On the eve of the Federal Government’s 2013 Budget release, Treasurer Wayne Swan will deliver a raft of numbers that will leave many bamboozled by the extent to which the expected surplus that was promised has turned into a resounding deficit. The Government will argue that a series of external factors have conspired to negate the steps taken to deliver the promised surplus. Unfortunately, for the ordinary voter trying to discern fact from fiction, this is not an easy task, since politicians are experts in the art of spin.
Treasurer Swan has gone to great lengths to explain that the missing surplus is largely due to the strength of the Australian dollar. Manufacturing has been hammered and revenues lost, much of which was required to pay for the billions invested elsewhere. But before we venture down the path of the missing surplus, let us for a moment return to the facts. Wikipedia defines the word fact as something that has really occurred or is actually the case. Governments struggle to deal with facts because it always involves discussing the truth. So to avoid any confusion, reproduced below are the Government’s actual budget position since 1995.
Source: Australian Government Budget Papers
To put some timelines into perspective, The Liberal Government took office in 1996 with John Howard as Prime Minister for the period 11 March 1996 until 3 December 2007. The Labor Party Government took office in December 2007 and was initially led by Kevin Rudd as Prime Minister until Julia Gillard took over as the 27thAustralian Prime Minister on 24 June 2010. Treasurer Wayne Swan is the current Deputy Leader of Australia and the Treasurer, a position held since the Labor Party came to office in December 2007.
Now to the casual observer the figures in the reproduced table lead to a number of clear outcomes without the need to rely on external commentators confusing the facts. Firstly, Government receipts have continued to grow, despite the fallout from the global crisis that started in 2008. Since 1995, this number has risen from $113 billion to $330 billion by 2012. Similarly, payments have climbed from $128 billion to $371 billion over the same period.
Secondly, since taking office in 1997, the Liberal Party have delivered surpluses in every year, except 2001-02 where a $1.1 billion deficit was recorded. In contrast, the Labor Party have failed to register a surplus despite the promise and a commitment to do so.
As a consequence, Australia no longer enjoys the legacy of a strong balance sheet. In the space of six years, Australia’s net debt position has reversed from a net surplus of $44 billion to a net deficit of $147 billion and counting.
So these are the facts. No matter how you spin it or recast the numbers, the inescapable conclusions are pretty clear. Receipts have gone up and not collapsed despite Treasurer Swan’s best efforts to convey a different view. Payments however, have gone up even faster and for that we are now left with rising deficits and higher debts.
Having failed to deal with its spending, Treasurer Swan has come up short. No amount of arm waving or finger pointing will change the facts that this Government, led by Prime Minister Julia Gillard and Treasurer Wayne Swan, have grossly mismanaged and over spent on what past governments have worked hard to deliver. Governments are elected to govern and adjust to the circumstances at hand. Treasurer Swan has been found wanting on two counts. His failure to chart a more prudent and conservative fiscal course compounded by his preparedness to spin the truth when the facts remain indisputable. September can’t come quick enough.