$12bn hit to budget revenue forecasts Julia Gillard

[nero_bolt]

When the money’s gone, spend even more and send us into even more debt.... 

Julia Gillard has an unusual approach to budgeting. If the money isn’t there, just spend more:

JULIA Gillard will today reveal a further deterioration in the government’s tax revenue forecasts, with Treasury warning that the federal tax take this financial year will be $12 billion less than predicted last October.

The Prime Minister will say that despite the lower revenue forecasts her key programs of increased school funding and the DisabilityCare scheme “must not be jeopardised”.

“These necessary investments are affordable if we make smart decisions,” Ms Gillard will say, declaring that Labor governs “for all Australians”.

How is $14 billion in disability payments - however well-meaning - an “investment”?

The Government should also come clean on its own incompetence being largely to blame as revenue, while rising, fails to rise as fast as it giddily assumed:

New economic modelling forecasts that Labor’s carbon and mining taxes will together punch a $10bn revenue hole in the budget in the 2015-16 financial year, largely due to the decision to link Australia’s carbon-pricing scheme to Europe’s and the subsequent collapse of the European carbon price.

The modelling, in Macroeconomics’ 2013-14 Budget Bulletin to be released today, predicts the minerals resource rent tax will generate $1.1bn in 2015, less than half of the $2.6bn estimated by Treasury in its mid-year economic update.

Revenue from the carbon package is expected to hover at just more than $1bn in 2015-16, well short of the $9.4bn Treasury estimated would flow into the coffers from a $29-a-tonne carbon price.

Inherited surplus blown, massive debts racked up, and now left defenceless:

Bank of America Merrill Lynch chief economist Saul Eslake warned that Australia “could face significant economic downturn, possibly even a recession” in two to three years, when the construction of several large gas projects across Australia was completed.

The national interest demands an election before September 14:

ACCI chief economist Greg Evans said the uncertainty about the federal election outcome has the small business community worried with firms still doing it tough…

“...there is no doubt the political uncertainty ahead of the Federal election and concerns about the budget deficit, carbon tax and unfunded spending plans such as the Gonski education reforms and NDIS are only adding to the problem.”

Mr Evans said the evidence from the business sector shows that confidence remains “shaky” and ACCI members are in a period of hibernation where they are deferring investment and not taking out new loans.

http://blogs.news.com.au/dailytelegraph/andrewbolt/index.php/dailytelegraph/comments/when_the_moneys_gone_spend_even_more/

[nero_bolt]

Treasury Falling revenue forecasts mean Gonski and NDIS reforms are unaffordable: Joe Hockey

Well worth watching the Sky news video in this story

http://www.theaustralian.com.au/national-affairs/treasury/falling-revenues-mean-gonski-and-ndis-reforms-are-unaffordable-joe-hockey/story-fn59nsif-1226631366297

JOE Hockey says Labor can't afford to fund its Gonski reforms or the national disability insurance scheme, following news of a $12 billion write-down in revenue forecasts to be detailed by Julia Gillard today.

The opposition treasury spokesman said the government was failing to address structural problems in the budget while electing to keep spending as if the money was still rolling in.

“The problem is that in the one breath the Prime Minister says she hasn't got enough revenue coming in, and in the other breath, she's saying she wants to spend more money, much more money, in areas like disability care and education and so on,” he said.

“But the problem is that this expenditure is not sustainable over the longer term if the government has falling revenue.”

Mr Hockey said the opposition was committed to the NDIS, but the Coalition would live within its means in government.

What we will promise, we will pay for. And we'll show that,” he told ABC radio.

He said Labor was spending $100 billion more a year than in the last year of the Howard government, and had accumulated $300 billion of gross debt.

“On this occasion, it is complete hypocrisy for the Prime Minister to be promising major new spending but at the same time to be talking about structural weaknesses in revenue. It just doesn't add up,” Mr Hockey said.

In a speech to the Per Capita think tank in Canberra today, Ms Gillard will say that despite the lower revenue forecasts, her key programs of increased school funding and the disability care scheme “must not be jeopardised”.

“These necessary investments are affordable if we make smart decisions,” Ms Gillard will say, declaring that Labor governs “for all Australians”.

Framing the budget as being “about a challenge and about a plan”, Ms Gillard will promise that the government will not “fail the future by not making the wise investments that will make us a stronger and smarter nation”.

Ms Gillard will reveal that tax revenue forecasts will continue to slip for the rest of this financial year, leaving tax revenue growing more slowly this year than had been forecast.

On today's update, federal tax revenue will be about $340bn in 2012-13, down from the forecast of $352bn last October but up about 7 per cent on tax revenue in 2011-12 of $316.8bn.

“The bottom line for the budget bottom line is this: the amount of tax revenue the government has collected so far this financial year is already $7.5bn less than was forecast last October,” the Prime Minister will say.

“Treasury now estimates that this reduction will increase to around $12bn by the end of the financial year.

“This unusually low revenue, which wasn't forecast even a few months ago, creates a significant fiscal gap over the budget period.”

Finance Minister Penny Wong said the government had to adjust to new budget circumstances.

“Well, there's certainly a new reality, a new economic reality, that the nation has to face and the government has to face,” Senator Wong told ABC radio.

But she said money would be found in the budget to fund Labor's signature policies.

“In the budget we'll be very clear with Australians about the choices that have to be made to make these investments, the right investments for Australia's future,” she said.

Tony Abbott said the government was inaccurately depicting its budget problem as one of income, when revenue was 6 per cent more than at the same time last year.

“There's no way the government should be setting us up for another deficit,” he said.

Greens leader Christine Milne said the Prime Minister should try to raise more money from the mining industry to meet the costs of her education and disability care reforms.

Senator Milne said if the government fixed loopholes in the mining tax it could raise $26 billion, while getting rid of fossil fuel subsidies could save $13 billion over the budget forward estimates period.

“Raise it from those who can afford to pay,” she said.

[windrake]

Looks like the luvvies don't want to hear the truth.

[newstart2380]

I am so scared, I just listened to our PM admit on news 10 (yes it was her and not a stand in), admit the country is in DS and there are going to be massive cuts, massive tax increases and although she promises, YES promises the NDIS and schools will not be effected can you really believe her.

She stated treasury did not know 6 months ago this was going to happen, how come everyone else did knew ? OMG doesn't this make you nervous ?

How much longer do we have to put up with this failed, incompetent bunch of people who have no idea what they are doing ?

[nero_bolt]

Looks like the luvvies don't want to hear the truth.

The luvies and hard core supporters are lost for words on this one and the truth that Gillard has finally admitted, she and swan  and labor has sent us broke and we are all going to pay for their drunken sailor spending.

BUT the luvies are quiet, very quiet on this

[nero_bolt]

Gillard’s latest mega-debt: out of money, out of excuses

The promise:

August 2010, election campaign:

JULIA GILLARD: Well the better economic plan for the future is about bringing the budget to surplus in 2013. We’ll do that.... I’m going to get the budget to surplus.... I’ll get the budget back to surplus in 2013.

August 2010:

JOURNALIST: If you don’t make a, get the Budget back in to surplus in 2012-2013, this is a question to both of you, the cameras are on – will you resign?

PM: (laughs) The Budget is coming back to surplus, no ifs no buts it will happen. 

The failure:

Confirming a $12 billion write-down of tax revenue forecasts this financial year, the Prime Minister said the May 14 budget would not be a typical pre-election budget night…

Less than six months after abandoning her vow to post a surplus this year, Ms Gillard said the government needed maximum flexibility when dealing with such budget circumstances.

“Therefore, I have expressly determined we need to have every reasonable option on the table to meet the needs of the times, even options previously taken off the table,” she said.

The excuses:

... serious, persistent weakness in global growth ... volatility in the global economy… the dollar’s strength… competition from imports is so fierce.

Gillard’s bottom line:

The “bottom line for the Budget bottom line” is this: the amount of tax revenue the Government has collected so far this financial year is already $7.5 billion less than was forecast last October.

Treasury now estimates that this reduction will increase to around $12 billion by the end of the financial year.

The real bottom line:

Total tax revenue last financial year $317 billion.

Total tax revenue fondly predicted for this financial year in the last Budget $355 billion

Total tax renue now expected: $340 billion.

Percentage increase in tax revenue over past year: 7 per cent.

A 7 per cent increase in total tax revenue in one year causes Labor’s budget to blow up?

Good heavens. How dumb was Gillard to count on more in a world in which Europe was stumbling, the US struggling and China slowing? 

http://blogs.news.com.au/dailytelegraph/andrewbolt/index.php/dailytelegraph/comments/gillards_latest_mega_debt_out_of_money_out_of_excuses/

[nero_bolt]

• Old fantasy:




• “The Budget will be back in surplus in 2013 if I’m re-elected.” – Prime Minister Julia Gillard, 2010.




• “We now expect a surplus in three years, three years ahead of schedule.” – Treasurer Wayne Swan, 2010.




• “It’s happening. Failure is not an option here and we won’t fail.” – Prime Minister Julia Gillard, 2010.




• “We’re getting back into surplus in three years. Come hell or high water.” - Treasurer Wayne Swan, 2010.




• “The Budget is coming back to surplus, no ifs, no buts. It will happen.” – Prime Minister Julia Gillard, 2010.




• “We see the surplus in 12-13 as being absolutely fundamental.” – Treasurer Wayne Swan, 2011.




• “My commitment to a surplus in 2012-13 was a promise made and it will be honoured.” – Prime Minister Julia Gillard, 2011.




• “We’ll be back in the black by 2012/13, as promised.” – Treasurer Wayne Swan, 2011.




• “We’ll bring the budget to surplus in 2012-13, exactly as promised.” – Prime Minister Julia Gillard, 2011.




• “The government remains absolutely committed to delivering our return to surplus as we planned.” – Treasurer Wayne Swan, 2011.




• “We stand by the predictions, the entries in the Mid-Year Economic and Fiscal Outlook. We stand by the figures and we’re on track to deliver a budget surplus.” – Prime Minister Julia Gillard, 2012.




• “I am determined to produce a surplus in 2012-2013. We have got our colours nailed to the mast.” – Treasurer Wayne Swan, 2012.

New reality:

“There’s certainly a new reality, a new economic reality that the nation has to face and the Government has to face … this government will actually be very clear with Australians.” - Finance Minister Penny Wong announces the “new economic reality” of a $12 billion budget deficit.

http://blogs.news.com.au/dailytelegraph/timblair/  

[donnashuggy]

Did you write all that yourself Nero?

[fiestas*girl]

clearly not, this armchair political warrior cant string 3 of his own words together

cut n paste and copy, no original thought or view

day in day out its all about politics and cjut n past and copy, week kin week out, thats all his ife is. pathetic really, how sad not top have an original thought, even worse, not being able to express thoughts or communicate as a mature adult....

Actually, this politcal zealot should be banned as a pest and nuisance disrupting the forum with his dreary one eyed view

[cherry*135]

cant string 3 of his own words together.. or is that her;-)