Generations of Australians face decades of budget deficits, government spending cuts, high taxes and an era of social austerity thanks to the reckless waste by Labor nationally and across Labor’s badly run states.
Structural budget deficits are set to continue “as far as the eye can see”, according to new economic modelling that will reinforce calls for a systemic review of government spending.
Gillardism is extreme socialism driving extreme spending – open door to 17,000 illegals on CentreLink welfare, inviting another 200,000 foreigners annually to congest our cities, hairbrain handouts – baby bonuses, school kids bonus; climate change evangelism, extravagant disability insurance scheme, unrealistic Gonski socialist education, billions donated overseas, wasted incentives, billions wasted with nothing to show for it.
In December, Labor Treasurer Wayne Swan conceded that Labor was unlikely to achieve its promised budget surplus in 2012-13. And new estimates by the economic consultancy firm Macroeconomics, included in a pre-budget submission by the Minerals Council of Australia, predict a headline deficit of $8.3 billion this year, rising to $9.9bn in 2013-14.
Macroeconomics modelling shows the 2011-12 budget, which had a headline deficit of $43.7bn, had a structural deficit of $65.6bn when the impact of high commodity prices and the economic cycle was removed.
The MCA used the figures to back its calls for the government to focus on reducing poor-quality spending. “It is almost 17 years since the last comprehensive review of commonwealth expenditure,” it says. “In that time, the commonwealth budget has grown from roughly $135 billion to around $400 billion in nominal terms.”
It argues that independent analysis points to net discretionary policy spending over the past five budgets and up to the latest mid-year economic outlook of about $120bn.
“With temporary GFC stimulus spending of around $70bn, this suggests a net increase in policy spending of around $50bn,” it says. “The locking-in of a permanently higher spending base presents acute fiscal challenges for Australia in coming years. The medium-term fiscal outlook is clouded further by the government’s aspirational spending ambitions, including the NDIS and the Gonski education reforms.”
So Australia now faces a decade of budget deficits, with the annual total set to pass $60 billion in 2023 unless governments take tough action to “share the pain”, according to The Grattan Institute.
The Grattan Institute says that while notionally on track to surplus at the moment, the combined total of state and Commonwealth budget deficits could reach 4 per cent of gross domestic product by 2023, which is about $60 billion in today’s dollars and would be about $100 billion in 10 years’ time.
“Initiatives such as the national disability insurance scheme, the education reforms, direct action on climate change and parental leave are only a small part of it,” Grattan Institute chief executive John Daley said.
“The big driver, costing $30 billion, is extra spending on health. Contrary to popular belief, the extra spending isn’t being driven by ageing. It’s that compared to 10 years ago today’s 60-year-olds see the doctor more often, have more tests, face more operations and take more drugs. We are getting something out of the extra spending: more people are staying alive.
But the question is – who is going to pay for it?”
The Fritter and Waste of Gillardism