First the spin. The Government will now claim they have essentially addressed the budget emergency, taking the situation "from out of control to manageable".

The Prime Minister offered up the Intergenerational Report as evidence of that saying: "The document shows that we have halved Labor's debt and deficit going forward. Debt as a percentage of GDP which would have been 120 per cent under the policies of the former government is about 60 per cent under the policies of this government."

So the Government plans to ignore the raw figures that will in the near term at least show bigger deficits than they inherited; and they'll argue instead that they have done better than Labor would have done had they got re-elected and did nothing further to address the deficit.

That's a somewhat hypothetical argument but nevertheless the glass half full analysis that he prefers.

More to the point though is the declaration - and that's what it was - that the heavy lifting is over, at least until after the next election. That will have an enormous impact on how the Government is regarded by business and economists.

The direct question was put to the Prime Minister: "What's your response to people who may fear that that means you're easing up and resting on your laurels rather than doing more on structural reform?"

Good question.

The answer: "Well this budget certainly will be much less exciting than last year's budget because the task this year is at least 50 per cent reduced from the task last year. So inevitably it will be a much less exhilarating budget for those who are budget devotees and structural reform enthusiasts."

That was his response to the "structural reform enthusiasts"; a breathtaking abandonment of both previous rhetoric and economic strategy; a virtual acceptance that they are "easing up" and "resting on their laurels", such as they are.

And then the coup de grace. To the question, what happened to the promised surplus? or, as the journalist put it, "that graph that you showed us ... isn't it true that when you look at it, at no stage do you reach a surplus in the next 40 years?"

Abbott: "We get very close to balance."

Very close - in 2019-20 - and then, according to the document and the enclosed graph that he referred to, it all goes south again, in a big hurry.

And even that outcome is based on the assumptions that growth will average out at about 2.8 per cent; that Australia will have favourable terms of trade; and that the Government will keep bracket creep for at least another five years.


http://www.abc.net.au/news/2015-03-20/cassidy-abbotts-breathtaking-shift-in-econ...

____ wrote on Mar 22^nd, 2015 at 8:03am:
No it means that the weak govt is still a weak govt.

We all knew that the "Budget emergency" was nothing more than political spin and hyperbole. Now we have proof that Abbott was lying........ again.

That's 'hypothetical' Labor debt halved.

That's recorded so far right on the page, it aint even on the ledger.

That reminds me - how is it that if I bank money and cop some interest, I have to declare that interest as income even though I already paid tax on that money to put in the bank... but if I put it into super over and above what is considered a livable amount, and cop payment for that (even though I've paid a lower rate of tax for that money).... I don't have to declare it as income?

____ wrote on Mar 22^nd, 2015 at 8:03am:



My guess is that Tony's good government has been deferred indefinitely.