Let’s be absolutely crystal clear about this.
If you click on the official Prime Minister of Australia government page the first thing you will read is
“Over six years, Labor ran up a $667 billion debt on the nation’s credit card.”
Aside from wishing that the Prime Minister of Australia had a more
visionary or engaging opening line, it is a bald faced lie and that
isn’t a good way to convince people to trust you.
You will be subjected to a rolling slide show of Tony, Joe and
Matthias, photographed in various serious looking poses. Is anyone else
getting sick of these photos of Tony sitting at tables with people
surrounded by lots of booklets and oversize graphs? Is that supposed to
convince me that he knows what he is doing? Because he has his photo
taking wearing a white lab coat trying to look into a microscope am I to
say oh well the $7 co-payment must be a good idea?
But back to the lie.
“Ran” indicates past tense – in fact Tony Abbott specifically states
that this happened “over six years”. What he fails to mention is that
the figure of $667 billion was a projection for possible debt in ten
years’ time from Hockey’s MYEFO report produced last December, and it
included increased Coalition spending decisions like the $8.8 billion
gift to the RBA and all the interest that will cost us, and the foregone
revenue from the carbon and mining taxes, and changed assumptions about
future unemployment – in other words it was a political exercise
designed to come up with as big a number as they could so they could
then justify draconian measures as they claim to be reducing it.
Using the term “nation’s credit card” is purely designed to cause
fear. The nation doesn’t have a credit card. In fact we actually print
money and can do so if we have to as they have done in the US. Credit
cards can get individuals into serious debt and the interest rate is
crippling. Using that term makes people think of that rather than a
sensible understanding of how government finances work.
While the Coalition continues to peddle this lie I will continue to
remind people of the truth because the Australian people have a right to
know the real state of our finances. And because nothing pisses me off
more than getting lied to about important stuff.
So what is the truth?
The independent pre-election economic and fiscal outlook’s (PEFO)
medium term projections, using long-standing methodology, show that on
Labor’s policy settings the Budget reaches a modest surplus in 2016-17,
surplus grows to 1% of GDP in 2020-21 and net debt returns to zero in
The latest Budget update shows net government debt for 2013-14 of
$191.5bn, or 12.1% of Australia’s GDP (not $667 billion Mr Abbott). By
contrast, net government debt in advanced economies around the world
averages 74.7%, according to the International Monetary Fund.
Gross debt in 2023‑24 is projected to be $389 billion with surpluses
projected to build to over one per cent of GDP by 2024-25. There are no
surpluses predicted over the forward estimates, there is a higher debt,
and surplus of 1% 4 years later than predicted by PEFO using Labor
After the GFC hit, the deficit peaked at $54.5bn, or 4.2% of GDP, in
2009-10 – less than half the advanced country average. In 2012-13, the
federal deficit was $18.8bn or 1.2% of GDP, compared to an advanced
economy average of 4.9%.
The claim that Labor left “fiscal time bombs” and secret cuts and
spending is another blatant lie. In the 2013-14 Budget, Labor took the
unprecedented step of releasing 10 year figures for the National
Disability Insurance Scheme and Gonski school reforms, demonstrating how
they were funded over the long term. Those figures, as well as the
efficiency dividends on the public service, were there for all to see.
The fact is that Tony’s election promises were made knowing this but, as
we saw, working out how to pay for his promises was not on his mind.
Australia is one of only 10 economies in the world with AAA ratings
from all three agencies – in the company of other countries with strong
public finances like Germany, Canada, Sweden, Singapore and Switzerland.
This status shows our finances are considered to be stronger than those
of the vast majority of advanced economies – including the US, the UK,
Japan, France and New Zealand.
Despite headlines to the contrary, and ill-informed statements by the
Prime Minister, the agencies have confirmed our credit rating with a
I hesitate to compare government finances with individual or business
finances, but I will say this. When you go into significant debt, you
usually aren’t looking to pay it off completely the next week. The
decision to go into debt is made by looking at your assets, your ability
to service the debt, and the value of the investment of the debt.
We do need to make some changes. There will never be a time when
fine-tuning isn’t needed because we live in an ever-changing world with
an often volatile global economy. Situations change requiring
adjustments to be made.
We are not in any sort of crisis. We have the luxury to be able to
do long term planning to meet the challenges of the future whereas so
many other countries are having to make decisions for the short term as a
matter of survival.
Tony Abbott is looking for a legacy for himself rather than for our
nation. He wants to say the debt was huge and I made it smaller and he
doesn’t care if he has to lie about figures to make this look true. If
he really wanted to reduce debt why on earth would he stubbornly insist
on his paid parental leave scheme? Why wouldn’t he look at negative
gearing and superannuation tax concessions and capital gains
reductions? Why would he buy 58 fighter jets that won’t be in service
until sometime next decade?
The “Infrastructure Prime Minister” is building the Abbott Highway to
Hell to speed up the path to destruction and he is more than happy to
sacrifice anyone who can’t help him along his way.