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.
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.
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.