“TONY Abbott and Joe Hockey are convinced the government will be punished electorally if it does not produce a tough budget, and they believe there is a “public appetite” for decisive action to get the economy back on track.”
Sounds good? Well let’s get real here. Nothing pisses me off more than getting lied to and you, Mr Hockey, are really pissing me off. Listening to you rail at Labor this week, exhorting them to tell the truth as you told lie after lie, nearly made me choke. There is a “public appetite” for the truth so time for a reality check.
Firstly, to label MYEFO as Labor’s last budget fools no-one. It was produced over three months into your term. You were elected because you said you could fix the problems. The blame game is over sunshine, it’s on your shoulders now and you have wasted one sixth of your term in office crying.
The PEFO report is an independent report by the Secretaries to the Treasury and the Department of Finance that provides updated information on the economic and fiscal outlook. These are the same people who advised you for your MYEFO report so to accuse Labor of lying about the figures is rot.
PEFO showed the cumulative projected budget deficit for the years 2013 to 2017 as $38 billion. MYEFO, prepared under your watch, shows a deficit of $106.6 billion. To quote your own document
“The $68.1 billion deterioration in the budget position since the 2013 PEFO reflects two key factors:
- the softer economic outlook; and
- essential steps to address unresolved issues inherited from the former government”. (otherwise known as YOUR spending decisions).
You go on to say:
“Firstly, a softening in the economic outlook has resulted in significantly lower nominal GDP, which has largely driven the reduction in tax receipts by more than $37 billion over the forward estimates.”
In the face of falling taxation revenue how does the Coalition react? They forego $2.9 billion revenue in tax and superannuation measures announced by the previous government.
Getting rid of the moves to tighten the requirements around tax benefits associated with salary packaging a car under Fringe Benefits Tax rules cost us $1.8 billion. All that was required was for FBT claims of business use to be legitimate, verified by a log book filled in for 3 months once every five years – hardly an onerous task.
Joe and Tony said it would cost jobs in the car manufacturing industry. Well subsequent actions by the Coalition show that concern to be a sham as they went about dismantling the industry from their first day, so I can only conclude that they support fraudulent claims of vehicle business use as a legitimate form of tax avoidance.
Moves to tax earnings of more than $100,000 on superannuation pensions and annuities at 15 per cent instead of being tax-free have also been repealed. This move cost us $1 billion to allow the 16,000 wealthiest superannuation recipients to pay no tax at all on an annual retirement income of over $100,000. These would include the people that John Howard permitted to put $1 million into superannuation tax free in 2007 as a vote buyer.
The cost of tax concessions for superannuation continues to grow by about $5 billion per year and will soon top $50 billion.
The revised projections for revenue from the mining tax showed it raising $3.3 billion over the forward estimates. You may call that nothing but think what those charities you have cut funding from could have done with that. Perhaps the childcare and aged care workers could have got that pay rise after all. You cannot say, on the one hand, that it raises no revenue and then on the other, say it is a burden on business that is costing jobs and investment. All this at a time when record mining industry profits have outstripped growth in taxes and royalties.
The Coalition have also pledged to reduce company tax by 1.5% which will cost us $5 billion. One reason given for this is to offset Tony’s paid parental leave scheme levy. Tony and Joe assure us that PPL is fully funded by a 1.5% levy on businesses with a turnover of over $5 million – they neglect to mention that the country loses $5 billion which will now be diverted to pay wealthy women to breed. Let’s just imagine that we had someone sensible in charge, scrapped Tony’s PPL scheme, scrapped the reduction of company tax, and kept the 1.5% levy on the top 5000 businesses. We would have an extra $10 billion a year to spend on, oh I don’t know, renewable energy perhaps?
The carbon price raised $6.6 billion in its first year which was passed on to households, trade-exposed industry, and research and development grants. Repealing it could punch a hole as big as $7.6 billion a year in the budget. Compare that to the Coalition’s Direct Action fiasco which will not raise revenue and cost the budget $3.2 billion over the next four years. Instead of collecting about $30 billion and taking action on climate change we will be paying over $3 billion to polluters – makes sense, NOT.
Moving on from the revenue side to spending, MYEFO tells us that the majority of the $17 billion deterioration in this year’s budget is due to Coalition spending decisions.
As soon as Joe Hockey got the keys to the safe he borrowed $8.8 billion and gave it to the Reserve Bank of Australia in what has been described as a gamble on the foreign exchange market. The RBA certainly didn’t ask for Hockey’s $8.8 billion capital injection and didn’t think it was necessary. It wanted to rebuild its capital over several years by retaining its profits and not paying the government dividends. Hockey’s $8.8 billion injection this year means dividends will be paid to the government over the next few years.
So the truth of this exercise is Hockey wanted Labor’s deficit to look bigger and he is happy to blow several hundred million dollars interest a year in an attempt to make his performance as Treasurer look good.
After years of abuse about the cost of Labor’s asylum seeker policy, Hockey added an extra $1.2 billion for offshore processing. Presumably this will be spent on extra guards and orange life rafts and bribes to other countries to see to our problem.
An extra $1 billion was allocated to fund eight infrastructure projects that were to be funded from the former Government’s Regional Infrastructure Fund which was paid for by the mining tax. Instead of the MRRT providing the funds, they will now come direct from the taxpayer as the Roads Prime Minister fulfils his dream. And now we have Matthias Corman telling us that the possible $4 billion raised from the sale of Medibank Private will also be spent on roads. Enough with the roads already – we don’t want to become another Beijing. How about another airport for Sydney or high speed rail or urban public transport?
Hockey goes on to say that “Without any policy changes, the budget is projected to be in deficit in each and every year to 2023‑24.” A little further down the page we read that “The Government is committed to returning the budget to sustainable surpluses that build to at least 1 per cent of GDP by 2023‑24.” Ummmm, what’s the difference? Does that mean that you intend to make no policy changes, or that your policy changes will make no difference?
Much has been made of the promised Commission of Audit. MYEFO stated that:
“The Commission of Audit will be guided in its work by the principles that government should:
- live within its means;
- have respect for taxpayers in the care with which it spends every dollar of revenue; and
- do for people what they cannot do, or cannot do efficiently, for themselves, but no more.”
Considering what you are prepared to spend money on – fleets of joint strike fighters, submarines, unmanned drones and one-use orange life rafts, $10 billion to keep asylum seekers locked up, gold plated paid parental leave, grants to polluters, billions a year on fossil fuel subsidies, endless reviews, audits, white and green papers, and Royal Commissions, bigger new planes so Tony can accommodate the film crews in VIP luxury, a $70,000 pay rise for Campbell Newman, $16 million for Cadbury – I think it is YOU who should be fearful of what the Commission has to say.
Rather than telling all of US to tighten our belts and prepare for big cuts, how about you think about your priorities. You are throwing away money by your tax cuts and your spending priorities are crazy. I will be interested to see if the Commission of Audit agrees with me, or will those bits be excluded from the censored version? It’s amazing how this government, champions of free speech, refuse to release documents and information and when they do, they redact so much it reads like a tv guide.
At the risk of sounding sexist, perhaps having a few more women in Cabinet might help. They are often better at seeing the big picture and making the most of the income you’ve got.
Stop the theatrics Joe. We are on to you. The dispatch box is your stage, but your script of blaming Labor and giving misleading information is becoming very tired. Every time you and Tony spoke this week, in your softening us up for the budget, you said Labor left us with a debt of $667 billion and cried shame shame at the Opposition. Well shame on you for your purposeful distortion. To counteract your manipulation, and to make sure the public understands the truth I will once again quote from your own document.
“Net debt is forecast to be $191.5 billion in 2013-14 and reach $280 billion in 2016-17.”
Let’s get real here!