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Labor's legacy: a decade of deficits! (Read 4224 times)
Armchair_Politician
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Labor's legacy: a decade of deficits!
Mar 31st, 2014 at 9:15am
 
FEDERAL Treasurer Joe Hockey says without deep cuts to spending in the budget Australia is heading for the longest period of continuing deficits in modern history. 
 
Treasury analysis predicts the country's deficits will stretch out to at least 2024 because of continued spending increases.

The warning provides a case for drastic cuts in the May budget, as the government on Monday received the final report from its Commission of Audit.

Mr Hockey said the government had to reduce expenditure, as well as try to increase revenue at the same time.

"Without changes to government spending the budget is in deficit for at least a decade," Mr Hockey told ABC radio.

"It would be the longest period of continuing deficits in modern history."

Asked if that meant the budget cuts had to be hard and deep, Mr Hockey said: "They've got to be fair, too".

"It is about making sure that everyone, everyone in the community helps to do the heavy lifting on repairing the budget," he said.

"This is not an ideological drive. This is about whether we want to simply sustain our quality of living, not even improve our quality of living.

"We have to make sure we live within our means."

Mr Hockey complained that Labor had left the government with "massive" spending increases in foreign aid and defence, and a poorly introduced National Disability Insurance Scheme.

"If we don't get on top of the proper management of the National Disability Insurance Scheme, not only would it not be sustainable, but it could end up as big a farce as the pink batts program or the $900 cheques program," he said.

The treasurer said the ageing population was also putting pressure on the budget.

When asked if it was sustainable to give a part pension to those with assets of more than a million dollars, Mr Hockey said "that's something that obviously needs to be taken into account".

"The aged pension is growing at a massive rate," he said.

"But also it's about our ageing population, and the fact is that we're living longer.

"The question is how do we sustain these sorts of payments, and ensure that they are sustainable in 10, 20 and 30 years time."

http://www.dailytelegraph.com.au/news/breaking-news/australia-faces-decade-of-de...
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Armchair_Politician
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Re: Labor's legacy: a decade of deficits!
Reply #1 - Mar 31st, 2014 at 9:16am
 
This is what happens when you have an economic illiterate like Swan running the country's finances. Swan's attempt to spend his way out of trouble has just created more problems that Abbott/Hockey now have to try to deal with. Thanks for the massive debt, Wayne! Angry
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Re: Labor's legacy: a decade of deficits!
Reply #2 - Mar 31st, 2014 at 9:19am
 
Armchair_Politician wrote on Mar 31st, 2014 at 9:15am:
When asked if it was sustainable to give a part pension to those with assets of more than a million dollars, Mr Hockey said "that's something that obviously needs to be taken into account".


Given the prices of Australian real estate, that would probably mean at least half of the population living in capital cities....
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Re: Labor's legacy: a decade of deficits!
Reply #3 - Mar 31st, 2014 at 9:25am
 
Armchair_Politician wrote on Mar 31st, 2014 at 9:16am:
This is what happens when you have an economic illiterate like Swan running the country's finances. Swan's attempt to spend his way out of trouble has just created more problems that Abbott/Hockey now have to try to deal with. Thanks for the massive debt, Wayne! Angry


why? because Hockey says so? .... does he even know how to turn on his calculator?  Grin Grin Grin Grin
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Re: Labor's legacy: a decade of deficits!
Reply #4 - Mar 31st, 2014 at 9:43am
 
John Smith wrote on Mar 31st, 2014 at 9:25am:
Armchair_Politician wrote on Mar 31st, 2014 at 9:16am:
This is what happens when you have an economic illiterate like Swan running the country's finances. Swan's attempt to spend his way out of trouble has just created more problems that Abbott/Hockey now have to try to deal with. Thanks for the massive debt, Wayne! Angry


why? because Hockey says so? .... does he even know how to turn on his calculator?  Grin Grin Grin Grin


How many times do this clown's BS claims about Swan, Labor and the economy
have to be refuted before it sinks in that he is dead wrong?

He is not posting a fact, or even an opinion, he is posting a proven, demonstrable
and acknowledged (world-wide, by experts) lie.

And he does so on an almost daily basis.

It may not be trolling, but in my book it's definitely spamming.
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...
 
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john_g
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Re: Labor's legacy: a decade of deficits!
Reply #5 - Mar 31st, 2014 at 10:04am
 
Kat wrote on Mar 31st, 2014 at 9:43am:
John Smith wrote on Mar 31st, 2014 at 9:25am:
Armchair_Politician wrote on Mar 31st, 2014 at 9:16am:
This is what happens when you have an economic illiterate like Swan running the country's finances. Swan's attempt to spend his way out of trouble has just created more problems that Abbott/Hockey now have to try to deal with. Thanks for the massive debt, Wayne! Angry


why? because Hockey says so? .... does he even know how to turn on his calculator?  Grin Grin Grin Grin


How many times do this clown's BS claims about Swan, Labor and the economy
have to be refuted before it sinks in that he is dead wrong?

He is not posting a fact, or even an opinion, he is posting a proven, demonstrable
and acknowledged (world-wide, by experts) lie.

And he does so on an almost daily basis.

It may not be trolling, but in my book it's definitely spamming.


I agree with you Kat.

After all, we all know that Swan came good on his promise of a budget surplus.
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Armchair_Politician
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Re: Labor's legacy: a decade of deficits!
Reply #6 - Mar 31st, 2014 at 10:04am
 
Kat wrote on Mar 31st, 2014 at 9:43am:
John Smith wrote on Mar 31st, 2014 at 9:25am:
Armchair_Politician wrote on Mar 31st, 2014 at 9:16am:
This is what happens when you have an economic illiterate like Swan running the country's finances. Swan's attempt to spend his way out of trouble has just created more problems that Abbott/Hockey now have to try to deal with. Thanks for the massive debt, Wayne! Angry


why? because Hockey says so? .... does he even know how to turn on his calculator?  Grin Grin Grin Grin


How many times do this clown's BS claims about Swan, Labor and the economy
have to be refuted before it sinks in that he is dead wrong?

He is not posting a fact, or even an opinion, he is posting a proven, demonstrable
and acknowledged (world-wide, by experts) lie.

And he does so on an almost daily basis.

It may not be trolling, but in my book it's definitely spamming.


Wow, talk about delusional! What about Swan's $300bn+ debt? What about his numerous/record deficits? What about his wasteful spending? Swan is never going to be talked about in good terms as a former Treasurer, only the damage he did will be remembered - and there's plenty of that to be seen and felt even now!
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Re: Labor's legacy: a decade of deficits!
Reply #7 - Mar 31st, 2014 at 10:17am
 
While I agree that Labor had some very poor economic management at times, you need to realise that a healthy economy is NOT measured by the surplus or defecit.  Unfortunately, largely through the media, it is often presented this way, and people with a lack of understanding of macro economics see it as an irresponsible spender living beyond their means, while when it comes to a large economy, often the opposite is needed in times of hardship.

Pollies need to show some nerve and:

A) Stop caving in to pressure from the media regarding the actual importance of a defecit or surplus

B) Stop using these things as political point scoring mechanisms and break the cycle.

Spending money on wasteful things doesn't help much, as Labor has done in the past, but if you think cutting programs and spending, taking billions out of the economy is going to help, you are wrong indeed.
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Pete Waldo wrote on Jan 15th, 2014 at 11:24pm:
Thus killing those Canaanite babies while they were still innocent, was a particularly merciful act
 
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Re: Labor's legacy: a decade of deficits!
Reply #8 - Mar 31st, 2014 at 10:20am
 

To get out of debt takes hard work for a long time.

There is no easy way to do it
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Re: Labor's legacy: a decade of deficits!
Reply #9 - Mar 31st, 2014 at 10:25am
 
Kat wrote on Mar 31st, 2014 at 9:43am:
John Smith wrote on Mar 31st, 2014 at 9:25am:
Armchair_Politician wrote on Mar 31st, 2014 at 9:16am:
This is what happens when you have an economic illiterate like Swan running the country's finances. Swan's attempt to spend his way out of trouble has just created more problems that Abbott/Hockey now have to try to deal with. Thanks for the massive debt, Wayne! Angry


why? because Hockey says so? .... does he even know how to turn on his calculator?  Grin Grin Grin Grin


How many times do this clown's BS claims about Swan, Labor and the economy
have to be refuted before it sinks in that he is dead wrong?

He is not posting a fact, or even an opinion, he is posting a proven, demonstrable
and acknowledged (world-wide, by experts) lie.

And he does so on an almost daily basis.

It may not be trolling, but in my book it's definitely spamming.


Are you disputing Labor's track history with budget deficits? Huh

When was the last time a federal Labor Govt delivered a surplus  budget? Huh

A decade of deficits is also a decade of defacto tax increases.

What was there last effort.  $300 Billion or so?  $300 billion in tax increases.

Look at that WA when you vote on Sat.  Labor's 300 Billion in tax increases..........enjoy.... Angry

....and that's just the Federal mob.... Roll Eyes
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Re: Labor's legacy: a decade of deficits!
Reply #10 - Mar 31st, 2014 at 5:07pm
 
How
Howard's last budget
planted the
seeds of deficit


8 May 2013



...






Shadow treasurer Joe Hockey promises major cuts to spending and welfare if the coalition is elected while the government, having been forced to walk away from its budget surplus promise, is now cutting previously guaranteed benefits like increases in family benefit payments.


The focus on these sorts of welfare cuts begins the dismantling of policies that were central to John Howard and Peter Costello’s budgets, especially the pair’s final big-spending 2007 budget, which bestowed generous tax concessions – in areas such as superannuation – and transferred income to families that came to be dubbed “middle class welfare”.


In my comment piece on last year’s federal budget for The Conversation, I began with the proposition that “good policy should be free of surprises”.

Although governments need to pay for additional expenditure promises – like Gonski and the NDIS in this case – there is also the need to address the underlying structural problem of reducing existing expenditure when revenues fall.

All this is at a time when the carbon tax, the mining tax – and just about every tax – is not raising the expected revenue, and Treasury's forecasting performance is not looking good.

The point is that
fiscal policy should be made in the context of a long-term vision for the economy
.

This includes getting everyone who wants to into work, providing the public infrastructure needed to increase productivity, the right mix of private and government healthcare and education; and reform of the regulatory environment. We should see clear lines being drawn between the major parties with regard to their philosophy. However, in recent decades we haven’t seen much of this.

Under John Howard, the Liberal-National Party coalition government sought to position itself as good economic managers in contrast to Labor. It recorded budget surpluses after 1997-98 in every year except one (2001-02), with surpluses reaching around 1 per cent of GDP during its fourth term. The record economic growth led to huge windfalls in receipts from company income tax.

Falls in unemployment, jobs growth and wages growth greatly increased personal income tax receipts. While government expenditure as a proportion of GDP was fairly stable, albeit rising slightly, this has to be seen in the context of a switch from public provision of services to private provision. Consequently, there was less provision of government services but increasing government expenditure.

In the 2004-05 federal budget, treasurer Peter Costello announced the baby bonus, a lump sum payment of $3000 to parents receivable after the birth of each child. It has since risen from $3000 on commencement on July 1, 2004, to $4000 in 2005 and to $5000 on July 1, 2008, and is indexed to inflation. Wayne Swan subsequently reduced the baby bonus to $5000 from September 1, 2012, and to $3000 for second and subsequent children from mid-2013.

In the same budget there were other significant increases in benefits to families with children as well as tax cuts for all Australians. As more than one commentator pointed out, there was an incredible degree of giving with one hand and taking away with the other with inevitable administrative cost and waste.

The biggest single item of government expenditure is on social welfare. The majority of the recipients are middle income households due to the generosity of family payments. In 2007, even families with $100,000 in income were eligible for child support. In effect, what the Howard government built up is a system of massive transfers from middle income taxpayers back to middle income consumers. It might well have been more efficient to let these middle class households keep the money instead of paying extra tax.

In 2007, during the election campaign, further planned personal income tax cuts of $34 billion over five years were promised by both the Howard government and matched by Labor, with the latter firmly in its policy-copying “me too” election mode.

The result of policy-matching meant that the Howard government effectively locked  the next government into its tax reforms including raising tax thresholds and reducing the top tax rate of 45 cents per dollar, ultimately lowered to 40 cents per dollar.

https://www.businessspectator.com.au/article/2013/5/8/federal-budget/how-howards...






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« Last Edit: Mar 31st, 2014 at 5:14pm by buzzanddidj »  

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Re: Labor's legacy: a decade of deficits!
Reply #11 - Mar 31st, 2014 at 6:28pm
 
If budget surpluses are the only metric that indicates sound economic management why is Gough Whitlam not put up high on a pedestal.
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Re: Labor's legacy: a decade of deficits!
Reply #12 - Mar 31st, 2014 at 6:33pm
 
We now have an infrastructure deficit.....Who was in charge when the coffers where bulging and blew it on buying votes instead of building infrastructure???

Huh Huh Huh
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Re: Labor's legacy: a decade of deficits!
Reply #13 - Mar 31st, 2014 at 6:44pm
 
buzzanddidj wrote on Mar 31st, 2014 at 5:07pm:
How
Howard's last budget
planted the
seeds of deficit


8 May 2013



http://www.theage.com.au/ffximage/2007/10/15/newshowardcostello_wideweb__470x319...






Shadow treasurer Joe Hockey promises major cuts to spending and welfare if the coalition is elected while the government, having been forced to walk away from its budget surplus promise, is now cutting previously guaranteed benefits like increases in family benefit payments.


The focus on these sorts of welfare cuts begins the dismantling of policies that were central to John Howard and Peter Costello’s budgets, especially the pair’s final big-spending 2007 budget, which bestowed generous tax concessions – in areas such as superannuation – and transferred income to families that came to be dubbed “middle class welfare”.


In my comment piece on last year’s federal budget for The Conversation, I began with the proposition that “good policy should be free of surprises”.

Although governments need to pay for additional expenditure promises – like Gonski and the NDIS in this case – there is also the need to address the underlying structural problem of reducing existing expenditure when revenues fall.

All this is at a time when the carbon tax, the mining tax – and just about every tax – is not raising the expected revenue, and Treasury's forecasting performance is not looking good.

The point is that
fiscal policy should be made in the context of a long-term vision for the economy
.

This includes getting everyone who wants to into work, providing the public infrastructure needed to increase productivity, the right mix of private and government healthcare and education; and reform of the regulatory environment. We should see clear lines being drawn between the major parties with regard to their philosophy. However, in recent decades we haven’t seen much of this.

Under John Howard, the Liberal-National Party coalition government sought to position itself as good economic managers in contrast to Labor. It recorded budget surpluses after 1997-98 in every year except one (2001-02), with surpluses reaching around 1 per cent of GDP during its fourth term. The record economic growth led to huge windfalls in receipts from company income tax.

Falls in unemployment, jobs growth and wages growth greatly increased personal income tax receipts. While government expenditure as a proportion of GDP was fairly stable, albeit rising slightly, this has to be seen in the context of a switch from public provision of services to private provision. Consequently, there was less provision of government services but increasing government expenditure.

In the 2004-05 federal budget, treasurer Peter Costello announced the baby bonus, a lump sum payment of $3000 to parents receivable after the birth of each child. It has since risen from $3000 on commencement on July 1, 2004, to $4000 in 2005 and to $5000 on July 1, 2008, and is indexed to inflation. Wayne Swan subsequently reduced the baby bonus to $5000 from September 1, 2012, and to $3000 for second and subsequent children from mid-2013.

In the same budget there were other significant increases in benefits to families with children as well as tax cuts for all Australians. As more than one commentator pointed out, there was an incredible degree of giving with one hand and taking away with the other with inevitable administrative cost and waste.

The biggest single item of government expenditure is on social welfare. The majority of the recipients are middle income households due to the generosity of family payments. In 2007, even families with $100,000 in income were eligible for child support. In effect, what the Howard government built up is a system of massive transfers from middle income taxpayers back to middle income consumers. It might well have been more efficient to let these middle class households keep the money instead of paying extra tax.

In 2007, during the election campaign, further planned personal income tax cuts of $34 billion over five years were promised by both the Howard government and matched by Labor, with the latter firmly in its policy-copying “me too” election mode.

The result of policy-matching meant that the Howard government effectively locked  the next government into its tax reforms including raising tax thresholds and reducing the top tax rate of 45 cents per dollar, ultimately lowered to 40 cents per dollar.

https://www.businessspectator.com.au/article/2013/5/8/federal-budget/how-howards...








What an absolute load of utter crap! Howard/Costello left office with the budget in surplus, the debt paid off and a multi-billion dollar Future Fund set up. Rudd couldn't possibly have taken over an economy in better shape if it had been run by a dictator. To blame the current fiscal situation on the last budget of Howard/Costello is absurd in the extreme due to the fact that it's been seven years since Rudd became PM! By the way, how much revenue was lost by Labor increasing the tax-free threshold by around double? How much revenue was lost due to dodgy estimates such as the mining tax? It took in next to nothing, but Labor still spent as if it already had the money in the bank!!!  Grin Grin Grin
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Re: Labor's legacy: a decade of deficits!
Reply #14 - Mar 31st, 2014 at 7:03pm
 
crocodile wrote on Mar 31st, 2014 at 6:28pm:
If budget surpluses are the only metric that indicates sound economic management why is Gough Whitlam not put up high on a pedestal.

Good point.

The Whitlam government was the first government since the Second World War to make the delivery of surpluses a stated aim, in stark contrast to the previous Coalition government of Menzies/Holt/Gorton/McMahon that routinely ran deficits in almost every one of the 23 budgets that they handed down. Which government delivered more surpluses - Whitlam or Menzies/Holt/Gorton/McMahon? Which government delivered more deficits?
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