Hey, big spender: Howard the king of the loose purse strings.
Date
January 11, 2013
AUSTRALIA'S most needlessly wasteful spending took place under the John Howard-led Coalition government rather than under the Whitlam, Rudd or Gillard Labor governments, an international study has found.
The International Monetary Fund examined 200 years of government financial records across 55 leading economies.
It identifies only two periods of Australian "fiscal profligacy" in recent years, both during John Howard's term in office - in 2003 at the start of the mining boom and during his final years in office between 2005 and 2007.
Australian Prime Minister John Howard
The Rudd government's stimulus spending during the financial crisis doesn't rate as profligate because the measure makes allowance for spending needed to stabilise the economy.
The Whitlam Labor government of 1972 to 1975 also escapes censure.
Responding to the IMF report, shadow treasurer Joe Hockey, who was a minister for financial services in the Howard government, said the Coalition left Labor with a $20 billion surplus and no net debt.
"It was not John Howard and Peter Costello who wasted billions of taxpayer dollars on dangerous pink batts and overpriced school halls, it was this Labor government," he said.
The economists from the IMF's fiscal affairs department found the only other year of profligate spending during the past six decades took place during the conservative government of Robert Menzies, in 1960. It says the Menzies government was notably prudent in 1950.
In the postwar years of 1947 to 1949, the Chifley Labor government was deemed prudent as were the Scullin and Lyons Labor and Coalition governments between 1931 and 1935.
John Curtin's Labor government was profligate in 1942.
The study found that in broad terms Australia's government debt has been falling since 1932, when it peaked at 98 per cent of gross domestic product. Across all levels of government it is currently just above 20 per cent after climbing since the global financial crisis.
The budget balance has been broadly stable for half a century.
The key finding is that Australia has few examples of economic recklessness compared with other developed nations. Canada's government debt peaked at 143 per cent of GDP in 1946, Japan's reached 233 per cent in 2011, Israel's hit 284 per cent in 1984.
New Zealand recorded government debt of 226 per cent in 1933 and a budget deficit of 7.5 per cent of GDP in 1995.
Developed nations were generally at their most prudent before World War I and during the 1990s, the study finds.
They were generally their least prudent during the mid-1970s and in some cases after the global financial crisis.
The IMF study mirrors findings of a 2008 Australian Treasury study that found real government spending grew faster in the final four years of the Howard government than in any four-year period since the 1990s recession.
The number of spending decisions worth more than $1 billion climbed from one in the first Howard budget to nine in the last. The proportion of savings measures fell from one-third of budget measures at the start of the Howard era to 1.5 per cent at the end.
In its final year in office, the Coalition boosted the AusLink national roads program by $2.3 billion and announced grants for water conservation and water buybacks worth $10 billion over 10 years.
Read more: http://www.theage.com.au/opinion/political-news/hey-big-spender-howard-the-king-of-the-loose-purse-strings-20130110-2cj32.html#ixzz2HbQlPZaF
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