“If this Government cannot get the adjustment, get manufacturing going again, and keep moderate wage outcomes and a sensible economic policy, then Australia is basically done for. We will end up being a third rate economy... a banana republic.”In 2012 as Wayne Swann presents his fifth budget for the Labor Government the above words must be ringing in his ears to haunt him. Perhaps he takes comfort from being voted as being the World’s best treasurer.
Swann’s main objective was to produce a budget surplus for 2012/2013, something that a Labor Government hasn’t done for 25 years. There wasn’t a lot of room to move as the main big ticket project items like the National Broadband Network have already been quarantined from the budget.
One golden opportunity was to follow the U.S.A and further delay the purchase of military aircraft. This aircraft is already 10 years overdue and is virtually obsolete before it’s even delivered.
Another big ticket item is overseas aid. While it wasn’t reduced the promised increase was deferred. I personally think we should not borrow money to fund overseas aid just to look good in the United Nations chamber.
The deficit for the 2011/2012 (last years) budget has doubled from that estimated even though some spending was delayed a year. It looks like Swann has decided that he may as well be hanged for a sheep as a lamb, as he has shifted what would be normally in 2012/2013 expenditure to now, before July, this includes the offsets, rebates and pension increases that are designed to offset the extra costs caused by the hated ‘Carbon Tax’.
Bear in mind that no revenue has been received from the Carbon Tax or Mining Tax yet, they don’t come into effect until July, but the expected revenue is being spent now. The money is coming from overseas loans and bond issues and the debt is mounting up at an alarming rate, well I am alarmed, Swann and Gillard aren’t.
This year’s budget has been described as smoke and mirrors; I would add subterfuge and half truths to that as well.