AUSTRALIANS will spend almost $37 million each day just to pay the interest on the nation’s borrowings, as the Government’s debt burden balloons.

But in releasing figures showing the budget deficit has blown out by $2.3 billion, Treasurer

Scott Morrison says the Federal Government will hold its nerve and continue its “patient” rescue of a struggling economy.

Those figures show that the national debt, now at $278 billion, will climb to $364.5 billion in four years’ time. It will cost taxpayers $1.1 billion a month - or $36.9 million a day - to pay the interest on that debt.

The Government’s Mid Year Economic and Fiscal Outlook statement shows the deficit will be $37.4 billion for 2015-16 and that the budget is likely to remain in the red until 2021.

Australians could be saddled with the equivalent of $30,000 of debt each unless steps are taken to prevent Gross Government Debt from breaking the $647 billion mark within a decade.

Mr Morrison on Tuesday announced $10.6 billion worth of spending cuts, including reductions in bulk-billing incentives for pathology, funding for aged care providers and tougher means-testing of childcare benefits.

The cuts more than offset $10.2 billion worth of additional spending the government has committed to since the May budget.

Mr Morrison said the Government was taking a “patient’’ approach towards repairing the budget because it did not want to risk damaging the economy or job creation.

“We’re not there yet but we’re not going to take detours, we’re not going to take short cuts,’’ he said.

“We’re not going to put the safety of the passengers at risk and those passengers are growth and jobs of Australians.

“That’s why we’ll remain very focused on this workmanlike approach to delivering on this task.’’

Mr Morrison’s approach is in contrast to former treasurer Joe Hockey’s failed attempt in 2014 to persuade the Senate to back harsh spending cuts.

The end of the mining boom has contributed to a $33.8 billion writedown in government revenue projections.

Government debt is projected to hit $552 billion in 2019, or $346.5 billion when measured on a net basis.

The pre-Christmas budget update, released in the middle of the financial year, included a downgrade in economic growth projections from 2.75 per cent to 2.5 per cent this financial year.

The national unemployment rate is expected to peak at 6 per cent next year. But this will be of little comfort to residents of South Australia, where the official jobless rate was 7.8 per cent last month.

Opposition Leader Bill Shorten criticised the Government for making cuts to health funding instead of doing more to tackle multinational tax evasion or closing superannuation tax concessions for high-income earners.

“The Liberal government’s budget is on a road to nowhere, with no prospect of improving,’’ Mr Shorten said.

Business groups said the MYEFO document demonstrated the need for government spending to be brought under control and the tax system to be overhauled.

Australian Chamber of Commerce and Industry chief executive Kate Carnell said the budget update had confirmed that “the good old days’’ of windfall tax gains from strong commodity prices were over.

“We risk living in a fool’s paradise if we think we can afford to keep the high level of public spending we locked in during the boom years,’’ Ms Carnell said.

The Government will forgo $4.1 billion in tariff revenue over the next four years as a result of the free trade agreement with China.

But Finance Minister Mathias Cormann said the deal would benefit Australian exporters and consumers who could purchase cheaper Chinese goods.

Whats been hit

Health and aged care

■ $639 million from Medicare by scrapping bulk-billing incentives for pathology services, and changes to bulk-billing incentives for GP services and magnetic resonance imaging.

■ $472 million cut to aged care providers by changing the formula used to determine payments.

Working families

■ $441 million from childcare by reducing subsidies for families who earn more than $250,000, capping places in a subsidised nannies program and closing an affordability program.

■ $125.7 million over three years from Family Tax Benefit A by continuing to freeze the income level at which a means-test kicks in at $94,316.

■ $105.1 million over three years by treating parental leave payments as “income” when assessing eligibility for other payments.

Social Security

■ $2 billion from recovering welfare overpayments and cracking down on social security rorting.

The environment

■ $317.5 million from the Green Army by capping projects at 500 per annum.

Police

■ $65.8 million from Australian Federal Police through efficiencies from international deployment group program and returning unspent funds to Treasury.

Thank goodness the Libs are in charge "we have a plan the plan is working and we're sticking with the plan''.

      “We risk living in a fool’s paradise if we think we can afford to keep the high level of public spending we locked in during the boom years,’’ Ms Carnell said.      

If only we'd had someone even half-competent as Treasurer during Labor's six disastrous years in office. Such a pity we got that economic illiterate/vandal Wayne Swan...

I don't know why you persist with this nail ... the adults are in charge now and there is no longer a budget emergency.


Try to keep up.

Armchair_Politician wrote on Dec 18^th, 2015 at 9:43pm:


..........oops.....an inconvenient truth