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Cutting through the crap

The Coalition want to talk about the past or the future but never the present. Here are a few details from this year’s budget.

Net debt in 2014-15 is estimated to be $250.2 billion and the face value of CGS on issue (gross debt) is expected to reach a within‑year peak of around $370 billion.

When the Abbott Government came to power in September 2013, there was $270 billion in Commonwealth securities on issue and net debt was about $170 billion.

Far from the much touted “budget repair”, to date gross debt has grown by $100 billion and net debt by $80 billion. Over the forward estimates, the face value of CGS on issue is projected to rise to a within‑year peak of around $539 billion in 2018‑19.

The deficit for this year is estimated to be $41.1 billion with expected cumulative deficits over the following four years of $82.3 billion.

Nominal GDP growth in 2013-14 was 4%. In 2014-15 it is now estimated to be 1.5%. For some reason, Joe anticipates a rapid improvement estimating growth of 3.25% in 2015-16 and 5.5% in 2016-17.

Even though Joe is forced to tell the truth about current figures, he can’t help himself but perpetuate the lie:

“Gross debt in 2023‑24 is expected to be around $112 billion lower than the $667 billion inherited from the former Government.”

How can you inherit something that hasn’t happened yet?

Joe also has a little trouble drawing a graph as can be seen with the following offering from the budget showing projected CGS on issue. The spurious $667 billion debt projection for 2023-24 quoted in the 2013-14 MYEFO seems to have grown to about $750 billion according to Joe’s graph.

CGS

 

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15 comments

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  1. babyjewels10

    Good question! But don’t ask Mathias Cormann.

  2. Mike Flangan

    A good synopsis thanks Kaye but it is also interesting to note the heroic assumptions of growth in the forward estimates, to promote a false bottom line and avenue to a surplus, are in contradiction to the RBA’s recent estimates.

  3. Kaye Lee

    With his first MYEFO Hockey wrote down the growth estimates to make the “inherited debt trajectory” much larger. He has now given growth projections higher than what he lambasted Labor for and is claiming the credit for reducing his inflated debt estimates. This ridiculous manipulation of figures infuriates me.

  4. David

    On the budget, heard the Independent!! Senator Leyonhjelm this morning on the ‘unbiased’ ABC telling the country what a wonderful understanding negotiator Morrison is, how he has been ever so pleasant to deal with and accordingly the Senator will be supporting the Govt in all their proposals although he is still opposed to the Family Benefit being stopped after 6yrs of age. Not sure just where he stands on that, although I’m sure Morrison will be not be short of a few inducements. The ABC news Radio’s political expert, some immigrant from Sth Africa or Rhodesia Marius Benson was all peaches and cream during the i/v, nary a probing question to be heard.
    Another day on the peoples radio.

  5. Ginny Lowndes

    I’m having an historical moment reading about Menzies and his ‘popular budget’ of 1953. Man-to-man, Menzies told the Australian people that any criticism of his Treasurer was “unfair and un-Australian”. Enjoy. http://trove.nla.gov.au/ndp/del/article/2889072

  6. Jexpat

    Among other things, Hockey has difficulty drawing a trend line.

  7. diannaart

    I have to admire Hockey’s clairvoyance talent – able to predict what would’ve happened if Labor had still been in power. Clever d…

  8. stephentardrew

    Amongst other things Hockey has difficulty full stop.

    The guys an intellectual minnow and economic girly boy.

  9. Florence nee Fedup

    Assuming Labor wouldn’t have made changes in last two years. Swan was forced to make adjustments because of deteriorating economy up to time of Rudd taking over. Cause being falling revenues. Received much flack for having to do so. Practice fiscal consolidation every budget from time GFC.

    Cuts were made to Tertiary education, among other things to provide for Gonski. Yes choices were being made all the time.

    The high dollar that refuse to come down, as was normal did not make Labor’s task any easier. That same high dollar, cause by record ore prices led to the rest of the economy being undermined. Made every prediction made by treasury being out. There should have been some hiving off of the record profits, to help the rest of industry to survive, adjust or move to new technology, to allow it to survive.

    Yes, the MRRT which the Opposition and mining spent at least 20 million to fight, was needed.

    Abbott choose to ignore warnings, that more fiscal consolidation and in their case austerity actions would lead to deterioration of economy. Thankfully, they have not succeeded in getting many of their cuts through.

    Reserve bank warn Hockey, they could not do it on their own, By look budget, Hockey has been forced to come in line.

    Yes, I believe Abbott thinks he has a budget to win election, but it is true, they couldn’t have delivered any other. Economy too soft.

    For first time in over 6 years, Hockey is desperately trying to talk economy up.

  10. Kaye Lee

    Until he gets it through his skull that it is demand that fosters growth we will continue down the path of cuts, rising poverty, inequality and debt. Giving more money to employers is pointless if there is not increased demand for their goods and services. We need to increase spending power. Increasing Newstart by $50 a week is far more likely to boost employment than allowing small business owners to buy a new car or computers and write it off.

  11. stephentardrew

    Lee as usual Bill Mitchell is spot on. Worth a read.

  12. Colin

    I still worry for our future. We have a useless gutless government delivering a useless gutless budget. There are so many things the government is getting wrong, we should be shouting from the rooftops Peter Finch style. Yet what is the average Australian caught up on today? Some selfish f#%¥€ng American celebrity’s f@&$#ng dogs!

    Sorry for the rant, but I’m as mad as hell and I’m not going to take it anymore

  13. Gangey1959

    Hmmm.
    So I’ve got 20 Grand to play with. Per item I believe.
    If I can spend it I can claim it straight back. Yay.
    Only thing is, that new ute I’ve been salivating over, built in Broadmeadows, V8, Auto, 4WD, shiny roof racks and all, is going to set me back a bit more than 20G. It will however employ some people here in Aus.
    For 20G, what do I get? Noting built here. So where does the employment come from? The car-wash when I go shopping is about all.
    The same with the new angle grinders. $49.00 from Aldi. Free replacement every week when they break, but no jobs attached.
    I could spend more at a proper Angle Grinder shop, but it would just be the same piece of foreign built shit in a different box.

    I’ll have to re-think my spending. I do have one question first. Any help with a vaguely correct answer appreciated.
    If I go out and buy a pointy stick, and use it to beat PM tradies-mate and Treasurer inept to pieces for calling me stupid one time too many, can I claim it back this year in full? Jeezus I hope so.

  14. Bronte ALLAN

    There was an article in the Adelaide Advertiser back in February this year where a list of various countries from around the world, illustrated that Australia’s “debt crisis” is a giant lie! The list shows that of the 15 countries (including the US, the UK, Germany etc) Australia had a net debt of $281 billion dollars or 17% of GDP. This compared to 10 other countries (including the US, the UK, Germany etc) which ALL had larger net debts & % of GDP’s than Australia! What this article & the list showed was that, in spite of Hockey’s bleating about our huge debt–compared with 10 of the other 14 countries listed–we were in most cases hugely “better off”! So. who do we (the voting public), believe, a “treasurer” who tells lies (unfortunately like a lot of his party members!) or the figures provided by the IMF World Economic Outlook October 2014-2015 projection?

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