ELECTRICITY” Bill and “debt and deficits” Chris have both announced their utter political ineptitude by the positions they have taken on repealing the carbon tax and the increase in the government’s debt ceiling.
In each case, they should have let the disastrous policies and consequences of their predecessors, former prime minister Julia Gillard and former treasurer Wayne Swan, die and be quickly, if not entirely quietly, buried with the political careers, such as they were, of those predecessors.
“Electricity” Bill — Shorten — had nothing directly to do with Gillard’s dreadful, and deliberately deceitful “there will be no carbon tax’’ promise.
Other than, of course, his generally stated “I agree with whatever she said, even though I don’t know what it was,” approach.
Similarly with Bowen. He had nothing directly to do with the $200 billion-plus of deficits and still counting, and consequent increased government debt, run up by Swan.
Other than, of course, by sitting in cabinet with all the other “yes” men and women, nodding off on all the policy waste and stupidity.
They could have said: That was yesterday; I’m now the Labor leader not Julia, or for that matter Kevin; I’m now the shadow treasurer, not Wayne, who was of course, a shadow of a treasurer.
Instead, each has opted to “own” their predecessor’s disaster. “Electricity” Bill has wrapped Julia’s carbon tax around himself, and “debt and deficits’’ Chris has taken ownership of Wayne’s red ink.
Let it be absolutely crystal clear, there is one reason and one reason alone that the new government has to lift the debt ceiling. Because of the continuing budget deficits left by the previous government.
Those deficits didn’t suddenly end on September 7. Huge deficits are locked in for at least the next three years; in my judgment, considerably longer than that.
Yes, the new government has taken some decisions that will increase the deficit. The two biggest are the $8.8 billion payment to the Reserve Bank and the $8 billion cost of abolishing the carbon tax. But spread over four years, those sums are relatively trivial against the $30-40 billion of deficits every year, that the previous government dumped on them.
Actually, on us — as we’ll pay for them.
Indeed, the RBA payment is better seen as mostly a cost that should have been recorded in one of Swan’s budgets.
Back in 2009-10 Swan made the RBA pay a $5.2 billion dividend. New Treasurer Joe Hockey is essentially just returning that money.
Lifting the debt ceiling from $300 billion to $400 billion simply won’t be enough to cover Labor’s deficits that are still to come; what were Swan’s deficits, but which are now also “debt and deficits” Chris’s.
In its pre-election budget update — self-evidently, before Hockey had got anywhere near the budget levers — Treasury estimated that gross debt would reach $370 billion in 2015-16 and stay there through 2016-17.
So, a lift in the debt ceiling to $400 billion might seem sufficient. That it would only need to go higher, if the new government was intending to add its own deficits.
That is simply not the case. The debt calculation is as dodgy as the Treasury’s simplistic assumption in its pre-election “analysis” that the budget would whirr back to balance in 2016-17.
In Treasury’s calculation the budget deficit drops sharply from $24 billion in 2014-15 to less than $5 billion in 2015-16 (and then to a tiny surplus in 2016-17).
This is purely on the assumption that the economy just whirrs back to good growth. A far more realistic outcome is that the budget will still be deep in deficit in at least the 2015-16. year and probably also 2016-17. Deep, in Labor deficit.
We will see a normal estimate of the 2015-16 deficit, not a mere “assumption”, for the first time in the budget next May.
I suggest it will push the estimated gross debt above $400 billion. So the ceiling needs to be lifted to $500 billion to cover those Labor deficits.
“Electricity’’ Bill should have “left’’ Julia’s carbon tax with her. Instead, he’s announced “there will be a carbon tax under a government I lead.’’
He’s done so in the same week we are seeing yet another useless, carbon dioxide-belching feast of thousands of global warming main-chancers get under way in Warsaw.
No doubt the actuality of any cuts to global CO2 emissions will be the direct opposite of the extravagant claims that will made about the promises — promises, promises, schmomises — made in Warsaw.
What a difference four years and trading in a teenager-prime minister for an adult makes.
In 2009, that teenager PM Kevin led 119 over-blown Aussies to (rather chilly) Hopenhagen, to sing a climate Kumbaya with 15,000 or so other CO2 belching warmists.
He slunk away from what turned out to be Copenfloppen, as the world turned away from any serious commitment to CO2 cuts.
But the great warmist gravy-train rolled on through successive and equally pointless climate summit after successive climate summit and is now in Warsaw for 12 days of literal and figurative CO2 belching.
The adult now in the room, PM Abbott, is keeping both himself and Australia far away.
The whole climate fiasco will probably collapse in the run down to the 2016 election, leaving “Electricity” Bill and his promise to bring back the carbon tax, pretty much all on his own
