There Will Be No Surplus Under A Government Rudd Leads

Posted on Sat 08/03/2013 by

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(Australian Prime Minister Kevin Rudd is Taking Oz ‘Down The Tubes’ —ed)

Bolt New 01By Andrew Bolt ~

The Budget delivered just 11 weeks ago has already blown out to a $30 billion deficit this year alone.  The surplus Labor claimed it would finally deliver in 2015 is now tipped to be a $4.7 billion deficit. The $4 billion surplus it now promises in 2016 is based on ludicrous assumption of a sudden recovery.

Yet still Labor can’t stop spending.

Judith Sloan:

Expenditure will increase by nearly 6 per cent this year. Who said this was not an election budget?

The return to budget balance has effectively been put off for a year. Mind you, no one will be betting the house that there will actually be a budget surplus in 2016-17. After all, we were guaranteed one last financial year.

Let’s face it: neither the government nor Treasury has a clue…

This economic statement continues to make ridiculously optimistic assumptions about future receipts. We are expected to believe that total receipts as a percentage of GDP will be 24.8 per cent in 2016-17. (They were only 23.2 per cent last financial year, when the economy was growing around trend.)

Receipts are expected to grow by 8.5 per cent in 2015-16 and by another 6.5 per cent in 2016-17. Pull the other one, I say.

UPDATE

David Uren doesn’t believe Labor’s claim that it will give us a surplus in three years. It’s based on a fantasy:

THE absurdity of the government’s claim to be returning the budget to surplus leaps out from the first page of its economic statement, in the table that shows the jobless rate suddenly dropping from 6.25 per cent next year to 5 per cent in each of the following two years.

The same table shows a similarly inexplicable leap in the measure of nominal GDP (from 4.5 per cent to 5.25 per cent) which governs how much taxable income the economy generates.

These numbers do not show Treasury taking leave of its senses. It is just that Treasury compiles detailed economic forecasts for this year and next but no further. The fog of uncertainty is too thick to foretell what the economy will be doing beyond that.

Instead, Treasury simply makes a technical assumption that economic growth will resume its long-term trend rate and that the labour market will return to full employment.

However, these flaky assumptions are then used to calculate how much tax revenue the government will raise and provide the base for its confident assertions that it is returning the budget to surplus. They are also justifying its claims that we can afford new multi-billion-dollar spending on disability insurance and school funding.

There will be no surplus under a government Rudd leads:

The head of consultancy Macroeconomics, Stephen Anthony, rejects Labor’s new $4bn return-to-surplus forecast in 2016-17, saying his modelling points to an estimated $19bn deficit that year.

Andrew Bolt is a journalist and columnist writing for The Herald Sun in Melbourne Victoria Australia.

Andrew Bolt’s columns appear in Melbourne’s Herald Sun, Sydney’s Daily Telegraph and Adelaide’s Advertiser. He runs the most-read political blog in Australia and hosts Channel 10’s The Bolt Report each Sunday at 10am. He is also heard from Monday to Friday at 8am on the breakfast show of radio station MTR 1377, and his book  Still Not Sorry remains very widely read.

Read more excellent articles from Andrew Bolt’s Blog . http://blogs.news.com.au/heraldsun/andrewbolt/

Andrew Bolt is a journalist and columnist writing for The Herald Sun in Melbourne Victoria Australia.

Andrew Bolt’s columns appear in Melbourne’s Herald Sun, Sydney’s Daily Telegraph and Adelaide’s Advertiser. He runs the most-read political blog in Australia and hosts Channel 10’s The Bolt Report each Sunday at 10am. He is also heard from Monday to Friday at 8am on the breakfast show of radio station MTR 1377, and his book  Still Not Sorry remains very widely read.

Read more excellent articles from Andrew Bolt’s Blog . http://blogs.news.com.au/heraldsun/andrewbolt/