Labor’s Budget doesn’t add up

Goldstein News
June 2010

Labor’s Budget doesn’t add up

The Rudd Labor Government’s third Budget is based on a number of false premises.

Firstly, Kevin Rudd and Wayne Swan want the Australian people to believe that they steered Australia through the global financial crisis. Secondly, they want Australians to believe that they are imposing fiscal discipline and thirdly, they want Australians to believe that they are tracking the Budget back to surplus.

This is wrong on all counts.

First the global financial crisis. Julia Gillard memorial school halls and pink batts did not save Australia from recession. The reason we avoided a recession and rode the global financial crisis better than most was because we entered it with a $20 billion surplus, no debt, a prudent regulatory system and a strong resource sector.

The Coalition never argued against some form of stimulus at the height of the global financial crisis. But what we wanted to see was a smaller and more targeted stimulus that would have supported jobs but avoided the colossal waste of taxpayer’s money and subsequent record levels of debt we now find ourselves in.

The second proposition being rolled out is that Mr Rudd and Mr Swan are exercising strong fiscal discipline. This couldn’t be further from the truth. The government has not taken a single tough decision to rein in its reckless and wasteful spending.

In fact, spending will increase by $26 billion over the next three years, relative to last year’s record spending forecast.

Labor claims to be saving $30 billion over four years. However, this government has included new revenue measures as savings. Of this $30 billion, half is from new revenue; mostly through the increase in the tobacco excise and the new tax on mining companies.

A fiscally disciplined government would not have delivered a record $57 billion deficit in 2009-10. Furthermore, a fiscally disciplined government would not have to borrow $700 million every week for the next three years.

With government debt at $94 billion and an interest bill totaling $6.5 billion, there is nothing fiscally responsible about this government.
The third proposition is that Mr Rudd and Mr Swan have paved a way back to Budget surplus.

Labor can claim that they will return the Budget to surplus in three years time, but we cannot trust their economic forecasts. They have consistently misjudged economic predictions in every Budget outlook and there is every chance they have misjudged this one too.

The fact is Labor’s plan to return the Budget to surplus relies upon a great big new tax on Australia’s resources sector and the most favorable terms of trade in 60 years. Furthermore, it relies upon a significant increase in investment in resources and assumes no new additional government expenditure between now and 2014.

Relying on lofty economic assumptions and a great big new tax is not a plan to return the Budget to surplus.

The Coalition has a plan and has a proven record on delivering Budget surpluses.

The Coalition will end Mr Rudd’s reckless spending. We will take the hard, but necessary decisions that Mr Rudd has shirked. We have already outlined tough savings measure totalling $46.7 billion.

The Coalition stands for lower taxes, smaller government, greater freedom, and a fair go for families.

The Budget confirmed that Mr Rudd no longer stands for anything.