‘Utterly desperate’: Why Scott Morrison wants you to ignore government debt

Thu, 07 Nov 2019  |  

This article was written on 14 October 2019: It was on the Yahoo Finance website at this link: https://au.finance.yahoo.com/news/ignore-government-debt-225040404.html 

--------------------------------------------------------

‘Utterly desperate’: Why Scott Morrison wants you to ignore government debt

When it comes to government debt, the Morrison government is desperate for you to keep your eyes and ears closes and ignore the facts.

Utterly desperate.

These facts are likely to be defined by Prime Minister Morrison as being ‘in the Canberra bubble’ and therefore not worth talking about.

So what is happening with government debt? You know, the government debt that when the Liberal Party was in opposition and Labor were in power was “a disaster”, that was “undermining our kid’s future” and threatened to “ruin the economy”.

When in Opposition, the Liberal Party promised to return to the budget to surplus and to “pay off Labor’s debt”. It was a promise that created and then reinforced a perception, at least in the mind of some voters, that the Liberal Party is a better economic manager than Labor. This perception has been a critical factor in the Coalition winning the last three elections in 2013, 2016 and most recently in 2019.

Last week, updated data on government debt were released which allowed for an up to the minute assessment of how those promises on debt reduction are going.

In terms of gross government debt, data from the Australian Office of Financial Management shows it reached a record $565 billion as at 11 October 2019. At the time of the September 2013 election, gross government debt was just $273 billion.

This means that in a little over six years, with six budgets and countless policy changes and reforms from the Coalition, gross debt has increased by $292 billion or 107 per cent.

When Mr Morrison is talking about “strong growth” I assumed he wasn’t referring to government debt!

According to Department of Finance data, net government debt reached a record $399 billion at the end of August 2019. At the time of the September 2013 election, when the Coalition was swept to power, net government debt was a paltry $161 billion.

Net government debt has increased by a massive $238 billion or 148 per cent in the six years the Coalition has been in control of spending and taxing policies.

This $238 billion addition to net debt in the six years under the Coalition government compares to the $215 billion rise in net debt under the Labor Party in the six year period from 2007 to 2013 when it was last in office.

Labor’s addition to debt occurred when the world economy was floundering in the deepest recession since the 1930s Great Depression and was driven by both fiscal policy stimulus and a loss of revenue as economic growth slowed.

How has the debt been mounting?
The extraordinary thing about the debt blow out in the last six years under the current Coalition government has been that is has occurred when the global economy has been growing strong and commodity prices have been booming. The Coalition government is banking on getting the budget to surplus this financial year and in the process, it is hoping to stem the rise in debt.

At the time of the last budget, delivered in April, the 2019-20 budget was forecast to register a surplus of $7 billion. It is too early to be absolutely sure whether a $7 billion surplus is still on track. Providing a massive windfall in revenue to the government is the still robust level of commodity prices, particularly iron ore, but this is being offset by the chronic slump in private sector demand which is lowering wages growth and consumer spending.

Data last week from the Department of Finance shows that for the first two months of the financial year (July and August) the underlying budget balance is running $664 million below the assumed run-rate from the budget figuring.

The monthly budget numbers are hugely volatile (for example company tax being paid on the 1st of the month rather than the 31st of the prior month) but if this trend continues, the $7 billion surplus will be under threat and that will spill over to the level of government debt.

Either way, the Coalition has failed in its promise to reduce government debt and this may yet be an issue when the 2022 election rolls around.

comments powered by Disqus

THE LATEST FROM THE KOUK

How Labor lost the federal election SO badly

Thu, 07 Nov 2019

This article first appeared on the Yahoo Finance website on 20 May 2019 at this link:  https://au.finance.yahoo.com/news/why-labor-lost-the-election-so-badly-211049089.html 

----------------------------
How Labor lost the federal election SO badly

The Coalition did not win the election, Labor lost it.

The tally since 1993 for Labor is a devastating seven losses out of nine Federal elections. By the time of the next election in 2022, Labor will have been in Opposition for 23 of the last 29 years. Miserable.

The reasons for Labor’s 2019 election loss are much more than the common analysis that Labor’s policy agenda on tax reform was a big target that voters were not willing to embrace.

Where the Labor Party also capitulated and have for some time was in a broader discussion of the economy where it failed dismally to counter the Coalition’s claims about “a strong economy”.

In what should have been political manna from heaven for Labor, the latest economic data confirmed Australia to be in a per capita recession. This devastating economic scorecard for the Coalition government was rarely if ever mentioned by Labor leader Bill Shorten and his team during the election campaign.

This was an error.

If Labor spoke of the “per capita recession” as much as the Coalition mentioned a “strong economy”, voters would have had their economic and financial uncertainties and concerns confirmed by an elevated debate on the economy based on facts.

This parlous economic position could have been cited by Labor for its reform agenda.

Why animals are a crucial part of the Australian economy

Thu, 07 Nov 2019

This article was written on 31 October 2019: It was on the Yahoo Finance website at this link: https://au.finance.yahoo.com/news/animals-crucial-australian-economy-192927904.html 

------------------------------------------------------

Why animals are a crucial part of the Australian economy

Animals are a critical part of the Australian economy, either for food, companionship or entertainment.

But every month, millions of sheep, cattle, pigs, chickens, fish and other animals are bred and then killed. Most of them are killed in what we define as ‘humane’, but no doubt tens of thousands are horribly mistreated, as are a proportion of the animals we keep as pets.

Animals are slaughtered to provide food for human food consumption, to feed other animals (your cats and dogs are carnivorous) and for fertiliser.

The Australian Bureau of Statistics collects a range of data on animal slaughterings and the most recent release of the Livestock and Meat data release included the following facts.