The Australian people are wise to Treasurer Josh Frydenberg’s fraudulent argument that all new spending and tax cuts are funded because the “economy is growing”.
Australians know you can’t simply flick a switch and move from ‘debt and deficit disaster’ to rivers of gold and unfunded tax cuts and spending.
Whenever you hear Scott Morrison or Josh Frydenberg say in response to questions on how new spending or tax cuts will be funded that the ‘economy’ or ‘growth’ will pay for it, or ‘it’s in the Budget’, it’s code for “we’ve given up” and NO offsets have been made.
Either that or there are other new spending cuts or hidden tax increases in the Budget that they don’t want you to know about.
It must be embarrassing for many in the Liberal Party seeing the new economic team trash one of their traditional core values, spending up big with and abandoning sound Budget management.
It’s clear the Treasurer hasn’t even read his government’s own Budget papers. If he did, he would see that the Abbott-Turnbull-Morrison Government’s latest Budget repair strategy includes that:
- new spending measures will be more than offset by reductions in spending elsewhere within the budget
- the overall impact of shifts in receipts and payments due to changes in the economy will be banked as an improvement to the budget bottom line, if this impact is positive
Simply saying the ‘economy’ or ‘growth’ will pay for new spending or tax cut plans is NO plan for a sustainable Budget repair strategy.
Last year we were told there was a need for a $40bn income tax hike to pay for the NDIS, but by this year that was dropped in favour of $140 billion in income tax cuts, mainly spent by running down the revenue uptick from improvements in the global economy.
Failing to offset new expenditure or tax cuts means higher government debt. While Australia’s public debt is manageable by OECD standards, at over a half a trillion under the Liberal’s watch, it is high by Australian standards, and it needs structural reform to start to make inroads into it.
There’s a reason you don’t hear the Liberal Party talk about ‘debt and deficit disaster’ anymore, because gross debt has blown to over half a trillion dollars and the Liberal Party has no viable Budget repair strategy.
The Liberal Party has got major new hits to the Budget that occur outside the forward estimates, in 2022 and 2024 in particular, and does anyone know how the global economy, or China, or the Australian economy will be running in four or six years?
Australia has very high household debt by international standards and we need more fiscal buffers in case of an international downturn.
The Budget is benefiting from the strongest global economic upswing in a decade which is why Labor has committed to delivering bigger budget surpluses over the forward estimates and substantially bigger surpluses over the medium term.
Federal Labor is being honest and upfront with the Australian people about the need for structural Budget repair and we’ve outlined measures that ensure new commitments are paid for and that government debt is paid down.