Speaking to a business audience in London, our work experience Treasurer Josh Frydenberg informed them that achieving a surplus was his primary goal regardless of what is happening in the economy.
When asked if he would consider pushing back next year’s projected budget surplus if, as economists predict, the economy continued to weaken, Frydenberg answered “No. And I can spell that.”
“We took to the election our budget commitments and we will faithfully implement it. In fact, my first priority is about implementing our election commitments.”
A Treasurer who sticks “faithfully” to a plan which ignores reality is of grave concern.
Josh assures us that the government’s $158 billion tax cut package will provide the stimulus to boost the economy.
People earning $50,000 will get an extra $3.30 a day. Those on over $200,000 will get an extra $32 a day, slightly less than what Newstart recipients are expected to survive on.
This would entrench revenue cuts right at a time when the government has committed to an enormous spend on military equipment and when the cost of caring for an aging population is growing rapidly.
Governments need to be flexible enough to be able to react to prevailing conditions. They need to anticipate what is coming and prepare. They need the courage to do what is needed rather than slavishly adhering to a mantra of lower taxes and smaller government.
They need to evaluate the evidence.
And let’s face it Josh – sticking to your plans so far has not gone well.
You got rid of carbon pricing. Emissions and power bills went up.
You got rid of the mining super profits tax. Mining investment and jobs went down.
You got rid of the fringe benefits tax requirements for leased cars. The car industry closed down.
You got rid of the budget repair levy on high income earners. The budget is still in deficit.
You cut penalty rates. Underemployment goes up.
You cut foreign aid and are then surprised when China fills the gap.
You cut Indigenous funding and refused to give them a Voice. The disadvantage gap widens and the incarceration rate grows.
You cut funding to the corporate regulators and then had to give it back when you realised that big business does not do the right thing without intense scrutiny.
You sacked thousands of public servants, leading to a loss of expertise and very large redundancy payouts, and then contracted thousands of consultants instead.
You spend hundreds of millions on water buybacks. The rivers dry up.
You give hundreds of millions to middlemen to save the reef. The bleaching keeps happening.
Company profits continue to be high. Consumer confidence and household spending are low.
Net debt has increased from $174,557 million at 30 September 2013 to $372,154 million at the end of April. Gross debt is now $541,942m.
The economy has grown for 28 consecutive years yet we are now in a per capita recession and, on Friday, the NAB declared Australia’s retail sector in recession.
This is what has been delivered by the Coalition’s “better economic management”.
The real problem is that they believe their own advertising and cannot see that what they are doing is not working.
This could get really ugly.
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