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‘Jobs and Growth’ Mantra to Haunt Morrison from now on.

If you thought the end of Tony Abbott’s reign as Prime Minister would see the end of the three word slogan, think again. The latest one, ‘jobs and growth’ will haunt the government and is henceforth destined to be written on Scott Morrison’s political epitaph.

For those who look beyond the headlines, it is the forward estimates that tell the real story. For a government that is so obsessed with budget surpluses, they must feel as if the gods have deserted them. There is not a surplus in sight.

That, as it happens, is a good thing although there is not a government member, or indeed any parliamentarian, who could explain or understand why.

With Joe Hockey’s original deficit estimate of $35.1 billion for 2015/16 now revised up to a shade under $40 billion, how much confidence should we have that Scott Morrison’s numbers will fare any better? Not much!

The forward estimates depict a deficit in 2016/17 of $37.1 billion. Good luck with that. But in following three years Morrison is suggesting these deficits will reduce to $26.1 billion next year, $15.4 billion the following year and a breathtaking $6 billion by 2019/20.

What an incredible amount of optimism that estimate displays. Look at nominal GDP for example. After barely getting off the ground last year (just 1.6 per cent) Morrison would have us believe that in just two years’ time it will rocket up to 5 per cent, without telling us what extraordinary things will occur to make that happen.

hock Is it a secret or a mystery? Nominal GDP is what determines how much revenue the government expects to collect. Whatever the thinking behind it, Joe Hockey’s quite feeble attempts at looking into a crystal ball last year have been gazumped.

Is there anything good to say about this budget? Yes, superannuation changes address the quite blatant skewing towards the top income earners that Peter Costello introduced back in 2006. The savings are directed to the lower end. The tax office will get an increase in staff numbers specifically to target multinational tax avoidance, although what that will achieve is unclear.

One would have thought that after three years of waffle and double talk, these self-appointed gurus of economic management would have something to show for their efforts. They haven’t. By their standards of debt and deficit they have failed miserably. If you doubt that, look at where they are taking us.

The budget papers show the end-of-year face value of Commonwealth Government Securities (CGS) on issue subject to the Treasurer’s Direction is expected to be $497 billion in 2016‑17 and is expected to increase to $581 billion in 2019-20. By the end of the medium term (2026‑27) the total face value of CGS on issue is projected to rise to $640 billion.

To the uninitiated, that’s what we call debt. When Labor was removed from office in 2013, the CGS issued were $258 billion.

untitled With unemployment exactly where it was in 2013 (5.7%) the government has failed to take advantage of the underutilised capacity within the economy. Had it done so and created jobs instead of waiting for the private sector to do it for them, we would be looking at a much better result.

As for expecting tax cuts to the business sector to create jobs, well, that is just fanciful.

41 comments

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  1. Peeved Off

    Then you tell me how much of Australian Tax dollars are going on Overseas Aid, Migrants/Refugees, Weapons etc Is it any bloody wonder they can’t get the budget back to a surplus. So what does this government give to every day Australians? More misery! Unemployment, Social Securities even a pack of smokes! So what’s changed? Nothing except the rich are well looked after yet again!

  2. longwhitekid

    Yeah well, if you could use Google, you’d find that the amount of foreign aid which has just been presented yesterday, is 0.22, historically the lowest it’s ever been by far. As for the rest, well yes. There will never be a surplus, that’s just not how an economy works. Maybe do a little research before you contradict yourself in a poorly thought out rant, that said I understand your ‘peeve.’

  3. Jaquix

    Hard to know where to start in unpicking this Budget. The word ridiculous comes to mind, to start with. Basically I think it just shows how truly out of touch the LNP are. Ivory tower dwellers. A great big fat Fact Check is needed on every little assertion within that babble we heard falling from the lips of the Treasurer last night. And the extra funds/staff for the ATO surely only replaces what they took out in 2014? And I noted that Michelle Guthrie new CEO of the ABC said (before the budget) that if there were any more cuts to the ABC, that Fact Check would have to go. That should be the last thing to go. Going to be an interesting few weeks til the 2nd July comes round.

  4. Terry2

    It seems that the effort to introduce a GP co-payment in 2014 has in 2016 been turned into a death of a thousand cuts for medicare and universal healthcare in Australia.

    As you may be aware, Medicare Benefits Schedule fees were frozen in 2014. They were due to be thawed out in 2018, but with this budget they’re going to be kept on ice until at least 2020. This extra two years will save the government $925.3 million dollars, but means that the amount Medicare pays for medical services won’t increase – even though doctors’ fees will.

    Your local GP, in other words, will be forced to collect a co-payment as there is just no way they can carry this freeze through to 2020.

    Now, why wasn’t this the subject of analysis last night and this morning.

  5. diannaart

    @Terry2

    Now, why wasn’t this the subject of analysis last night and this morning.

    Rhetorical question, right?

  6. Keitha Granville

    no-one is talking about that, OR the probable rise in PBS scripts. With the recent drop $5.20 for concessional scripts being very welcome, I reckon they’ll have to jump past $10 again to catch up. Extra for the doctor and extra for the chemist. Many older folk may just stop going to the doctor and stop taking their medication. Maybe the plan is to reduce the number of pensioners by natural attrition ?

  7. totaram

    Terry2: “Now, why wasn’t this the subject of analysis last night and this morning.”

    You didn’t even put a question mark at the end, because we all know the answer: “their ABC, MSM etc. “. So sad.

    longwhitekid: Quite right. Whether there is a surplus or not is quite irrelevant and actually not under the control of anyone. In other words the final fiscal balance is “endogenous”. We also know that the private sector cannot begin to pay down its huge debt (around 150% of GDP) unless the govt. runs deficits, because we rarely have export surpluses. And with debt at that level, why would the private sector step in to create jobs? Only the ideologically blinkered Coalition thinks it would/should.

    Ah, submarines and fighter jets are really most essential. They “protect” us! We can’t really figure out from whom. Actually they are just pork barrelling of one kind or another to various vested interests. But they make the govt. look “strong”!

    On the other hand the cuts to health, education, pensions, and infrastructure continue, hopefully under the radar, because “we can’t afford them”.

    These people are truly beyond ridiculous, and anyone who buys their spin is seriously deluded. It’s good to see that some people are waking up, if the polls are any indication.

    However, neo-liberal macro-economic mythology still rules the roost. Sigh!

  8. Steve Laing - makeourvoiceheard.com

    Still the same old trickle down bollocks. I owned a small business for 10 years. I’d have like to have earned enough money to have been able to pay corporate tax. Is nobody going to ask what effects the last small business tax cut had? How many more jobs it created? How much additional business investment it developed? Because quite clearly the answer is Sweet Fanny Adams.

    Kill demand, and increasing supply will do nothing. Isn’t this the common sense that Malky likes to lecture us about? What a bunch of dills. And yet people keep voting for them. Astonishing.

  9. guest

    I would hope that commentators will drive trucks through this budget.

    With regard to Overseas Aid, that it is small at present here in Oz is because the idea is that we look after our own. But that does not help those who, for whatever reason, are fleeing to first world countries. By not helping them more in their own country, in the end it costs us more to deal with mass migration.

    In other words, spending should be an investment. But we wonder why the Coalition continues to pay compensation to taxpayers for a Carbon Tax which does not exist. And pays taxpayers’ money to encourage carbon emitters to reduce emissions – not a very efficient policy.

    As well, why the need for huge spending on on military equipment which will take decades to compile, will cost plenty and will be possibly obsolete.

    While the Coalition speaks of jobs and growth, it says nothing about jobs in the renewable energy sector. Nor does there seem to be much thought given to the fact a large number of jobs will be lost when the car industry and suppliers will be affected next year with closures.

    The Coalition has made much of debt and deficit in the past, but has spent more than Labor did its last year or so. And in his Budget they intend to continue spending. The idea of spending less is not being employed.

    There are some pea and thimble tricks involving taking from Paul to pay Peter, but the result is a series of tiny increments But other areas of the Budget suffer losses or are ignored.

    The “jobs and growth” mantra is a furphy. It depends of people investing in business and people spending to increase growth. In a time of uncertainty, it seems uncertainty prevails despite Morrison’s glowing enthusiasm. If the money does not come he will be made to look foolish.

    We notice that he did not let us see him smoking a cigar. And Cormann kept well out of the way.

  10. bobrafto

    What’s the point of business tax cuts? with a raft of deductions available, I don’t believe any business pays the full whack, even Alan Jones admitted his tax rate is 15% and not to mention a multitude of companies that pay no tax at all.

  11. townsvilleblog

    How about for a three word slogan “collect “our” taxes” tens of billions to collect here if they were forced to pay their fair share of taxation. Hillsong has said from here on in they will pay 40% instead of the usual rate of 30% but he has given no tolls with regards legislation to enable the ATO to collect it. If they had legislated a 20% floor rate of taxation to be paid on their gross earning, then we may have had some joy, as it is it is just an extension of the chasey game.
    http://www.abc.net.au/news/2015-12-17/almost-600-companies-did-not-pay-tax-in-2013-14/7036324

  12. David

    I commend Labors Economic team Chris Bowen, Tony Burke and Dr Andrew Leigh on their reasoned, clearly explained, detailed responses to questions re the budget, last night and this morning ‘minus’ the loud, bullying, bad tempered responses exhibited by Morrison and Cormann. The difference in the two camps clearly demonstrated why labors Economic team and overall caucus, woman for woman, man for man are the superior..
    Further proof in the Senate today when asked by Senator Wong how much the Govts enterprise 10 yr tax plan would cost, the man went into a hysterical diatribe and refused to sit down despite repeated requests from the Chair. A completely out of his depth response with no knowledge of an answer and similar to his responses to Ms Alberici on Lateline although not so completely out of control.
    They cannot defend the indefensible

  13. Ken Wolff

    Terry2

    I added a comment about this to my previous piece on the Medicare freeze. But you are spot on. Despite the fact that Medicare rebates were last indexed in November 2012, there is no-one in the media kicking up a fuss about the freeze now being extended to 30 June 2020. Owler (AMA) made a comment of course but it has received little coverage. And that $900m saving is in addition to what has been cut already by the freeze – by 2020 it will be well over $2b. In addition, $650m was cut from pathology and diagnostic imaging last December (in MYEFO). And we’ve had cuts to hospital funding. Put it all together and it is a full-scale attack on the health system but consistent with the Libs efforts to privatise health. Note the government funded rebate for private health insurance hasn’t been cut although it is projected to cost the government $7b in 2019-20 – more than enough to reinstate Medicare indexation (including backdating the indexation)!!

  14. Alan Baird

    The point of the cuts to corporate tax is to reduce the amount of tax avoidance that companies indulge in. If the govt reduces corporate tax to zero, there will be zero tax avoidance! Now, isn’t that nice? With luck, and a little thought on exec’s behalf, they’ll be able to stop paying such huge amounts to lawyers and accountants to keep them out of gaol. More money for them and therefore even less tax avoided. Now if the ordinary PAYE had any real feelings on this matter, they’d gladly shoulder the extra tax burden necessary to keep the whole “system” going. I’m sure that the Murdoch Press and Macquarie Radio will find a way to explain to the punters that this is the way it should be, and I’m sure they’ll barely notice! Why, just this morning on 2GB one of the hirelings was warning that govt chasing down companies for squirrelling away money in the Caymans (et al) COULD be problematic, so they’re obviously working their way towards that line. Now you don’t HAVE to be stupid but it does help quite a bit if you are so you can take these “news” outlets seriously.

  15. jimhaz

    Medicare rebate freeze – lifting costs for those who need to use bulk billing. Maintaining bulk billing being something we agreed as part of the Medicare levy.

    Income taxation bracket creep freeze – unless you don’t need it.

    Wages freeze – more or less as wages have not risen much for some time, and the low end did not rise in concert with the high end.

    Freezing out smokers – again mostly low income earners, who are on low incomes as they don’t have the EQ to earn a higher income or exercise self-discipline.

    The LNP is so cold, even asylum seekers setting themselves on fire does not warm their frigid hearts. They blow all the warmth from their being by shouting fire and brimestone memes from their sulfurous lungs.

  16. Peter F

    While the emphasis has been on how ‘bracket creep’ could affect those whose income rises above $80k, the fact that the bracket has been raised by $5(?)K reduces tax for ALL taxpayers with income above $80k.

  17. bobrafto

    If someone has the resources it would be interesting to know what the average tax in percentage term companies pay, i.e no. of companies / total tax collected.

    My guesstimate is probably around 15% or less and therefore company tax cuts are just BS i.e budget spin.

  18. Sam_w

    Take a look at the USA to see where its headed. Middle class budget hit a threshold in the early 2000’s where the costs of medical insurance, insurance, utilities and education overwhelmed the family budget. (So the ‘dated’ and ‘contingent’ liabilities outgrew income). All the discretionary purchases were done on credit if something went wrong because the middle class basically didnt have savings.

    What a ‘budget’. So still hell-bent on making generation Y insolvent.

    Still the same old inept metaphors being pushed by both major parties.
    The non stock flow forward-estimates as always are wrong because they don’t fit the basic sectoral accounting identities.
    Still a sad joke that CGS’s is supposed to scare people. Any granular example of treasury central bank interaction shows the government is not revenue constrained nor for that matter is spending dictated by its Treasury Bonds.

    Money and Banking – Part 6: Treasury and Central Bank Interactions

  19. wam

    small business sounds good to the ‘peeves’ of Australia – $10 million sounds good to business – jobs and growth meaning but just sounds good. Who cares about details of jobs, growth and security.
    Where to start?
    Any twit who doesn’t already know the rabbott and the loonies doubled the debt will never believe that labor’s economic strategy resulted in a world class AAA economy because they, like me, find the economics involved difficult to understand but, unlike me, they prefer to beleve mummy, daddy and the failed priest’s slogans not the rest of the world.
    The word of Stiglitz is good enough for me
    Perhaps the mal ‘I am content’ bull’s comment that parents should shell out to buy their children a house
    So mal, I buy an investment house near the uni and let my kids stay with low rent whilst the taxpayer picks up the bulk of the cost???.

  20. Robert

    What is hidden in the budget small print and not referred to in any of the MSM commentary is the Liaberal and IPA ideological intention to destroy the Medicare system by stealth.
    Susan Ley has now extended the freeze on indexing or increasing the rebates from Medicare for a further TWO years. These were initially delayed for 6 months by Gillard and Swan but this freeze has have not been lifted by the Liberals since and Ley extends it for a further two years. – As a result Doctors will cease any Direct Bulk Billing and it increases the patients cost. The hidden Medicare copayment by stealth.
    This is in addition to the changes to the Pathology test copayment that Ley has introduced that becomes effective from 1st July.
    It is also in addition to the changes to the National Diabetes Scheme that removes agreement for supply of Diabetes equipment from Diabetes Australia, the availability of Glucose test strips without a doctor’s prescriptions, and the increase in cost for Diabetes Equipment and Insulin that also comes into effect from 1st July.
    All of these attacks on our health system to reduce the Government funding, cut out prevention of health problems, increase the costs to the sick and to destroy our existing health system for pure Ideology.

  21. David

    Reading Mr Mitchell I take it everyone is stupid except him

  22. Athena

    I take it you’re forming an opinion from a very limited reading, David.

  23. diannaart

    @David

    I frequently find, BM, a bit tedious reading – not this time. Mitchell was outraged by the economic posturing of both the Libs and Labor – and he gave evidence as to why.

    Neither major parties are investing into the economy/Australia – they are playing around the edges, reducing the majority of Australians’ spending capacity, which in turn effects business profits. Therefore, we can expect the economic trajectory not to change, but in fact, worsen.

    Couldn’t be clearer.

  24. David

    Athena ..No

    diannaart..I do not believe Labor are as guilty as Mr Mitchell makes out, a view taken from close association with the Party and I am happy and comfortable with that observation.

  25. John Kelly

    Bill Mitchell does not suffer fools well. His frustration at politicians ignorance and their deception is clear to see for those who read him regularly. But never doubt the accuracy of his macroeconomic claims.

  26. Athena

    Bill Mitchell can be a rather difficult read. To better understand what has him so riled up, I recommend reading Noam Chomsky’s ‘Profit Over People: Neoliberalism and Global Order’. Make no mistake, the ALP has been drinking the neoliberalism kool-aid too.

  27. jim

    NO LNP ever party,Please. it’s amazing how just a little transparency forced onto the free trade deals the Obama administration been negotiating in secret totally turns the public against them*****.STOP THE TPP……Job Losses in the USA ,a quick search will scare you as these “deals” …..According to the Economic Policy Institute’s study, 61% of the net job losses due to trade with Mexico under NAFTA, or 415,000 jobs, were relatively high paying manufacturing jobs.[1] Certain states with heavy emphasis on manufacturing industries like Michigan, Ohio, Pennsylvania, Indiana, and California were significantly affected by these job losses.[1] For example, in Ohio, Trade Adjustment Assistance and NAFTA-TAA identified 14,653 jobs directly lost due to NAFTA-related reasons like relocation of U.S. firms to Mexico.[3] Similarly, in Pennsylvania, Keystone Research Center attributed 150,000 job losses in the state to the rising U.S. trade deficit.[4] Since 1993, 38,325 of those job losses are directly related to trade with Mexico and Canada. Although many of these workers laid off due to NAFTA were reallocated to other sectors, the majority of workers were relocated to the service industry, where average wages are 4/5 to that of the manufacturing sector.

    Such outcomes include a staggering $181 billion U.S. trade deficit with NAFTA partners Mexico and Canada and the related******* loss of 1 million net U.S. jobs……. under NAFTA, growing income inequality, displacement of more than one million Mexican campesino farmers and a doubling of desperate immigration from Mexico, and more than $360 million paid to corporations after “investor-state” tribunal attacks on, and rollbacks of, domestic public interest policies.of cause what happens is that the rich get RICHER and RICHER ha ha haaa.
    ..link.
    http://www.huffingtonpost.com/lori-wallach/nafta-at-20-one-million-u_b_4550207.html

  28. jimhaz

    My guess is that way too much has been made over this so called deflation. The big ticket was transport which fell by 2.1%. It is a one-off, not systematic. I don’t expect systematic deflation until the housing bubble bursts.

  29. diannaart

    @David

    While I do not believe that Labor is as fiscally motivated as the Libs – they do indeed have close associations with the big-end of town – approval for new mining being only one (very big) example.

    That said, in spite of Bighead and Nurses1968 efforts, I will be voting Labor for the lower house. I do not see any chances of a progressive alliance while Labor remains in opposition.

    As for your personal acquaintance with Labor – I prefer to research and verify actual behaviour – behaviour which paved the way for the LNP to take to extremes such things as HECS, negative gearing, cuts to CSIRO (Gillard – look it up) and more – however am not in any mood to spoon-feed when “the truth is out there”; try a little research.

  30. David

    diannaat..I have never requested you ‘spoonfeed’ me and find the comment ..well unnecessary but that’s your way so be it. I wont be indulging.

  31. diannaart

    @David

    I, apparently, was not clear enough, I meant research some FACTS (not comments) about Labor’s policies (that the LNP have pumped up) and its association with big business – not difficult to find.

  32. Jaquix

    Labor and the Greens need to challenge them on this Jobs and Growth mantra. WHERE IS THE EVIDENCE ? Just because they wish it will be true, doesnt make it so. I bet they dont have any evidence of their own to back their claim up. But economists must have access to information which gives facts and figures.

  33. Don A Kelly

    Jaquix, this is a copy of a letter that I sent to my local newspaper before the budget speech. It was printed in today’s edition.

    Psychologists universally agree that ‘apart from the death of a family member or a loved one, the worst thing that can happen to a person is to lose their job’. This belief is reinforced by statistics that show increases in male unemployment and suicides.
    The welfare and well being of the population should be the main objective of any Government. The Coalition constantly tell us that they are better economic managers than Labor and that Coalition policies are aimed at ‘jobs and growth’. ABS data kept over a 43-year period from the Whitlam Labor government to present Turnbull government represents close to 21 and a half years of data both Liberal and Labor.
    This study shows that GDP and employment growth both rise at a faster pace during Labor’s period of government. Average annual GDP growth is around $1.7bn higher per year and employment growth is 25,000 people a year stronger during Labor’s period.
    Morrison is correct when he tells us that “more investment is needed from the private sector”. According to the ABS, investment has fallen 23 percent since the Coalition’s 2013 victory. Under the previous Labor government there was a 67 percent increase in private business investment.
    This research was carried out by Stephen Koukalis.

  34. jim

    Well here’s what’s been happening with the jobs and growth/ “Trade Deals” in the honest USA / Canada……..Job Losses..hundreds of thousands of em,

    Quote,When TransCanada announced at the start of the year that it that it was demanding compensation under North American Free Trade Agreement (NAFTA) rules for the Obama administration’s decision to reject the Keystone XL pipeline, many observers saw it as a sign of things to come.

    Indeed, critics of two pending trade deals—the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP)—have already warned that other corporations could take similarly take advantage of the same mechanism to exert their power before private tribunals, demanding compensation for lost profits while supplanting democracy and trampling on workers’ rights and environmental protections. I like the part in the TPP where I heard that, if its cheaper (for the government) to send you overseas to have medical operations/hospitalized then off you go on your own, if thats true then that sucks.

    the new report explains that the TTIP and TPP “would more than double the number of fossil fuel corporations with the power to challenge U.S policies in unaccountable ISDS tribunals,” bestowing them to “100 foreign fossil fuel corporations that own more than 1,000 U.S. subsidiaries—more than the total number of fossil fuel firms that have such rights under all 56 existing U.S trade and investment pacts combined,” the report states.

    Corporations now free to run over all laws,workers rights,gone environment gone,etc…..etc…. laws that our ancestors/men and women fought over hundreds of years to get these laws enacted what have they done?……….http://www.commondreams.org/news/2016/03/24/how-worlds-biggest-polluters-are-two-trade-deals-away-steamrolling-climate

  35. Athena

    Professor Bill Mitchell – Reframing the Progressive Agenda

    Progressives are adopting neo-liberal metaphors when communicating with the public, because the public has been led to believe that this is correct. As a result they leave themselves nowhere to go to get out of the economic mess created by neo-liberalism..

  36. Kronomex

    Jerks and jokes.
    Sell it all.
    Mushrooms and bullshit.
    Corruption and graft.

  37. Pingback: ‘Jobs and Growth’ Mantra to Haunt Morrison from now on. | THE VIEW FROM MY GARDEN

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