Terry McCrann says Wayne Swan’s five Budgets have left us dangerously exposed:
In fact as we know, in reality, they’ve all been deficits, including the one to come. Six budgets, six deficits. And counting, into the distant future.
Those six deficits by themselves will add to around $210 billion…
Back in 2008 [to counter the global financial crisis], Treasurer Swan had plenty of deficit and debt elbow room to embark on spending, or to simply let the budget bottom line blow out. He of course did both.
Because back then, he started with a $20 billion yearly surplus and zero net debt when the cold winds started to blow.
Further, although we didn’t realise it at the time—and the Government still refuses to acknowledge its positive significance for the budget as well as the broader economy—China would come spectacularly to our help from 2009 on.
None of that, and I mean none of that, is going to be available ``next time’’; assuming there is a ``next time’’; and trust me, there will be a ``next time’’.
We now start with a $20 billion deficit instead of a $20 billion surplus.
We now start with net (federal) debt already at $200 billion instead of being at zero.
And there is no way that China can, far less would even try, to do what it did in 2009, which sent commodity prices soaring and directly and indirectly poured billions into the economy and into Swan’s budget…
Indeed, even relatively optimistic forecasts of what might happen in China over the next few years, point to likely (hopefully modest) falls in commodity prices, a far, far cry from the spectacular increases we saw in 2009-10.
The truth of what happened to those promised Swan surpluses, is that the Government never really reined in spending after the stimulus surge; and it did not face up to, yes, lower, but not as low as claimed, revenues…
The evidence is clear and simple. This is a high-spending, high-taxing Government, that leaves the budget bottom line in entrenched deficit.
And leaves us horribly exposed to the next downturn in the economy
Finance Minister Penny Wong gives away the truth about those “declining revenues” the Government is blaming for its deficits:
the amount of money that’s coming to government for the reasons you and I have already touched upon is substantially less than was anticipated. I mean, the example I give is for this budget year, just two years ago, we were predicting $20 billion more coming in than is and even since the mid-year review in October we’re about $7.5 billion less for this financial year than we anticipated.
Revenues haven’t actually fallen. They just haven’t risen by the wild amounts Labor foolishly assumed, as Judith Sloan explains:
It is your fault, Wayne, for assuming out-of-reach increases in revenue, which you needed in order to continue the sham of a budget surplus being delivered in 2012-13…
Just take a look at the figures, even the ones shaved in the MYEFO. Government receipts were expected to increase from 22.5 per cent of GDP in 2011-12 to 24 per cent in 2012-13 - by 1.5 percentage points in one year!
Revenue was expected to rise by 11.3 per cent or more than $37 billion. Were we supposed to take these estimates of revenue seriously, when we always knew that nominal GDP growth was unlikely to exceed 6 to 7 per cent?
Actually, growth in government revenue has not been doing too badly in the current financial year, averaging about 7 per cent growth on an annual basis.
A government of spenders not savers, fantasists not realists.
http://blogs.news.com.au/dailytelegraph/andrewbolt/index.php/dailytelegraph/comments/money_gone_leaving_us_defenceless/
