Tag: Budget
Every year, the Government hands out around $6 billion dollars in fuel tax subsidies – and the coal mining industry is one of the largest recipients. It’s all in a report released this week by the Australian Conservation Foundation, which would make for some handy reading for our Treasurer who’s weighing up different options to save the Government money.
Think Mr Hockey should raise revenue by stopping handouts to billion-dollar mining corporations instead of creating $100k university degrees?
Join the Brighter Budget campaign to fight for fairer budget. www.getup.org.au/brighter-budget
The takeaway from six years of economic troubles? Keynes was right.
In more extreme cases, such as Italy and Spain, fiscal tightening has plunged them back into deep recession and aggravated financial crises. Meanwhile countries that ignored their deficit problems, as in the United States for most of the post-crisis period, or where governments decided to downplay their fiscal tightening plans, as in Britain this year or Japan in 2013, have generally done better, both in terms of economics and finance. The one major exception has been Germany, where budgetary consolidation has managed to coexist with decent growth, largely because of a boom in machinery exports to Russia and China that is now over, pushing Germany back into the recession its stringent fiscal policy suggested all along.
Recessions generally occur when private business and households decide to spend less than their incomes in order to reduce their debts or increase their savings. If this process of “deleveraging” is happening in the private sector, which it clearly has been, then simple arithmetic shows that economic balance can only be restored if some other sector of the economy spends more than its income – and such excess spending is only possible if that “other sector” is willing to increase its debts. Disregarding the role of exports and imports, which must sum to zero for the world as a whole, the government is the only possible candidate to play the crucial balancing role as the “other sector.” It is therefore a mathematical certainty that governments must increase their borrowing whenever businesses and households decide to boost their savings by spending less than they earn.
- October 30, 2014
- Written by: John Kelly
- They’re spending like drunken sailors.
When you voted in the federal election last year, were you concerned about Labor’s debt and deficits, and did they effect how you voted? Did you think that Labor’s spending was unsustainable and had to be stopped?
Because if the answer is yes, the news is not good. The Coalition, right now, is on track to double Labor’s debt by December next year.
In the first three months of this financial year (2014-15) net debt increased from $202.46 billion to $221.33, a jump of 10 per cent. But that’s only part of the story. All the economic forecasts were projecting a net debt at the end of 2013/14 to be $178.10 billion.
So the actual figure of $202.46, realistically, is the true figure for which Labor must accept responsibility. If we accept that the $202.46 billion belongs to Labor, that still means that the Coalition have been spending like drunken sailors since June 30th 2014.
If we want to be relentlessly selfish and insist that the original Treasury projection of $178.10 is Labor’s to wear then the Coalition have thus exceeded Labor’s spending this financial year by $43.2 billion (up 24.3%).
Either way they are no better in managing the economy and based on future projections, they are on track to be a lot worse.Since June this year the Coalition has borrowed $19 billion which, if maintained each quarter from now until December 2015 will double the debt they inherited in 2013.
Remember, this is net debt, not gross. The gross debt on which we pay interest is now $339.4 billion. When Labor lost office it was $284 billion. It seems extraordinary that Tony Abbott still happily refers to the need to fix the budget and to curtail Labor’s debt and deficit disaster when his own government is not only heading in the same direction, but is doing so at a faster rate than Labor.
It is worth noting that the repeal of the Carbon Tax left a gaping $2.8 billion hole and is further compounded by the repeal of the Mining Tax, the projected Paid Parental Leave Scheme and the Direct Action Plan. Yet, they are determined to push ahead on both.
Much of the Coalition’s projections in the 2013 Mid Year Economic and Fiscal Outlook (MYEFO) were independent of Treasury advice and we know they took some liberties with those figures to make Labor look bad. But, if they thought that was clever then they are in for an unholy awakening in the coming 12 months as revenues continue to decline and their spending continues to blow out.So one has to wonder how it will be possible to avoid a looming debt and deficit disaster greater than the kind they accused Labor of, without some savage adjustments to revenues and expenditures. With the current budget impasse in the senate, the Coalition is going to have a lot of explaining to do as the months roll on and ever more embarrassing information is released.
One wonders how long the MSM can hold off reporting on the state of the economy and comparing it to Labor’s. We all remember how diligent they were during the Rudd/Gillard years. The October and November updates will be interesting reading as will the December quarter. As the position continues to worsen surely someone in the MSM will say something….won’t they?
In reality, if all the rhetoric about debt and deficit were true we should have gone bankrupt in the 1980’s when all the indices were far worse than they are now. The Howard government inherited a paltry $96 billion back in 1996. Hardly worth getting upset about today.It might be worth taking a look at the Liberal Party website where they detailed their plan prior to the last election. It will be the standard by which we can measure their success. As things get progressively worse, it might suddenly disappear before too long.
Hockey in his eagerness to do something right for a change tripped and found himself licking Palmer arse. He’s delayed the increase in compulsory super from 9.5% to 12% for another 7 years. Of course Joe magnanimously said the workers will see that extra money in their pay packets. A straight out lie because employers are not obligated to pass it on.
Tell me an employer that will pass on a 2.5% wage increase when they are not obliged to. His man will go down in history as little more than a waste of space. Please explain Mr Treasurer
‘If it stays with employers the best way to grow superannuation in Australia is to have a stronger economy because ultimately because superannuation is invested back into the economy’
If the employer keeps the money Joe it’s not my super Joe it’s his new Merc or his overseas trip. It’s the Christmas present my wife or kid just might miss out on. Maybe the school excursion. What utter horse shit is the man saying the improvement in my employer’s life style is good for the economy. That’s as Liberal as you can get and Abbott is running the same line on this.
In 1967, Prime Minister Harold Holt said that he knew of no other free country where “what is produced by the community is more fairly and evenly distributed among the community” than it was in Australia.
The pillars of egalitarianism in Australia were high wages, high home ownership and low unemployment.
The figures tell a different story. While big business continues to rake in record profits, wage rises have been so low over the past year that most workers have gone backwards.this at a time when productivity is at an all time high.
Not only is the minimum wage under attack, penalty rates are also in the firing line.On Tuesday, Assistant Infrastructure Minister Jamie Briggs said it was unfair that small businesses had to pay double on Sundays and triple on New Year’s Eve, and it was on the government’s radar.
ACTU boss Ged Kearney said dropping penalty rates will not increase jobs or help small business but damage the economy by lowering the amount of money people spend in stores and restaurants.
“You cut $200 a week out of someone’s pay . . . and small business will be the first to suffer,” she said.
Despite rising unemployment, the Coalition plans to expand the 457 visa program, remove existing controls on employers, abolish any training obligations and open the program up to more semi-skilled workers.
So with an active push to reduce wages, no plan to create jobs amidst rising unemployment, movement away from federal action on affordable housing while encouraging investors to drive up housing prices, one wonders what Mr Holt would have to say about Abbott’s Australia.
olddogthoughts 
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