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History. And why our grandchildren should be paying off debt!

  1. Victoria. Kennett has been elected, and his main platform was that the State was “broke” and that we were in so much debt that our grandchildren would be paying it off.

Slash, burn, cut the public service! INCREASE taxes – not because he wanted to, but because it was necessary. You see, Labor enjoys increasing taxes so we should criticise every single increase or new taxes, but Liberals only do it out NECESSITY. Some argue that Kennett didn’t have to move so quickly. Some find his cuts to services while spending money on improving the dining in Parliament House or bringing “Sunset Boulevard” to Melbourne offensive.

But whether Kennett moved too quickly or cut too deeply, he DID pay off Victoria’s debt. And it doesn’t take several generations. It takes less than the seven years he’s in office.

Of course, the asset sales and the lower interest rates probably helped, but the point is: Whatever was said before he was elected, our great-grandchildren weren’t paying for the debt. Neither, for that matter, were our children.

Although, it could be argued that these ARE the people who paid for the debt. The ones who missed out on educational opportunities. Or the people who died waiting for an ambulance – although it was considered bad form to try to make political capital out of that, unlike these days when the Liberals suggest that Labor have blood on their hands over the Pink Batts. (“Should have been more regulated! Because private industry needs regulation, although once we’re in power we can cut red tape because as with the economy, it’ll all be ok then!”) And of course, the generations who are told that power prices have to go up because the private companies that Kennett sold our assets to haven’t spent money on infrastructure and that the public transport system can’t be improved because the private companies can’t afford to.

Liberals are fond of using household budgets as an analogy, and I suspect that my son would rather be left with a small mortgage on a house that was safe for him to live in than being debt free but homeless. That’s the thing with debt, it’s always relative to assets. The Australian Government – or the taxpayer – may be $300 billion in debt, but servicing that debt is only costing $2 a week for every working Australian (my source is a Murdoch paper!) And as for assets, well the $300 billion is less than a quarter of our Superannuation. Or about equivalent to what the Government spends in a year.

Basically, the debt isn’t that bad. We can pay it back over ten years by just a small increase in tax.

Or we can say it’s out of control. Sack half the public service. Cause a recession. And spend the next ten years blaming Labor for our inability to deliver a surplus. The Kennett option isn’t possible because there’s nothing left to sell. Apart from Medibank Private.

 

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