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A couple of quick take-outs from MYEFO

Josh Frydenberg keeps telling us that, now that the budget is back in surplus, he will be able to pay down Labor’s debt.  This will save us a kazillion on interest payments that will be spent on schools and hospitals.

Yeah … right.

Ignoring the fact that most of the debt has accrued under the Coalition government, MYEFO shows that, despite expected budget surpluses over the forward estimates, Australian Government Securities (AGS) on issue, otherwise known as gross debt – the thing we pay interest on – will increase from $556 billion at the end of this financial year to $576 billion by the end of the forward estimates.

No wonder Frydenberg wants interest rates to keep dropping.

Also mentioned in MYEFO was that, from next financial year, the underlying cash balance will, for the first time, include expected net Future Fund earnings – over $5.5 billion a year and rising.

Another way to boost the bottom line without having to do a thing.

They will need whatever they can get because the cost of their war toys keeps blowing out by astronomical sums.

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36 comments

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  1. Puking Wartneck

    I think you’ll find that ‘most’ of us believe Josh…after all, ‘most’ of us believed Abbott. And ‘most’ of us believed Turnbull. And ‘most’ of us believed Morrison.
    So why shouldn’t ‘most’ of us believe Fraudenberg?

  2. Win Jeavons

    PK : ‘most’ of us being congenitally innumerate, and stupid with it?

  3. Kaye Lee

    It’s all in the messaging.

    The MYEFO papers say that gross debt is expected to be 27.7% of GDP this financial year and 25.5% of GDP by the end of the forward estimates. You have to pay attention to understand that is an increase of $20 billion in debt..

    In ten years, they expect gross debt to be 14.6% of GDP, which they project to still be $474 billion. In other words, they won’t go anywhere near paying off debt any time soon.

    Not that they should. But pretending they are is just silly.

    Frydenberg swaps between percentages and gross amounts and cherry picks whatever statistics or time frame or comparison look good for him. It is excruciating to listen to but would be a very good exercise for maths classes to debunk when learning about statistical manipulation.

  4. Matters Not

    Note also:

    Wage growth has also been revised down from 2.75 per cent to 2.5 per cent.

    But always look on the bright side. Because wages won’t rise at the same rate neither will the tax you pay. Think of the savings. It’s the same as another tax cut for all.

    Under this government, the glass is always half full. Indeed, half full glasses are now the new normal until the half full glasses themselves become only half full.

  5. New England Cocky

    Uhm … did I notice that the promised Budget in the Black has been put back from 2022 to 2029?

    Otherwise, why would you expect a failed professional tennis player to know anything about economy management of a national economy?

  6. Glenn Barry

    The day I believe Josh, I will have had half of my brain removed, not scratch that, all of my brain removed

  7. Keitha Granville

    Until there is some movement on wages, people will still have nothing to spend, thereby continuing the fall in GST revenue and tax take. And because of that the projected surplus will continue to fall, so wages won’t increase etc etc ad infinitum. Eventually we will all be working 80hr weeks at 2or3 jobs for less than we get now, pensioners will be put into aged care concentration camp homes, the unemployed will receive nothing and be left to die.

    Oh, sorry, I thought I was in an episode of Years and Years.

    Well worth watching, be very afraid.

  8. Geoff Andrews

    Shouldn’t the 2019 budget have been a report on the activities for the previous 12 months as well as a prediction leading up to this latest MYEFO, which should be a report on how closely the predictions in the budget turned out? They gaze into the entrails of the chicken and suddenly throw their hats in the air …..”Look, look! A small surplus just beside the kidney! We’ve done it!”
    MYEFO’s a wish list to be popped into a Christmas stocking for those who believe in Santa.
    As I prepare to enter my ninth decade, my stoop is becoming steeper,as Clive James would say,so that my eyes are just that bit closer to the ground. My MYEFO is to keep a sharp lookout for lost coins I can confidently predict in the next 12 months an increase to the bottom line of $4.45, giving a budgetary surplus of $1.35 to the 2020 forward estimate.
    I think I’ll spend it on a bonbon.

  9. Kaye Lee

    As at 31 October 2019, net debt is $394.77 billion.

    Frydenberg and Cormann kept talking about what they inherited from Labor.

    “The net debt of the General Government sector is $174,557 million at 30 September 2013.”

  10. Matters Not

    Watching The Drum where all panelists seem to be in agreement that the finances of the government should be seen in the same light as that of a household.

    MMT has a long, long road to travel. Not even in the tunnel as of yet let alone seeing any sort of light at the end.

  11. Phil Pryor

    Those shitheaded shysters and chronic crooks and crapheaded countereconomists of this putrid government are not fit to handle the finances, comment, make honest statements, tell the truth, the true truth. Lying liars, fiction bearers, fantasy wankers and totally dishonest reporters of the nations financial position, Frydenberg the fraud and Cormann the fascist filtching bookkeeper are the wrong types for public life, but, they are in it to pose, grin, lie, carry on, careering up a future with ingratiation to donors and patrons. Sick, filth.

  12. Kaye Lee

    After nine years in government, MYEFO is suggesting that net debt will be $360.8 billion in 2022-23….. $186.243 billion higher than it was at the end of September 2013.

    STOP telling me you are paying down Labor’s debt. Three terms in office and net debt has more than doubled during a time of global economic recovery after the GFC. Where are the media?

  13. Andrew Smith

    Related to PK’s quote, read recently how the ‘majority’ of Australians lack basic financial literacy…. yet present as financial and/or property (investor) experts.

    Accordingly, while Australians are led to focus upon (Labor’s but mostly LNP) govt. budget debt and need for surpluses, the elephant in the room is the massive private debt round the supposed prosperity of property mortgages (based upon imported capital).

  14. Matters Not

    Leigh’s intelligence was violated again tonight but she didn’t seem to notice. Just read the next question without even blinking.

    Soon to be promoted to Sky After Dark? Speers arrives and Sales departs?

  15. Kaye Lee

    That’s the problem MN. They have their questions prepared. They don’t respond to answers. And then they cut the interview short because they have to move on to some simpering story about the latest celebrity trying to promote a tour or a book. There were six stories on tonight’s 30 minute program….leaves little time to talk to the treasurer – 6 mins 41 secs to be precise.

    No-one does what Kerry O’Brien used to do. It’s like they are scared they will get in trouble….or much more likely, the pollies will ban them if they get too inquisitive. The P Duddy “you’re dead to me” approach.

  16. Matters Not

    As I recall, Ferguson was finding her 7.30 feet but now she’s a distant memory and besides she’s now bound for China. (As an aside what will Tony Jones do with all that spare time?) The Drum’s losing the political beat and clearly we’ll all be rooned. Nevertheless, one wonders when a MMT theorist will get a gig? Tonight would’ve been the perfect time.

    Even Peter Martin (a recent convert of sorts) would have added something.

  17. RomeoCharlie29

    Give Leigh Sales some credit, she did actually challenge Friedanegg but he is a past master of bullshit. Every time he spoke there was a Sotto Voce “blah blah blah” audible fron a nearby corner of the lounge room, indicating some scepticism about his bullshit. But then most of us who still watch the program know he speaks bullshit.

    And BTW Kaye Lee, six minutes and 41 seconds of his bloviating was 6.41 too long.

  18. Matters Not

    Re:

    is a past master of bullshit

    Bullshit! Not even a talented amateur. Doesn’t approximately approach the undergraduate level with a Masters qualification far and even above his own very limited expectations. As a possible an ‘alien’ we should hit him with a significant student debt. Just in case.

  19. Roswell

    Miriam, the edit post is still working but the feature turns off after 3 or 4 minutes.

  20. Zathras

    Once they pay off Labor’s debt they can finally start paying off their own.

    It’s funny that that negative overseas influences are called “economic headwinds” but when circumstances are going their way – like high iron ore prices for example – they aren’t “economic tailwinds” but a shining example of superior economic performance.

    I don’t think these excuses will play out as they hope for the next three years and telling people they’re so much better off won’t work indefinitely.

    The last tax cut stimulus strategy appears to have failed and there’s no reason another round will be any different. All that’s left is to cut services even further and then we’ll have a replay of the Howard “mean and tricky” era.

  21. LambsFry Simplex.

    Gets hard with the Drum, when the picture, sound and comments feed keeps breaking down.

    “Efficiencies” and “efficiency” dividends to make up for fossil fuels royalties forsaken?

    Puzzled the PM was not there in person to celebrate his latest victory over the wokes, “One more victory like that and they will be at the gates of Berlin”.

  22. Peter F

    “They will need whatever they can get because the cost of their war toys keeps blowing out by astronomical sums.”

    Perfect, Kaye.

  23. totaram

    Zathras: “The last tax cut stimulus strategy appears to have failed and there’s no reason another round will be any different. All that’s left is to cut services even further..”

    That is the hidden intent. Cut taxes and then cut services “to bring the budget into black”. Repeat as often as desired so that government becomes “small”, as required by oligarchs wishing to extract, rape and pillage. Remember, we need to cut “red-tape” and “green-tape” so the economy gets a “boost” (even if it doesn’t). Meanwhile, the brainwashed gullibles think the debt has been paid down and the surplus can be stored away for a rainy day as “ammunition” that can be used in case a “fiscal stimulus” is required. This “fiscal stimulus” will be delivered by handing government funds to the “efficient” private sector e.g. the half a billion given to a “foundation to save the GBR”.

  24. Andrew Smith

    Totatam agree. The mantra of tax cuts for working Australians is rubbish but about rewarding (or following orders?) corporate sector and top end of town supporters.

  25. David Evans

    Australia is basically stuffed, and will be until these lying clowns are banished forever…..

  26. James Cook

    Everyone needs to view Jonathon Pie’s summation/rant post the UK elections. I know he’s a comedian dressed up as journalist but what he has to say about the influence [or non-influence] of all of us on social media is very relevant.

  27. Miriam English

    Roswell, yep, I used to be able to edit for about 4 minutes, but no longer can. I’m dragging my feet upgrading to a newer operating system. I’ve had this old one for many years and have it working just how I like, with hundreds of small modifications that suit the way I like to work. Unfortunately none of the newer web browsers are available for it and a lot of websites have now changed their code and have broken compatibility. Some sites now don’t even display in the older web browsers! Thank goodness the only problem I have with AIMN is inability to edit my posts. (I know it’s not AIMN’s fault — it is WordPress in your particular case.)

    This lack of backward compatibility is a real point of annoyance for me. When I used to work as a programmer backwards compatibility was of the utmost importance. Sadly that’s gone out the window. I’m actually tempted to use it as a reason to avoid incompatible sites and just get more work done instead.

    My own website is deliberately made in such a way that it can be viewed on any computer — even an ancient machine from quarter of a century ago. In fact one of the side benefits of designing a site like mine is that it loads almost instantly, so that when I’m testing someone’s computer and/or web connection for them, I use it to view my website because it is guaranteed to load on any machine, without delay.

  28. Roswell

    Over my head, Miriam. Sorry I can’t be of any further assistance. It’s one for Michael.

  29. John Iser (the NSW one)

    Saw Frydo on 7.30 last night stating that the Government will pay $19 billion in interest on its debt this financial year.

    Cuppla things. Firstly, according to this document…
    https://www.budget.gov.au/2019-20/content/myefo/download/07_Part_7.pdf
    …the correct figure is $18,215 million. But what’s $785 million between friends?

    Secondly, and what Frydo chose not to mention, is that according to the same document government revenue will be $511,148 million. In other words, the government will spend 3.6% of its income servicing its debt.

    3.6%! It makes a mockery of the ‘government is like a household and has to balance its books’ argument. Show me a household that spends 3.6% of its net income servicing its debt and I’ll show you one that is very rich, or close to retirement, or thinking about buying that new gigantic box-shaped SUV.

    Government debt is an issue in poorly-managed economies like Greece. But in Australia it matters about as much as, say, Angus Taylor getting confused about who was living down the hall from him in New College in 1991.

  30. One Foot In The Grave

    John(from NSW),correct weight,Fraudenberger, like his mentor the lying rodent and his master the Shire Liar have an issue with truth,and as far as Anus Taylor is concerned,he deserves to be living down the hall from hardened criminals in a high security establishment.

  31. Judith W

    If they’ve doubled the national debt and STILL CANT RAISE A SURPLUS jthen how can they call themselves economic marvels?
    And considering schools, hospitals, environmental programs, government monitoring, life saving, animal welfare, aged care, fire fighting… are all kept on their feet by VOLUNTEERS where exactly does treasury spend our taxes on?

  32. Kaye Lee

    “where exactly does treasury spend our taxes”

    Submarine fleet tipped to cost $225b to build and maintain

    https://www.smh.com.au/politics/federal/submarine-fleet-tipped-to-cost-225b-to-build-and-maintain-20191129-p53fds.html

    An auditor-general’s report analysing 26 major defence projects has found the projects’ budgets have risen more than $24 billion since they were first announced, and will now cost taxpayers $64 billion.

    Among the projects examined by the Australian National Audit Office (ANAO) were Joint Strike Fighters, Air Warfare Destroyers, P-8A Poseidons, MRH90 helicopters, Offshore Patrol Vessels, Growler aircraft and Collins Class submarine reliability and sustainability.

    https://www.abc.net.au/news/2019-12-17/billion-dollar-cost-blowouts-and-delays-hit-defence-projects/11805942

    the big four accounting firms earned $1.7 billion from the federal government between 2012-13 and 2016-17.

    https://www.afr.com/technology/federal-government-s-50b-outsourcing-bill-faces-new-auditor-probe-20190717-p527xl

    Taxpayers funded $174m in government advertising last financial year

    https://www.theguardian.com/australia-news/2019/oct/22/taxpayers-funded-174m-in-government-advertising-last-financial-year

    Morrison government paid empathy consultant $190,000

    https://www.thesaturdaypaper.com.au/news/politics/2019/10/26/morrison-government-paid-empathy-consultant-190000/15720084008976

    I could go on and on and on…..

  33. LambsFry Simplex.

    Btw, for a sketch on (Darling catchment) water policy “failure”, have a quick geck at tonight’s Drum.

    Even allowing for certain constraints, it presents a black picture of the past, the present and for the future.

    Blows away the notion that it was all an accident.

  34. Wobbley

    How about we all try to lobby stokes’s Crap or Costello’s ninelnp to get Kaye Lee to appear on one of the breakfast shows? If she so chooses. Her delivery of political FACTS would have them scrambling trying to discount the truth. I would surely watch for the one and only time to see the liers wriggle in their seats and try to discredit everything Kaye Lee reveals about their poster boys and girls.

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