“Essentially, the fiscal strategy objective (of the Charter) provided the wrong diagnostic tool as a benchmark for success over the business and commodity cycle. As a result, governments spent up big in the boom and got caught on the down side of the cycle. Windfall tax receipts were frittered away.”

According to Macroeconomics, commodity boom windfall revenues contributed around $160 billion to the Commonwealth budget bottom-line up to 2011-12. Yet all that the fiscal strategy required was for the government to run a surplus – of any size.

Because the resources boom led to unexpected returns, there was no danger of being in deficit. Add to this the sale of many assets and there was a motza to play with. The Charter was still adhered to despite a huge spending spree.

The last five budgets of the Howard government contained net discretionary spending of $133 billion and net tax cuts of $117 billion. The structural deficit was set up by John Howard and Peter Costello and not corrected by Kevin Rudd, Julia Gillard and Wayne Swan.

Prior to the 2010 election, Chris Berg of the IPA (and ABC) wrote an article bemoaning the leaking of the then Opposition policy costings.

The Charter allows the opposition to give Treasury its election promises to check the policy costs are correct. If they don’t, the government clobbers them for avoiding scrutiny. Hockey’s figures were subsequently found to have an $11 billion black hole, and the auditors found guilty of professional misconduct. No wonder they didn’t want them released early.

Berg suggested that this part of the charter overwhelmingly favours incumbent governments because they:

“have had three years to consult with Treasury’s nearly 1000 staff about future policies, test policy assumptions, and get Treasury’s recommendations. Much government policy is formulated by Treasury in the first place. By comparison, an opposition is just a few people in a room thinking up ideas.”

From what we have seen of the Abbott government so far, they haven’t expanded their consultative capacity regardless of how many expert public servants are at their disposal and they will sack or ignore anyone who offers advice they don’t want to hear.

In 2004, Ross Gittins wrote ”The government is largely feeding back to the bureaucrats their own costings, whereas the opposition runs a high risk of slipping up somehow and being monstered by the Treasurer.”

To address this problem, in 2012 Labor established the Parliamentary Budget Office.

“The role of the PBO is to inform the Parliament by providing independent and non-partisan analysis of the budget cycle, fiscal policy and the financial implications of proposals.

As set out in the Parliamentary Service Act 1999, the Parliamentary Budget Officer has the following functions:

•Outside the caretaker period for a general election – to prepare policy costings on request by Senators and Members of the House of Representative, with the requests and the PBO’s responses to be kept confidential if so requested by the requestor.

•During the caretaker period for a general election – to prepare costings of publicly announced polices on request by authorised members of Parliamentary parties or independent members.

•To prepare responses (other than policy costings) to requests relating to the budget by Senators or Members of the House of Representatives.

•To prepare submissions to inquiries of Parliamentary committees on request by such committees.

•To conduct research and analysis of the budget and fiscal policy settings.”

One would have thought that the Charter and the PBO would have helped towards keeping the bastards honest but no, both sides still play silly buggers. They are under no compulsion to release costings by a set date and we have been subjected to the debacle of giving interested voters only a day or two to digest the material on many crucial policies. Others, like the NBN or Direct Action, are unable to be costed either due to lack of technical expertise or lack of policy detail. The PPL was based on rubbery assumptions which made the confidence level very low.

And then we have the manipulative approach to reporting that Joe Hockey sells to naïve voters. He pulled some pre-election stunts by using accrual rather than the accepted cash basis.

Image from facebook.com

Image from facebook.com

“Mr Hockey today admitted to using the accrual rather than cash bottom line for their numbers – which makes any figures Mr Hockey produces look much rosier than they actually are. The difference between cash and accrual bottom lines across the forward estimates is $16.6 billion. Were Federal Labor to use an accrual bottom line, it would be in surplus a year earlier, in 2015-16. What this means is that Australians will never truly know the state of the budget under an Coalition Government.”

And now, rather than using the independent PEFO as the true state of the inherited debt and forecast for the future, Hockey is using his propaganda sheet MYEFO, which included his revenue and discretionary spending decisions, as the starting point for comparison of how the government is performing fiscally. MYEFO is effectively saying that, under Coalition policies and spending commitments as they stood in December 2013, the gross debt in ten years’ time would be $667 billion. He then somehow sells that as Labor’s fault. I would love to see the same analysis done to the Howard government – what the debt would have been in ten years if his spending continued unabated. Using actual net debt when referring to the Coalition and projected gross debt when talking about Labor is blatantly designed to misinform.

It was interesting to read in the recent Commission of Audit that they recommend the transparency and rules about fiscal statements need to be tightened up.

“Budget transparency allows for a more informed public policy debate, fosters credibility and helps the community better understand fiscal policy. Improved fiscal transparency can assist in highlighting current and emerging fiscal risks, and in driving the necessary change in the community’s expectations of government.

Improved budget reporting requirements would improve transparency and accountability and assist the government in achieving its medium‑term fiscal strategy.”

They also take a veiled shot at Hockey’s forecasts and express their confidence in Treasury figures.

“Recent budget documents have reported large downward revisions to the economic and revenue forecasts. Against this backdrop, a number of concerns have been raised about the transparency of current forecasting arrangements.

The Review of Treasury Macroeconomic and Revenue Forecasting (Australian Government, 2012) found that ‘Treasury’s forecasts are comparable with, or better than, those of official agencies overseas’.”

The report goes on to recommend some changes.

“One option for Treasury to improve the transparency of budget forecasts would be to require a further formal consultation with a panel of experts before budget forecasts are finalised.

Another option which improves transparency about how the Budget forecasts compare with the views of other forecasters could be achieved by requiring comparisons to be published between key economic forecasts and relevant consensus forecasts.

Confidence intervals could also be published for key forecasts.”

All I can say is good luck with that!

I am expecting General Jim Molan (retired) to be brought out of mothballs (if anyone can find him since he was given $1 million to be our ‘Special Envoy’ smashing the people smuggling business) and given Martin Parkinson’s job at Treasury. Launch Operation Bamboozle where, in the national interest, they will no longer be giving the financial bandits a regular update on fiscal matters.

“The repair job started from day one obviously with the election of the new government but it accelerates from today given that we will see the full extent of Labor’s debt and deficit disaster.” – Tony Abbott, December 2013

MATHIAS CORMANN: “Labor left behind a debt and deficit disaster after completely mismanaging public money over six years in government. We are taking responsibility to fixing up the mess they left behind.” July 16 2014

Joe Hockey: “There’s no crisis at all in the Australian economy,” July 26 2014

Honesty … what’s that?

 

Like what we do at The AIMN?

You’ll like it even more knowing that your donation will help us to keep up the good fight.

Chuck in a few bucks and see just how far it goes!

Your contribution to help with the running costs of this site will be gratefully accepted.

You can donate through PayPal or credit card via the button below, or donate via bank transfer: BSB: 062500; A/c no: 10495969

Donate Button

To my local member

Karen McNamara and Lucy Wicks (Image from dailytelegraph.com.au)

Karen McNamara and Lucy Wicks (Image from dailytelegraph.com.au)

Dear Ms Lucy Wicks,

Thank you for your recent unsolicited advertising pamphlet. Unfortunately it contains a great many errors which I am sure you would prefer to know about rather than spreading incorrect information to your constituents, particularly since we are paying for your advertising.

You state that “Labor’s last Budget” projected a deficit of $50 billion in the 2013-14 financial year with no surplus over the forward estimates. This is entirely untrue unless Mr Hockey is a member of the Labor Party.

The last budget delivered by Labor in May 2013 projected a deficit of $18.0 billion.

In August Penny Wong and Chris Bowen released an updated Economic Outlook with a projected deficit of $30.1 billion moving to a surplus of $4 billion in 2016-17.

PEFO produced by Treasury and Finance in August agreed with the figures in the Economic Statement with a slightly larger projected surplus.

Three months into your term, Joe Hockey produced the MYEFO which estimated a deficit of $47 billion. To quote:

“The deterioration in the underlying cash balance since the 2013 PEFO is $16.8 billion in the 2013‑14 financial year and $68.1 billion over the forward estimates.

The deterioration in the budget position since the 2013 PEFO reflects two key factors:

– the softer economic outlook; and

– essential steps to address unresolved issues inherited from the former government.”

Your projections about a “softer economic outlook” have proven unfounded, as many thought they would, with growth continuing at a better than expected rate.

The “essential steps” you talk about were spending decisions made by the Coalition:

  • an unsolicited $8.8 billion gift to the RBA (with the $300 million a year in interest that loan will cost)

  • another $1.2 billion for offshore processing to go into the hands of security firms that maim and kill refugees.

  • restoring the $1.2 billion offered by Labor to the States who wouldn’t sign up for Gonski but hung out to sign up with you so they didn’t have to commit to increased State funding or performance evaluation.

  • some money into the Contingency Reserve for future superannuation liability for universities (sitting money in a slush fund for a rainy day while we pay interest on it).

  • giving up $2.9 billion in revenue including $1.8 billion in tax revenue from people who fraudulently claim business usage on their cars and $900 million in taxation from people drawing over $100,000pa from superannuation

We then move on to Mr Hockey’s budget brought down in May where we see that, since coming to office, you have borrowed an extra $50 billion – the gross debt has grown from $270 billion in September to over $319 billion. Your claim to be “reducing Australia’s debt” is rubbish as are the figures you use.

Now I have no problem with increasing the debt per se. What I DO have a problem with is you continuing to rail about debt and deficit as you continue to borrow money for the things you choose to spend money on.

And that is by far the greatest problem – not the spending but the priorities. You are inflicting dreadful harm on the most vulnerable in our society while choosing to spend a great deal of money on things we don’t need like school chaplaincy programs and marriage counselling vouchers and fighter jets and very expensive paid parental leave and Royal Commissions. These might be desirable in your opinion but they are hardly more important than education and health and welfare and jobs and affordable housing and childcare. You have cut funding to these most essential services and abolished advisory bodies.

You show your priorities by creating a highly paid job for Tim Wilson to be the Human Rights Commissioner in charge of repealing the racial discrimination laws while sacking the Human Rights Commissioner for the disabled.

You take money away from the Royal Commission into institutional child sex abuse to fund your pink batts political witch hunt.

You cut wage increases for aged care workers to provide bigger subsidies to the providers.

You cut wage increases for child care workers and cut the childcare rebate that parents will receive.

You make changes to the aged pension which, in the future, will increase inequity.

You give drought relief packages to farmers while disbanding water management groups and defunding research into irrigation and delaying the Murray-Darling buyback scheme, with no credible action to address the climate change that will send these very farmers to the wall. The photos of your party laughing and high fiving at the repeal of carbon pricing are looked on in disgust around the world.

You want to pay employers $10,000 to take on workers who are over 50 while telling our young unemployed that they must find a job or face 6 months a year with no income at all and cutting all the programs designed to help them find a job or suitable course.

You defund research causing many amazing programs with huge potential to be cut and scientists to leave our country.

You conscript a Green Army but then defund Landcare, the perfect people to oversee this group, and choose instead to give “service providers” tens of thousands of dollars per team and a free workforce who has no workplace entitlements.

You have slashed funding to Indigenous programs.

You have slashed foreign aid.

Yet you seem to have unlimited resources when it comes to searching for a lost Malaysian plane or fishing boats carrying a few refugees. And the defence budget just keeps on growing so fast they don’t know how to spend it all.

You promise me that my electricity bills will go down but I just got a letter saying prices will go up from July 1.

You say you are helping small business by reducing regulations. Tell that to small businesses involved in the health industry who will now have to administer your co-payment as well as GST. Will they have to fill in cards for concession customers and children to keep count of how many times they have paid a co-payment? Will you be developing and distributing the software to support this?

You claim to be saving $1 billion through cutting red tape for small business…could you tell me what you have done and how you came up with that figure? You cost us all money with the phasing out of the $6,500 instant asset write-off but I am yet to see anything that will help. Reducing company tax doesn’t help sole traders.

You say you are helping apprentices by allowing them to go into debt but you took away their tool allowance.

You say a new Commonwealth agency will open in Gosford bringing 600 new jobs to the coast. For starters, these aren’t “new” jobs as many people from the ATO have been sacked or will be offered relocation. Secondly, I notice you have steadfastly refused to answer any questions about this including why you are apparently building new premises when there are so many vacant already, and when this is likely to happen.

You will also need to adjust your boast about no successful people smuggling ventures. For my views on that I will refer you to Father Rod who was none too happy with the email you sent him from Scott Morrison on the eve of World Refugee Day.

“Firstly, I would like to say to Lucy Wicks that passing on this kind of misleading propaganda does your credibility no good.

Secondly, Mr Morrison has asked that I share this email. I do so gladly so that people may see this dishonest propaganda for what it really is. The use of language is interesting. The basis of this falsehood of that our borders are threatened. How can a few thousand weakened, terrified, dehydrated people threaten our borders? These Asylum Seekers are precisely that Asylum Seekers. They are not invading, or sneaking in or coming through the back door. The very nature of their journey means that the wish to declare their presence.

The entire foundation of the government’s policy is based on the lie that our borders are not secure. And this kind of propaganda is needed to sell the deception.

Not in our name Mr Morrison. You do not lie in our name.”

I have seen you asking Dorothy Dixxers in Question Time. Is that what we elected you to do? To read out lines you have been fed by others? You refuse to answer any questions and gag anyone who posts facts on your facebook page. Is your engagement to be limited to social functions, photo opportunities, and forwarding of party propaganda emails full of lies and distortions?

Your constituents deserve better than unthinking regurgitation. Our children deserve better from the future than what your party is offering. Do you feel no shame about leaving your children a society far worse than the one in which you grew up?

And before you start on the “Labor’s debt” line, I suggest someone in your party starts learning about Modern Monetary Theory and listening about the value of Job Guarantees and raising people out of poverty. Let demand drive supply and provide jobs. Your theory of trickle down economics is a proven front for those who facilitate corporate greed.

You disappoint me.

Kaye

“The visionary lies to himself, the liar only to others.”

The Charter of Budget Honesty was introduced to stop incoming governments from claiming the previous government lied about the true state of the nation’s finances. The heads of the Treasury and the Finance Department are required to put out their own set of numbers, the Pre-Election Fiscal Outlook (PEFO), during the election campaign. This gives a neutral baseline against which we can assess the new government’s figures. PEFO is the only set of Budget forecasts that truly belong to the bureaucrats – all other documents (like the Budget) are issued by ministers.

The outlook in PEFO was remarkably close to the figures in the Economic Statement issued by Chris Bowen and Penny Wong just before the election was called. The public servants in PEFO projected the Budget balance out for a decade. They found that the Budget was on track, before the election, to return to surplus in 2016-17 and keep improving from there, eventually hitting a surplus of about 1% of GDP by 2023 with net debt approaching zero.

Despite the Charter and the neutral numbers in PEFO, Joe Hockey still played the Budget black hole card. The new government’s mini-Budget (MYEFO) contained dramatically bigger deficits than the bureaucrats’ PEFO projections, with no surpluses in sight.

The line Hockey has been pushing is that not only did Labor hide the level of deficits in the current budget cycle, but that it left a series of hidden spending commitments in the unpublished years beyond forward estimates.

“From 2017-18, payments are projected to increase substantially (a real increase of almost 6 per cent in just one year) because Labor back-ended expenditure in a number of key areas and hid it from the public.”

Strange…this member of the public was able to find all those figures without the aid of any staff. In fact PEFO specifically says “Specific program estimates are included across the ten years for DisabilityCare Australia, the National Plan for School Improvement, and the Nation Building 2 and Nation Building 3 programs.”

Labor in fact revealed the funding for the National Disability Insurance Scheme in the budget last May, with new spending broken down out to 2019.

“The Australian Government will provide $19.3 billion over seven years from 2012-13 to roll out DisabilityCare Australia across the country. This brings the Australian Government’s total new investment in DisabilityCare Australia to $14.3 billion over the period.

The Australian Government will provide funding of $11.7 billion to DisabilityCare Australia in 2019‑20, the first year after full national rollout. This represents 53 per cent of the $22.2 billion total cost of running DisabilityCare Australia, with the States and Territories providing the remaining funding.”

This was to be funded by the increase to the Medicare levy.

Likewise the spending for the Gonski reforms was spelled out in detail as was its funding.

“The Budget provides an additional $9.8 billion over six years from 2014‑15 for new needs-based school funding arrangements.

To ensure that the National Plan for School Improvement will be fully funded, the Government has needed to make tough decisions — redirecting savings from higher education, self-education tax deductions and business taxation; and better targeting family payments.

In addition, a range of national partnerships for education will be ceased (or not renewed) and funding will be redirected to the National Plan for School Improvement. As well as helping pay for this historic reform, these saving decisions will also will help improve the position of the budget in the next few years.”

Labor copped a lot of flack for its proposed cuts to university funding, which were really a smaller increase rather than an actual cut. The reason they are opposing these savings now is because they made the cuts to fund education reforms, not to spend on roads.

Hockey also bemoaned supposed hidden funding increases to foreign aid and defence.

“The fact is Labor’s left us with a massive forecast increase in foreign aid, a massive increase in defence – for example in one year, there’s meant to be a real increase in defence spending of 13 per cent, a 66 per cent increase in foreign aid.”

The increase in foreign aid was also in the budget papers - it was actually a reduction on previously proposed spending, with the government’s Millennium Development Goal commitment to lifting foreign aid to 0.5% of gross national income put back another year to 2017. The government spelt out its planned increase in foreign aid up to and including 2017-18.

As Crikey pointed out in April,

“Labor invited the Prime Minister to spell out the government’s MDG policy, which he duly did: aid is to reach 0.5% of GNI when the budget returns to surplus. Which raises the question of why, in Hockey’s Mid-Year Economic and Fiscal Outlook in December, Hockey left Labor’s MDG aid funding increase intact, in defiance of the government’s own policy. The answer, of course, was that it would inflate the budget deficit for 2017 and beyond.”

And on defence, the budget tells us that defence spending for the 2014-15 financial year will rise by $2.3 billion to $29.3 billion, a real increase of 6.1%, with a commitment to building defence spending to two percent of GDP within a decade. So it seems that wasn’t a nasty surprise either.

Interestingly, the Labor budget also said “Government has chosen not to offset the hit to revenue in the near term, as it would come at significant cost to jobs and growth.”

In a budget press release, Joe Hockey said

“While the former Government left Australians with $123 billion of deficits and no path back to surplus, our budget repair efforts have meant that deficits in our first four years are now projected to be $60 billion, with a surplus of well over one per cent of GDP projected by 2024-25.”

Ummmm, according to Treasury and Finance, Labor policies would have got us to surplus in 2016-17 with a surplus of 1% of GDP by 2023.

Hockey goes on to say

“Gross government debt is now forecast to be $389 billion in 2023-24, compared with the $667 billion left behind by the former Government. This reduction in projected debt of nearly $300 billion also assumes that we provide future tax relief to address bracket creep.”

I am not sure why he keeps talking about gross debt, I assume because it is a bigger number, but he really should look at the government’s own website which says

“The August 2013 Pre-Election Economic and Fiscal Outlook (PEFO) estimated that net debt would rise to 11.7% of GDP in 2013–14 and peak in 2014–15 at 13.0% of GDP. These levels of net debt are not unprecedented in Australia. Between 1970–71 and 2011–12, net debt level as a percentage of GDP exceeded 10.0% ten times (mainly in the 1990s)..…compared with other advanced economies, Australia’s net debt levels are comparatively low, and have been for some time.

The PEFO projected a return to surplus of 0.1% in 2015–16.

Although Australia’s fiscal balance fell to a low in the context of the GFC, its structural budget balance is reasonable compared to other advanced economies.”

When Hockey says that Labor left us with a debt of $667 billion, he is quoting a figure from his own MYEFO document which included his decisions to cut revenue from the mining tax, the carbon tax, the 15% tax on superannuation income over $100,000 a year, and the Fringe Benefits Tax rort on novated leases.

It also included his inexplicable decision to hand $8.8 billion of borrowed money to the Reserve Bank. The sale of Medibank Private - a $4-5 billion contribution to the budget - will be spent on roads because Abbott wants to be an “infrastructure prime minister”, when it could cut the budget deficit or the debt. That could be $13-14 billion off the deficit and debt right there - or an interest saving of more than half-a-billion dollars a year. Scrap the company tax decrease, scrap the Paid Parental Leave scheme, close a few corporate tax loopholes and tax concessions for the wealthy and we would be well on the way to addressing the challenges of the future.

So what it boils down to is that Hockey confected a large future debt to justify ripping the heart out of our most vulnerable so he can say he is being “responsible” by getting the young, the sick, the unemployed, the elderly, the disabled, the single parents, and anyone else who doesn’t have a voice, to pay for his claim that he might improve his own fictional bottom line in ten years’ time.

In the mean time we will give up the Gonski reforms, the real NBN, all action on climate change, environmental safeguards, research, renewable energy, hospital funding, universal healthcare, the ABC…all while sending a large percentage of the population into poverty.

The carbon tax doesn’t sound so bad now, does it?

“I’m not upset that you lied to me, I’m upset that from now on I can’t believe you.”

― Friedrich Nietzsche

 

Like what we do at The AIMN?

You’ll like it even more knowing that your donation will help us to keep up the good fight.

Chuck in a few bucks and see just how far it goes!

Donate Button

Let’s get real here

“TONY Abbott and Joe Hockey are convinced the government will be punished electorally if it does not produce a tough budget, and they believe there is a “public appetite” for decisive action to get the economy back on track.”

Sounds good? Well let’s get real here. Nothing pisses me off more than getting lied to and you, Mr Hockey, are really pissing me off. Listening to you rail at Labor this week, exhorting them to tell the truth as you told lie after lie, nearly made me choke. There is a “public appetite” for the truth so time for a reality check.

Firstly, to label MYEFO as Labor’s last budget fools no-one. It was produced over three months into your term. You were elected because you said you could fix the problems. The blame game is over sunshine, it’s on your shoulders now and you have wasted one sixth of your term in office crying.

The PEFO report is an independent report by the Secretaries to the Treasury and the Department of Finance that provides updated information on the economic and fiscal outlook. These are the same people who advised you for your MYEFO report so to accuse Labor of lying about the figures is rot.

PEFO showed the cumulative projected budget deficit for the years 2013 to 2017 as $38 billion. MYEFO, prepared under your watch, shows a deficit of $106.6 billion. To quote your own document

“The $68.1 billion deterioration in the budget position since the 2013 PEFO reflects two key factors:

  • the softer economic outlook; and
  • essential steps to address unresolved issues inherited from the former government”. (otherwise known as YOUR spending decisions).

You go on to say:

“Firstly, a softening in the economic outlook has resulted in significantly lower nominal GDP, which has largely driven the reduction in tax receipts by more than $37 billion over the forward estimates.”

In the face of falling taxation revenue how does the Coalition react? They forego $2.9 billion revenue in tax and superannuation measures announced by the previous government.

Getting rid of the moves to tighten the requirements around tax benefits associated with salary packaging a car under Fringe Benefits Tax rules cost us $1.8 billion. All that was required was for FBT claims of business use to be legitimate, verified by a log book filled in for 3 months once every five years – hardly an onerous task.

Joe and Tony said it would cost jobs in the car manufacturing industry. Well subsequent actions by the Coalition show that concern to be a sham as they went about dismantling the industry from their first day, so I can only conclude that they support fraudulent claims of vehicle business use as a legitimate form of tax avoidance.

Moves to tax earnings of more than $100,000 on superannuation pensions and annuities at 15 per cent instead of being tax-free have also been repealed. This move cost us $1 billion to allow the 16,000 wealthiest superannuation recipients to pay no tax at all on an annual retirement income of over $100,000. These would include the people that John Howard permitted to put $1 million into superannuation tax free in 2007 as a vote buyer.

The cost of tax concessions for superannuation continues to grow by about $5 billion per year and will soon top $50 billion.

The revised projections for revenue from the mining tax showed it raising $3.3 billion over the forward estimates. You may call that nothing but think what those charities you have cut funding from could have done with that. Perhaps the childcare and aged care workers could have got that pay rise after all. You cannot say, on the one hand, that it raises no revenue and then on the other, say it is a burden on business that is costing jobs and investment. All this at a time when record mining industry profits have outstripped growth in taxes and royalties.

The Coalition have also pledged to reduce company tax by 1.5% which will cost us $5 billion. One reason given for this is to offset Tony’s paid parental leave scheme levy. Tony and Joe assure us that PPL is fully funded by a 1.5% levy on businesses with a turnover of over $5 million – they neglect to mention that the country loses $5 billion which will now be diverted to pay wealthy women to breed. Let’s just imagine that we had someone sensible in charge, scrapped Tony’s PPL scheme, scrapped the reduction of company tax, and kept the 1.5% levy on the top 5000 businesses. We would have an extra $10 billion a year to spend on, oh I don’t know, renewable energy perhaps?

The carbon price raised $6.6 billion in its first year which was passed on to households, trade-exposed industry, and research and development grants. Repealing it could punch a hole as big as $7.6 billion a year in the budget. Compare that to the Coalition’s Direct Action fiasco which will not raise revenue and cost the budget $3.2 billion over the next four years. Instead of collecting about $30 billion and taking action on climate change we will be paying over $3 billion to polluters – makes sense, NOT.

Moving on from the revenue side to spending, MYEFO tells us that the majority of the $17 billion deterioration in this year’s budget is due to Coalition spending decisions.

As soon as Joe Hockey got the keys to the safe he borrowed $8.8 billion and gave it to the Reserve Bank of Australia in what has been described as a gamble on the foreign exchange market. The RBA certainly didn’t ask for Hockey’s $8.8 billion capital injection and didn’t think it was necessary. It wanted to rebuild its capital over several years by retaining its profits and not paying the government dividends. Hockey’s $8.8 billion injection this year means dividends will be paid to the government over the next few years.

So the truth of this exercise is Hockey wanted Labor’s deficit to look bigger and he is happy to blow several hundred million dollars interest a year in an attempt to make his performance as Treasurer look good.

After years of abuse about the cost of Labor’s asylum seeker policy, Hockey added an extra $1.2 billion for offshore processing. Presumably this will be spent on extra guards and orange life rafts and bribes to other countries to see to our problem.

An extra $1 billion was allocated to fund eight infrastructure projects that were to be funded from the former Government’s Regional Infrastructure Fund which was paid for by the mining tax. Instead of the MRRT providing the funds, they will now come direct from the taxpayer as the Roads Prime Minister fulfils his dream. And now we have Matthias Corman telling us that the possible $4 billion raised from the sale of Medibank Private will also be spent on roads. Enough with the roads already – we don’t want to become another Beijing. How about another airport for Sydney or high speed rail or urban public transport?

Hockey goes on to say that “Without any policy changes, the budget is projected to be in deficit in each and every year to 2023‑24.” A little further down the page we read that “The Government is committed to returning the budget to sustainable surpluses that build to at least 1 per cent of GDP by 2023‑24.” Ummmm, what’s the difference? Does that mean that you intend to make no policy changes, or that your policy changes will make no difference?

Much has been made of the promised Commission of Audit. MYEFO stated that:

“The Commission of Audit will be guided in its work by the principles that government should:

  • live within its means;
  • have respect for taxpayers in the care with which it spends every dollar of revenue; and
  • do for people what they cannot do, or cannot do efficiently, for themselves, but no more.”

Considering what you are prepared to spend money on – fleets of joint strike fighters, submarines, unmanned drones and one-use orange life rafts, $10 billion to keep asylum seekers locked up, gold plated paid parental leave, grants to polluters, billions a year on fossil fuel subsidies, endless reviews, audits, white and green papers, and Royal Commissions, bigger new planes so Tony can accommodate the film crews in VIP luxury, a $70,000 pay rise for Campbell Newman, $16 million for Cadbury – I think it is YOU who should be fearful of what the Commission has to say.

Rather than telling all of US to tighten our belts and prepare for big cuts, how about you think about your priorities. You are throwing away money by your tax cuts and your spending priorities are crazy. I will be interested to see if the Commission of Audit agrees with me, or will those bits be excluded from the censored version? It’s amazing how this government, champions of free speech, refuse to release documents and information and when they do, they redact so much it reads like a tv guide.

At the risk of sounding sexist, perhaps having a few more women in Cabinet might help. They are often better at seeing the big picture and making the most of the income you’ve got.

Stop the theatrics Joe. We are on to you. The dispatch box is your stage, but your script of blaming Labor and giving misleading information is becoming very tired. Every time you and Tony spoke this week, in your softening us up for the budget, you said Labor left us with a debt of $667 billion and cried shame shame at the Opposition. Well shame on you for your purposeful distortion. To counteract your manipulation, and to make sure the public understands the truth I will once again quote from your own document.

“Net debt is forecast to be $191.5 billion in 2013-14 and reach $280 billion in 2016-17.”

Let’s get real here!

 

Like what we do at The AIMN?

You’ll like it even more knowing that your donation will help us to keep up the good fight.

Chuck in a few bucks and see just how far it goes!

Your contribution to help with the running costs of this site will be gratefully accepted.

You can donate through PayPal via the button below, or donate via bank transfer: BSB: 062500; A/c no: 10495969

Donate Button