Goldstein News – May 2009
A Very Labor Budget
Treasurer Wayne Swan, promised that this would be a very Labor budget. He was right. He was good to his word. This budget is indeed built on two great and enduring Labor principles-debt and lies. I recall the great indignation which was provoked before the last election whenever the coalition suggested that there was a continuity between Rudd Labor and old Labor. We were told in television advertisements that Mr Rudd had often been accused of being an economic conservative:
“A number of people have described me as an economic conservative.”
But Mr Rudd was very careful. He was very specific. He wanted to narrow down and be very precise about what that definition of being an economic conservative actually meant. What he went on to say in that ad was:
“When it comes to public finance, it’s a badge I wear with pride.”
He specifically defined economic conservatism in terms of public finance.
The coalition were ridiculed at the last election for suggesting that Mr Rudd and Mr Swan were not what they seemed. We were accused of running a scare campaign. The big-spending, debt bingeing Labor Party was supposedly a mythical beast, for this was Rudd Labor, almost indistinguishable from Howard-Costello Liberals.
In 1996 Labor bequeathed to the Australian people a $96 billion debt. That situation in 1996, of course, was not of our making, but we took responsibility to fix it. Over the next 10 years we paid that debt down with no help from the Labor Party, who opposed each and every measure we put forward to bring the budget back into balance. In 2007 we held the very unfashionable view at that time that Labor would revert to form. We still held this view when the 2008 budget was delivered, a budget which forecast a surplus. In last year’s budget speech, Mr Swan said:
“We are budgeting for a surplus of $21.7 billion in 2008 09, 1.8 per cent of GDP, the largest budget surplus as a share of GDP in nearly a decade. This honours and exceeds the 1.5 per cent target we set in January…”
We did not believe Labor then. We did not believe them, because we know them all too well. We know that Labor have only ever viewed balanced budgets and budget surpluses as a political strategy at best-a political virtue but never a policy virtue. Labor always have and always will see the true sign of economic virtue as debt. The greater the debt, the greater the virtue. Does anyone who thinks to themselves, ‘Look, I am really committed to economic responsibility; I am committed to balanced budgets,’ also think, ‘I should go and join the ALP to pursue those objectives’? I don’t think so. That just does not happen. That is why, in November 2007, we knew that Labor would never, ever deliver a surplus budget.
When the coalition clocked off, the budget was in surplus and there was no net government debt. Eighteen months later there is a $58 billion budget deficit and a debt heading towards $188 billion. Clearly, no honest observer believes that the current budgetary situation is the fault of the coalition. In fact, if not for our responsible management, it would have been far worse. The other defence Labor cite for the budget situation is that falling revenues are due to a slowing economy.
No-one would contend for a moment that a slower economy does not impact revenues. But Labor would have us believe that this is the full story of the budget situation. It is rubbish. Two-thirds of the debt owed by taxpayers in 2012-13 will be due to spending decisions taken by Labor over the last 18 months. Labor have announced measures since November 2007 totalling $124 billion. That is an average of $225 million per day. Labor pretend that the trashing of the budget is all due to the global recession and nothing to do with Mr Rudd and Mr Swan; they just stumbled across the scene. But Labor, as we know, have made a challenging situation far worse.
They have lost control of the nation’s finances; there is record spending, a record deficit and rising unemployment. Labor have made the task of recovery that much harder. Labor will, we know, inflict unnecessary pain on Australians who have to pay off that debt. It is always the Australian people who have to foot the bill.
It took the coalition the best part of a decade to repay Labor’s $96 billion debt. It will probably take 20 years for us to repay that debt again. One thing I know for sure is that Labor will never deliver a surplus budget; they will never repay this debt. I see a time after the next election when a Liberal Treasurer will again go to the dispatch box and repeat the words of Mr Costello in 1996 and say, ‘Although this problem was not of our creation, we will fix it.’