- This year’s Budget confirms that Labor’s financial and budget management is in complete chaos.
http://www.liberal.org.au/latest-news/2013/05/14/budget-2013-more-debt-more-chaos-more-spin
Budget 2013 delivers more debt, more deficits, more taxes, more broken promises and more uncertainty from an incompetent Labor Government that can’t be trusted.
The Budget does nothing to help Australian families deal with rising cost of living pressures, economic uncertainty and poor services.
After six years of chaos, debt and spin, Australians are desperately seeking stable and competent economic management.
Tonight, Labor has again failed to deliver. Julia Gillard and Wayne Swan have failed to set out a credible economic strategy for the coming twelve months, let alone for the next decade.
Budget 2013 delivers the following:
- total gross debt to breach the $300 billion debt ceiling within the forward estimates;
- Labor’s fifth record deficit in five years and at least two more deficits to come;
- record net debt of $192 billion;
- no credible path back to surplus;
- more broken promises such as scrapped tax cuts and family payments; and
- more than $25 billion in higher taxes over the next four years.
A Budget that is supposed to be about “jobs and growth” delivers higher unemployment, up to 5.75%, and lower growth, down to 2.75%. In fact, the Gillard Government in its own Budget stands for higher unemployment and lower growth.
Last year Australians couldn’t trust what Julia Gillard and Wayne Swan promised; and this year is no different.
Record Labor debt
The Budget papers reveal that Australia’s gross debt will breach Labor’s $300 billion debt ceiling within the forward estimates.
The Budget papers foreshadow a further increase in the debt ceiling, stating that: “The Government will legislate to increase the limit as it becomes necessary”.
At the last election, Julia Gillard promised that Australia’s net debt would peak at less than $90 billion. This Budget reveals that net debt will now peak at over $191 billion – more than double what was promised by Julia Gillard.
Five deficits in five years – and at least two more on the way
Tonight Wayne Swan has delivered his fifth record deficit in five years with at least two more years of deficits to follow. This will be Labor’s 12th deficit from its last 12 Budgets. The last Labor surplus was in 1989.
Last year Wayne Swan promised a surplus of $1.5 billion, but instead he has delivered a deficit more than 12 times as big – at $19.4 billion.
In last year’s Budget speech Wayne Swan promised that:
“This Budget delivers a surplus this coming year, on time, as promised, and surpluses each year after that, strengthening over time.”
He promised that:
“The deficit years of the global recession are behind us. The surplus years are here.”
Labor has a spending problem, not a revenue problem.
Revenue in 2013-14 is projected to be $80 billion higher than at the end of the Howard Government – yet Wayne Swan plans to deliver his sixth deficit in a row because spending in 2013-14 will be $120 billion higher than at the end of the Howard Government.
In his Budget speech Wayne Swan blames the high Australian dollar for having “savaged” revenues – yet this is the one assumption in last year’s Budget that was actually right!
With Australia’s terms of trade still extraordinarily high – 15 per cent higher than at any time during the Howard Government – the Budget should already be back in surplus.
But over the last 5 years, the Government has spent $192 billion more than it has raised.
Expenditure as a percentage of GDP has been higher every year under Labor compared to the last years of the Howard Government.
No credible path back to surplus
Labor’s planned return to surplus is not credible and presents a potential black hole in future Budgets.
The claim of surpluses in the two out-years relies on virtually no further deterioration in the terms of trade in the next two years.
This is a heroic assumption and puts at risk the projected small surpluses in the two out-years. It assumes the terms of trade will remain far higher than in any year of the previous Coalition government.
The great disappearing mining tax
The forecast revenues from the mining tax personally and secretly negotiated by Julia Gillard in June 2010 have collapsed from $22.5 billion to $3.3 billion over its first four years.
Mining tax revenue in 2012/13 is a staggering 95 per cent below Wayne Swan’s original MRRT revenue forecast.
And the Spreading the Benefits of the Boom package, which was the centrepiece of Wayne Swan’s last three Budgets, seems to have been deleted from the Budget papers altogether.
Despite the comprehensive failure of the mining tax to raise any meaningful revenue so far, Wayne Swan’s 2016-17 surplus promise relies on mining tax revenue increasing by more than ten times from its level this year!
Carbon tax revenue projections remain unbelievable
Despite the crumbling EU carbon price, the Government continues to forecast receiving $38 a tonne in 2019/20. While the forecast carbon price for 2015/16 has dropped to $12 a tonne – at a cost of over $5 billion to revenue – it remains more than double the European market forward price for 2015 of $6 a tonne.
Higher taxes, fewer jobs and more broken promises
The Budget delivers more than $25 billion in higher taxes over the next four years – 99 per cent of which will hit Australians after the next election.
In fact, 60 per cent of the Government’s deemed savings are new or increased taxes.
Families have been let down yet again by a Government that has scrapped promised tax cuts, family payments and now the Baby Bonus.
Two years ago Wayne Swan promised there would be 500,000 jobs created by June 30 this year. So far, with less than two months of this financial year to go, he has delivered barely half that number – another broken Budget promise.
Border protection Budget blowout
The Budget papers reveal yet another blowout in the management of Australia’s borders by at least $4.7 billion since last year’s Budget. The Budget also assumes that boat arrivals will “phase down” over the next four years despite arrivals now at a record level.
