Current Affairs: The Budget
Opinion polls and the public generally seem to believe that the Liberal Party is a superior economic manager to the Labor Party. There are also signs that the Liberal Party believes this about itself.
But the somersault in last night’s budget was extraordinary. I don’t think I have ever seen a government repudiate so quickly – what it had been telling us for years – how it was necessary to ensure our future. We had dire problems of debt and deficit that the former government had bequeathed to the Abbott/Hockey government.
The debt and deficit rhetoric and actions taken in the 2014 budget have now been abandoned. The 2014 budget is a smoking ruin.
If a private or public company was managed like the Australian economy the whole board would be sacked.
The budget may be politically cute but our economic future is prejudiced. The headline in today’s AFR sums it up ‘Hockey spends up as deficits hung out to dry’. In the SMH Ross Gittins said ‘This is the budget of a badly rattled government that has put self-preservation ahead of economic responsibility. It will do much to restore Tony Abbott’s political fortunes but next to nothing to return the budget to surplus or hasten the economy’s return to strong growth.’ John Menadue
See below a post I made on this subject on 23 March 2015.
There is not fire after all. There is no emergency.
For the last 18 months Tony Abbott and Joe Hockey have been talking endlessly about a deficit and debt disaster. Clearly we should have been calling in the fire brigade to quell the fire that the Labor Government had lit.
We were told that there was a 13% debt to GDP ratio that the government had inherited. That debt would bring disaster unless the government took dramatic action to fix it. Joe Hockey told us only last week in releasing the report of the Intergenerational Review that the budget projections were so bad that we would ‘fall off our chairs’ when we saw them.
Yet since this government came to power, the budget deficit has deteriorated $80 billion over the Forward Estimates.
So in light of the desperate situation the government inherited and the deterioration in the budget under its own watch, what does the government do?
Tony Abbott now tells us that we can forget about any budget emergency and all the dire predictions of the past. He told us only a few days ago that the next budget would be dull and that all the heavy lifting had been done. He assured us that there would be no more unpleasant medicine. He inferred that a nett debt of even 60% to GDP was no problem. He indicated that in the next budget, we would have tax cuts for small businesses and a revamped child care and family package.
I don’t think I have ever seen a government repudiate so quickly what it was telling us was so necessary to ensure our future. We had dire problems that had to be fixed. The government has now abandoned the rhetoric and its policies of the last 18 months.
And its 2014 budget is a smoking ruin.
How can Joe Hockey with any credibility present his next budget? The narrative of the last 18 months has all been torn up. He and the government by their own actions have discredited their own claims to being good economic managers. Billie McMahon did better than this.
In the Australian Financial Review on March 19, 2015, Laura Tingle put this mess together under the heading ‘Being governed by fools is not funny’. She is dead right. See link to her article below.
The government now wants us to believe that there was no emergency and no fire at all. It was all made up.
But the problem is that we do have budget difficulties that must be soberly and carefully addressed without penalising the vulnerable in our community.
What a mess!