Treasurer Wayne Swan
By CHARIS PALMER
Treasurer Wayne Swan has acknowledged it’s unlikely the Government will deliver the budget surplus it had been promising for next year.
“There has been a substantial hit to profits that Australian companies have experienced in the early months of this financial year,” Mr Swan told journalists in Canberra yesterday.
“What we’re seeing in our own numbers today means that $160 billion has been ripped from the budget bottom line over five years.”
The Treasurer argued that it was falling revenues rather than increased government spending that was hurting the budget outcome, adding that it would not be responsible for the government to continue to make up the revenue hole if it threatened growth or jobs.
The Conversation has collected reactions to this news from economic, business and political experts.
Sinclair Davidson
Sinclair Davidson, Professor of Institutional Economics at RMIT University
It was inevitable, mostly because this is a government that spends too much money. Every year they’ve been talking about cuts but these cuts have always been on future expenditure or proposed expenditure. They’ve never actually cut current expenditure.
I think the government has been right in trying to return to a budget surplus. It is good policy to have a budget in balance or surplus rather than deficit. Unfortunately they haven’t had the fiscal discipline to cut the spending they should have.
Dr George Argyrous
George Argyrous, Senior Lecturer at University of New South Wales
The attempt to achieve a surplus bought about its own undoing – as you try to achieve a surplus through austerity all you do is drive economic growth downwards, with the implication you’re more likely to get a deficit.
They’ve actually contributed to bringing about a deficit rather than achieving a surplus.What the government should do is just accept that occasionally governments go into deficit and that’s a normal way of coping with slowdowns in growth.
It’s like someone running up a hill – you have to breathe hard to get up the hill but you relax a bit when you’re coming down. The economy’s still running up a big hill.
John Wanna
John Wanna, Sir John Bunting Chair of Public Administration at Australian National University
I actually think it was worth the government aiming to bring a balanced budget in. That has been a big control on their spending, and I think that has been important.
Having now realised that they’re going to have to relax that commitment is probably pragmatic, and probably expected. But I think having that target was important: because when governments don’t have targets, it makes them flail around a lot more.
Tim Battin
Tim Battin, Senior Lecturer, Political and International Studies, School of Humanities, at the University of New England
The surplus admission from Wayne Swan is not surprising. But what is remarkable is the way in which he got himself cornered in trying to achieve a surplus, when international conditions didn’t favour a budget going to surplus. It wouldn’t have been good policy to try and persevere when the conditions didn’t warrant it.
I think the taxation debate is a healthy debate to have — to discuss our revenue requirements. One possibility is that unless some people seize an initiative and look at the way in which our revenue is inadequate — that is, our tax is too low — the initiative will certainly be taken up by others who will argue that we need to increase direct taxation.
Nick Economou
Nick Economou, Senior Lecturer, School of Political and Social Inquiry at Monash University
This announcement is a reality check about a number things. It’s a reality check about the state of the Australian economy. But it’s also a reality check about any idea that the government might have been going to a March election.
It looks like the strategy now will be to say to the community: look, in the interest of realism we have to abandon this silly idea of a surplus. It’s probably the wise thing to do – most responsible economists would agree.But will this damage them electorally? It seems to me that they’re already damaged anyway. They could make a virtue out of being seen to be pragmatic. Say to the voters: we had this promise of the surplus but the economic situation now doesn’t warrant it, we’re responding to what’s going on. The opposition will criticise them no matter what they do.
The opposition has responded to the government’s announcement at a press conference in Sydney today.
Tony Abbott said: “You just can’t trust this Government to manage the economy and you just can’t trust this Government to tell the truth…. For three years, they’ve been boasting of this surplus. For three years they’ve been saying that this surplus was the badge of their economic credibility. Well, they don’t have it any more.”
A version of this article was originally published at The Conversation and has been republished with full permission. You can read the original article here.
Charis Palmer ran her own subscription media business for seven years before joining Australian Independent Business Media where she helped build and launch Technology Spectator. She later became editor of Business Spectator.
So… No surplus. Do you think it matters? Do you care if the Government actually delivers a surplus?
Comments
74 Comments so far
Unfortunately we are experience the end results of a growth economy based on finite resources. Add globalization to the mix, and all ends like a pile of dominoes. Australia is just a localized point that relies on – and is affected by – the economies of the other countries in the world who trade with it.
While we have had crises and recessions before, this time it is different because our global economy has never been so tightly interconnected before. The ‘global financial masters’ have been putting band-aides on the leak holes of the entire global system for a few years now, but the whole system is about to come down.
Wayne Swann’s comment is no surprise to me. I was more surprised at his original forecast of putting the country into surplus.
One needs to realize that the growth economy that created the middle class and the luxury we are now used to has only been around for the past 150 years. And throughout this time, in our haste to profit faster than our neighbour, we have done more destruction to the planet than in the entirety of its existence beforehand. Even if we could afford to continue in a fast growth economy, the planet cannot.
A pressing question is, what will we do once the localized governments go bankrupt? such as Spain, for example, and what is about to be unleashed in the USA.
Ultimately there is a way that works, and that is to create caring communities that help one another. and these communities helping other communities, creating a global network of care.
It starts with a change in our attitude toward one another. Perhaps we can look at ways to start to foster this sort of mentality in our general society.
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Well lets hope they don’t resort to the Howard years and sell everything that isn’t nailed down. That’s been a complete stuff up and the money certainly wasn’t put back into Australia’s infrastructure, health or education. Thankfully some of it was there for the stimulus packages that protected us from the horrors that beset the rest of the world. The only countries making headway out of that tragedy are the ones that went heavy on the stimulus and dealt harshly with those that should have known better. Taxation revenue will be down due to the large number of foreign investors in our companies and our land. As if they are going to pay taxes here, what a joke. Sell it and it is gone and so are all the benefits and revenues and this government seems to think it all okay as well. Shallow, greedy short sighted madness!
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We had determined that Treasury’s forecasts were hopelessly erroneous and a surplus was unachievable back in May. Alarmingly we predict increasing deficits for the next 4 years. I care because passing debt debt to our children after having record terms of trade is not only irresponsible, it is immoral. Labor simply cannot control their spending. Too many mates to look after and favors to be done. Swan has known this for some time but waited for the Christmas period when people are preoccupied with drinking to announce his latest failure.
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Don’t care that we will now have a deficit (although a surplus is preferred). Don’t care that the Government broke a ‘promise’ (policies must adapt to current economic conditions, and frankly they should have given up on the surplus idea a year ago).
What I do find alarming is the complete failure of forecasting data on business revenues over a very short period of time (months) from Treasury. Not good enough from supposedly the best economic ‘heads’ in the country, and I’m wondering why nobody is calling for resignations for such a complete stuff up.
Makes me wonder what pressure has been put on Treasury to fudge the numbers.
Also makes me worry about the real state of business, as lower business tax revenue means lower business profitability.
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I don’t listen to political rhetoric as being about making promises – I hear them saying what works at a particular point in time, sometimes with the information they have available to them, and at other times, because they think its what the public want to hear.
So no, none of this ‘no surplus this year’ surprises me, and no, I’m not concerned. Australia will survive this deficit, then we’ll get a surplus, then a deficit, surplus and on it goes.
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Of course it matters!
This Labor government said there would be a surplus……. And I’m sorry…. they completely f@#ked up because they are a government that doesn’t lie to it’s taxpayers………or are they?
They knew all along they were in the red and Blind Freddy could see that this “surplus” was never to be, and won’t be for many years due to the Labor government’s mismanagement.
If it was a business, we would be calling for blood wouldn’t we?
Can’t wait for the next election……
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Oh get real here, Happymum !
It doesn’t matter because….the Labor Party says that it doesn’t matter. “We’ll tell you what to think”, is it’s mantra.
Actually a surplus does matter. Consider your credit card, if you will. You can spend and spend, but when you reach the limit on the card you are well and truly buggered.
Well…the credit card that is the Australian economy has been bashed and bashed. Start trembling now ! It’s about to concern you. Greatly !
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Yes it matters. But only to the 20 % of the electorate that actually think about who they are going to vote for. The others will vote the way they always have no matter what.
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All political parties do this (break promises). Remember Howard coming out with his “core and non core promises” to explain away the Coalition’s broken promises?
Personally I would rather have deficit, services and people employed to provide them than a budget surplus, lacking services and high unemployment.
I know it’s horribly simplistic and I don’t pretend to be an economic expert, but are our direct taxes high enough?
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Personally I don’t really care if we’re in surplus or not at the end of this financial year – as long as we’re there within the next 18 months after that.
However I am having a good chuckle ot those lemons in the Labor party banging on about how hell or high water they were going to get their surplus this financial year….don’t they look like the fools. Obviously none of them have ever worked in sales before…underpromise and over deliver as opposed to their special brand of overpromise and underdeliver that seems to be happening time and time again.
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Well you learn something new every day….who knew you needed a penis to be sought out as an “economic, business and political expert”?
Nice work The Conversation.
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And be an academic
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No, I do not care. No, it does not matter. No, I definitely will not be voting for Tony Abbott, or any Liberal Party person. I do think however, that Mr Swan could have couched his *promises* about a surplus in a way that would not have left him open to further negativity from the opposition by saying that “every endeavour was being made to bring about a surplus but that it may not happen”. We do not have any reason to complain about our economy at all.
Spare a thought for America and look at these unemployment figures from Arianna Huffington of The Huffington Post:
“Yes, the unemployment rate ticked down to 7.7 percent, and 146,000 jobs were added. But the drop in unemployment was largely the result of people leaving the workforce, as an estimated 350,000 of them stopped even looking for work, dropping the civilian labor force participation rate down to 63.6 percent, a near 30-year-low. In addition to the 12 million counted as unemployed, there are now nearly four million people who have left the workforce or who didn’t even try to enter after graduating from school. Nearly five million people have been unemployed for six months or more, accounting for 40 percent of the unemployed.
As Dean Baker notes, with the previous two months being revised down by nearly 50,000 jobs, the average growth for the last three months is only 139,000. “At the current pace,” he writes, “we would not see the economy returning to full employment for another decade.” Horrendous.
http://www.huffingtonpost.com/arianna-huffington/fiscal-cliff-negotations_b_2285716.html
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It’s time to quit the partisan whining. We’ve got no reason to complain about our economy right now. Look at Europe & the US. Still want to whinge?
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Spot on. Having lived in L.A for the past 18 months and seeing the extreme poverty, unemployment, lack of accessible health care, homelessness etc etc etc we have NOTHING to complain about. On Fridays we don’t teach in L.A because the state can’t afford to pay us so our kids get 4 days a week and despite asking if we could teach unpaid, the government locks the schools down.
If you’re worried about not having a surplus consider a government that can’t afford to pay the most needed workers. One county in northern California no longer has police or firefighters and the town is slowly emptying out as the gangs take over the streets….
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That is beyond frightening.
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Don’t let any LNP supporters hear that! They like to believe we are in REALLY bad way and that this country is going down the drain!
Watch SBS world news or even ABC and see how lucky we are.
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Frankly my dear, I don’t give a damn. Still won’t make me vote for Abbott.
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I doubt that you would even if your life depended upon it. Much like nothing would inspire me to vote for the current Labor government regardless as to who was leading it !
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I prefer a deficit to a surplus.
To me it means the government are actually spending money on things, instead of making budget cutbacks to prodiuce a surplus (ie smokescreen) to try and fool the Australian public into thinking that we have all this extra money left over, which we clearly don’t.
Everyone knows that health, education etc are all severely lacking in funding in this country, this whole surplus thing is a complete joke to me. The poloticians obviously think we’re all incredibly stupid.
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Of course I care and of course it matters. Two reasons immediately spring to mind.
Number One, it’s another example of this Government’s inability to manage the economy. Labor have delivered the four biggest budget deficits in Australia’s history. John Howard left this country in amazing economic shape that allowed us to ride out the GFC. This Government has destroyed all of that.
Secondly, yet another promise broken:
Julia Gillard 2011: “My commitment to a surplus in 2012-3 was a promise made and it will be honoured”
Wayne Swan 2010: We will deliver a surplus “come hell or high water”
Remind anyone of the Carbon Tax we would never have under a Gillard Government?
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Well, no, because Julia Gillard said she was determined to put a price on carbon.
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I’m a little hesitant to reply to this, as it seems more ideologically- than evidence-based, but some of these assertions must be tested.
The reason we have a forecast deficit for the next FY is because tax receipts have dropped dramatically — not because the government is spending like a drunken sailor. Tax receipts have dropped dramatically because, whether we like it or not, ours is a medium-sized economy in a massive global economic environment, which has slowed. To further prune spending would risk damaging to an already weak economy, tax receipts would drop further still but expenditure of unemployment benefits would go up, etc. and we’d get locked in a death spiral.
We’ve had four deficits in a row because we had the GFC. They’re very modest as a % of our GDP and our economy is considered globally to be in extremely good shape. I’d recommend comparing our deficits and our economic growth stats to our peer economies in the OECD.
The ‘promise’ of a surplus made at the last election was based on the available Treasury forecasts and advice at the time — these have now been revised. I’m not sure how or why we all ended up with this ‘surplus always good/deficit always bad’ blind belief, but I guess not many of us paid enough attention in high school economics. Surpluses as a general rule are worth aiming for, but not at any cost. They can and will strangle an economy if the underlying (global) conditions are not healthy.
If you still believe that the ALP are poor economic managers, which isn’t historically borne out by any peer-reviewed academic research, then please do read the recent OECD and IMF reports on the Australian economy, and what they have to say about this federal administration’s performance, particularly compared to our peers. Alternately, recent RBA publications are also helpful (and easy to read). Ross Gittens had an typically well-explained piece in the SMH recently as well.
And for once and for all, please check the ATO/legislative definition of a tax. The fixed price on carbon isn’t a tax. It wasn’t ALP policy at the election, but a price on carbon was. The Government had to compromise and agree to a short-term fixed price to achieve the larger goal of a price full stop. This was and is a small compromise so we can transition to a low carbon economy and meet our agreed UNFCCC/Kyoto targets.
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Thank you, thank you, thank you!!! For explaining very simple what I know but could never put into words!
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Totally agree SBDH. It’s not as simple as “surplus vs deficit”, it’s about balanced risk taking into consideration what’s going on around you.
We run our household in deficit (currently about $300K just on the mortgage). But it was a calculated risk to borrow that money ie: at that time both my partner and I were in full time employment. We’ll be in deficit for quite some time.
But should the conditions change (and one or both of us lose our jobs) then we’ll reconsider. Probably sell the house, make a small profit, rent a new house and live in surplus.
It’s a fluid concept and not black & white (deficit = bad, surplus = good). It’s just one economic indicator and debt always needs to be considered alongside your ability to re-pay i.e. debt as a % of GDP, in which case Australia is doing just fine.
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A BIG thank you! This article should be published in all major newspapers and on internet as well. No biased towards any party politically, just a clear explanation about few things which some people found it hard to understand.
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So, you’d like a surplus, but you’re against further taxes?
How’s that work?
Please compare our International credit rating of AAA & Stable vs the rest of the world and you’ll see that our economy is one of very few countries to hold this ranking. This ranking was attained under a Labor govt, not Coalition. This is the first time that Australia has had the best ranking granted by all these agencies. Under a Labor govt!
http://en.wikipedia.org/wiki/List_of_countries_by_credit_rating
These ratings are ‘spin’ free, in that they’re created by international credit agencies, Fitch, Standard & Poor’s, Moody’s and Gadong. These companies are not based in Australia and have no Labor or Liberal affiliations.
These companies have all left Australia’s credit rating unchanged after the ‘no surplus’ announcement.
I think the old ‘Labor are poor economic managers’ chestnut is getting a little tired, don’t you? It’s just Coalition spin.
Your statements also utterly ignore the fact that the GFC has been burning everything down around us for the past 3 years.
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Thank you for your comment and references? I agree that the old Labor as poor money managers is getting old. They both have done good and bad in the past (and present).
Thank you also SBDH for your well thought out comment.
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How about the governement reduce spending in wasteful areas and redirect it to areas today will stimulate the economy. It’s not just increasing taxes that will drive a surplus.
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Like what? Any suggestions?
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Yeah, I conveniently ignored that one. BUT, in a two speed economy, in my opinion, we’d be better off taxing the mining side and using that tax revenue to indirectly stimulate the lagging industries.
Not that I think that our economy is doing badly relative to the rest of the world.
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No he left one hell of a mess. He may have had money in the bank but he left the house falling down and it was the old, the ill and the most in need who suffered the most. He was a lying toady that thought he could buy the election with the most obscene pork barrelling ever seen in this country. Oh and he was the most prolific liar ever to stand as Prime Minister in this country. I will give him credit for one thing and one thing only, that is the gun laws of this country which currently need further tightening .
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Its great for the Opposition isn’t it? Hey something they can jump onto the breakfast shows to talk about – It doesn’t bother me at all! At least they are spending
money doing something to make a change! The Libs had a strong surplus in the Howard years but the basics that I think are important – health, education, future projects were at a stand-still…not much injection into those areas at all!
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After so much time of no spending in the areas you mention, Labor had to. Totally agree.
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Nope, and nope. But I do care about the reduction of aid. That’s extremely poor form.
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Like others, I don’t care about the surplus – but I do care about the incredible wastage that seems to have gone on and the fact that we’re slashing funding where it matters.
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…and most of the slashing is done by the Libs at state level!!!
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Absolutely correct! And Queenslanders are bearing the brunt of it.
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First, Santa doesn’t bring a surplus. Good economic management over a long period brings about surplus. Second, I care less about the fact that we are in defecit than I do about the government recklessly spending billions of dollars on failed and flawed policy, corrupt mps wasting taxpayer money, socialist economic policy, and the fact that Wayne swan has particularly poor budgeting skills to be unable to for see the slowing down of the world economy and it’s subsequent affect on our own economy. The labor government are constantly blaming their failures on anything but their own incompetence. He shouldn’t have overspent, and he should have better forecasting skills to be Australian treasurer.
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I laugh at this because this government has one of the lowest debt levels in Australian political history and the economy is strong despite the protestations of mainstream media.
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How did you come up with this fact? The debt has never been higher. Currently stands at $261 billion. The highest it has ever been prior to this government is $111 billion in 1997. You can always compare us to the worst performing counrties but how about we compare ourselves to the best, Singapore, Denmark and other strong economies that are in better shape than us.
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Fortunately, Swan takes advice from experts in Treasury and between Treasurers and Treasury I think we have had good economic management over a long period of time. “IMF figures show that of the 34 advanced economies, Australia has the third smallest ratio of gross debt to GDP: including state and municipal debt, it’s just 24 per cent of GDP. By comparison, Germany has a debt-to-GDP ratio of 79 per cent, the United States 110 per cent, and Japan 241 per cent.”
Read more: http://www.smh.com.au/opinion/politics/coalition-needs-to-yield-on-its-brokenrecord-debt-warnings-20120528-1zf70.html#ixzz2FecaMmpL
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You say that a surplus results from good economic management … All the good management in the world won’t fill the gap left by dramatic falls in tax revenue, which is what we are seeing now. I’m not sure what specific policies you take umbrage with, but new policies won’t have been paid for yet, so they haven’t yet affected the possibility of a surplus.
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Economic forecasting is part of his job- he should have been able to forecast a tax revenue drop with far better accuracy. As for their the policies I take umbrage with? Like most of australia, I really don’t know where to start!
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Exactly what I think, mum of cheeky monkeys.
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Doesn’t matter at all. I’d rather keep the economy stable and people employed, rather than slashing funding to health or education etc, like the Liberals would if in the same situation. Wayne Swan explained it perfectly why getting a surplus at all costs, isn’t in the best interests of Australia. I applauded them.
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You keep an economy stable and people employed through strong and accountable fiscal management, not paying bonuses and giving the surplus away to “stimulate” the economy. This government has been immature and reckless in its spending, makes populist decisions and then back peddles when their is backlash. Happy to provide specific examples if you want to get into it…
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If Labor hadn’t stimulated the economy, Australia would be struggling to this day, like America and many other countries are. They took action when it was needed. That’s what a competent Government does.
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This is the best stretch of the truth the ALP have perpetuated. Although the second stimulus had some impact, it was poorly targeted for long term economic growth, and could have been put towards employing people to build new infrastructure rather than simply a cash handout. The first stimulus package was an absolute bust.
The reason we avoided recession is 1) because our banking sector is structured differently to the USA and Europe, and we had no sub prime mortgage lending, 2) because our economy follows china far more closely than the USA due to our import/export relationships, and china never went into recession, (although many experts think that may have been bravado on behalf of the Chinese government, the expectation that drove market prices was still that china was not in recession), and 3) because the Howard government left the economy in absolutely stirling form. Economic impacts are not felt overnight, so in reality, there’d isn’t much swan or rudd could have done if they hadn’t inherited a strong and thriving economy.
The accretion of wasted spending aside, the labor government did little to impact the macroeconomic outcome of the gfc to Australia.
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I know you hate Labor with a passion, but saying “the Labor Government did little to impact the macroeconomic outcome of the GFC to Australia “, is just absurd. Seriously, come on now.
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A quick glance at commentary from economists will give you the facts on wasted spending over the past few years. And poor budgeting – the spending has blown out in almost all areas compared to what was forecast. That is just poor economic management.
I don’t hate labor. I have a great deal of respect for many labor mps of past administrations. This one, though, has me gobsmacked. My vote, as always, is not based on loyalty, but leadership, (which both parties lack), social policy, (which again both parties have failed at), and ability to run the economy. My background in economics as well as the opinion of many economists tells me that liberal has far better skills in this area. Recent history tells me the same.
If I hated labor, I would call myself vote liberal, not mum of two cheeky monkeys.
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At a state level, the ALP in Qld spent big on infrastructure at the time of the GFC in order to help with employment etc. That is now forgotten (or we have been told how wasteful they were) as the LNP slash budgets to the bone in order to get us back to a budget surplus.
Was there waste? I’m sure there was, every government is guilty of it, but sometimes you need to spend money to make money.
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No surplus, so what? It doesn’t mean Labor is useless at managing finances but I am sure the Liberals will get as much mileage as possible out of it. Another broken promise, lying to the Australian people …. blah blah blah
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It matters that the government can’t keep its central commitments. it matters that at a time when revenue is still basically at record high levels, they are spending more than we have- abc news last night had a great chart showing this . it matters that at some point we will have to pay it back through higher taxes or reduced services. I would hate to see their spending spree if we actually had a recession.
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Revenue at all time highs? Read the article; it’s actually not! Mining activity is slowing down and tax revenue, especially company tax, has bottomed out.
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I think it is important to be adaptable. If a surplus was possible when the government promised it, then fine, but circumstances change. I wanted to buy a new fridge this year but all other costs rose so it was not doable. Same problem, just on a larger scale.
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Yes but most economists predicted he would fail at delivering a surplus. Under your analogy, he promised a fridge everyone knew we couldn’t afford.
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Or if you prefer….in every pot he said, a chicken. But Mr Swan you seem to have forgot. Not only don’t we have the chicken, we ain’t got the pot !
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Knew that it would never happen….definitely not disappointed !
But as Bing Crosby once sang, “You’ve got ack-cen-tu-ate the positive”. Or as Helen Reddy once sang, “Keep on spinning, don’t stop spinning, you’re gonna be a star some day”.
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Bit like the way you keep spinning the same old record, isn’t it, Bradley ?
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Much in the same way as some spin the other side of the record daily, eh ??????
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….and I use the same name every time I comment !
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I don’t care about not achieving surplus, what I care about is the government’s stupid decision to divert millions of dollars in foreign aid that should be helping to save lives, send kids to school and improve maternal and child health, and instead use it to prop up their inhumane system of processing asylum seekers. It’s not enough that they already delayed their commitment to reach 0.5% of GNI in foreign aid by 2015, they see the need to continue breaking their promises to the world’s poor. Congratulations to the government for becoming the third largest recipient of it’s own foreign aid, dirtbags.
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Laura,
The biggest mis understanding that ever existed is that foreign aid amounts to sending cash overseas. IT simply isn’t true. Foreign aid money is spent in Australia and the products are sent overseas. The money is directly fed into the Australian economy, obviously helping Australian producers.
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Foreign aid also funds professionals to work overseas through Australian Volunteers or AVID.
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I’m not sure how that changes the fact that what the government is doing is wrong? So foreign aid may perhaps invest in producing birthing kits within Australia, which are then sent to support medical clinics in somewhere like Timor. If the funding is cut and no medical kits purchased, more women in that country die because of a lack of basic tools to make their delivery easier.
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Whatever you think of the current system of dealing with asylum seekers, it still costs billions of OUR dollars to do it. I have no problem with the Govt diverting some of its aid money to carry out the processing and resettling of these people into our community. It’s still aid to people in dire circumstances.
You can be pretty certain the Libs would probably do much the same. Their attitude to asylum seekers is even worse.
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The problem is, it shouldn’t be an either or situation. If this is the policy they have chosen to deal with asylum seekers they need to be prepared to pay for it, and it shouldn’t come at the expense of the poor and needy overseas. Not to mention the fact that if we spent a little more on foreign aid, we’d probably have fewer people fleeing their homes to come here.
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I think the decision not to have a budget surplus is sensible given the current economic climate. With the world still in recovery from the global financial crisis, now is not the time to restrict government spending and raise taxes. Instead the government needs to be stimulating the economy to avoid another recession (or to avoid the recession from becoming worse).
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Yeah, I agree, but blind freddy could see that the surplus was never going to happen. It was obvious 4 years ago when the mining tax was first mentioned, and mining exploration pretty much stopped overnight. Add the GFC and a surplus was always a pipedream.
What I don’t get is why this Government continued to peddle something that was never going to happen. How could they not know? Are they that stupid that they don’t understand that their own policies would lead to a reduction in government income? Seems they have done the typical Labor thing and not been able to manage their income properly.
The last time the ALP delivered a surplus was 1989, and it was the only time that the ALP have done it since the Libs were elected in 1949. That should say something to anyone with any brains about their ability to run the country.
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Anon, couldn’t have it it better myself! Amen
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Well. Said.
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What a load of rubbish
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Mining exploration pretty much stopped overnight? Which shock-jock or Murdoch commentator did you get this little ‘factoid’ from?
Actually what happened was that the mining stream continued but the GFC caused a slump in demand from the OECD economies impacting global demand for manufactures resulting in a significant price drop for Australian commodities in a number of sectors. Go and compare the price of Iron ore prior to the worst of the GFC (2009) – and what it was for 2010-2011.
As for Howard’s economic management, it has been widely condemned by serious commentators across the world, in an environment where the terms of trade were so seriously favourable, plus the sale of assets, he and Costello are considered to have spent like drunken sailors in the form of massive tax welfare to ensure re-election, while letting infrastructure go down the gurgler.
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