This year’s Budget highlighted how fiscally doomed we are as a nation, even if the government tried to hide the fact in plain sight.
And they have used a mixture of deception and deception in doing so.
Even before Budget day, “the surplus” was strategically leaked to the media: at $9.3 billion, it surprised most observers in positive terms. Product of favorable terms of trade.
Sounds good, right? Mistaken.
It was not the surplus for the next financial year, the year in which all the new spending and tax cuts are scheduled to begin. It was a surplus in the year that ends in just six weeks: the 2023/24 financial year.
That came and went. The next four financial years will all be deficits and in a big way. The first is a deficit of almost 30 billion dollars, which the following year increases to almost 50 billion dollars. Remember that the national debt is already over $1 trillion.
Treasurer Jim Chalmers (pictured with his wife Laura at last year’s Press Gallery Midwinter Ball in Canberra) announced a surplus for the financial year ending, when he should have been focusing on the four years of deficits starting in just six weeks .
Even just paying the interest on that amount of debt is difficult. The fact that we continue to accumulate more and more debt, with no plan to do anything about it, should worry all Australians.
And let’s be clear: both sides of politics are to blame for this disaster.
Budgets are supposed to refer to the next financial year, not the last. The content of Treasurer Jim Chalmers’ speech focused on new spending and tax cuts coming next financial year, highlighting income tax cuts as the “cornerstone” of the budget.
But by tying up an old surplus, Chalmers attempted to create the false impression that all the new spending and tax cuts were occurring within a fiscally prudent package, because he was passing along a surplus.
Only it wasn’t.
Indeed, it was difficult for the government to try to focus backwards on the surplus in the financial year that is about to end, but forwards on new spending and tax cuts in the next.
That’s called having your cake and eating it.
To make matters even worse, through complicated accounting there is another $80 billion of spending that is not even counted in the total budget deficits for years to come.
And these politicians have the temerity to lecture business leaders when they think they are not being very forthcoming when questioned on camera in show trials such as those by parliamentary committees.
How many hypocrites we have serving us in Canberra!
Unless the main political parties find a way to work together to repair the financial foundations of the Budget, future generations will unfairly be saddled with a huge debt with annual interest payments that are difficult to manage.
A situation made worse by the recurring expense that Australians are becoming accustomed to and will find it difficult to live without when doomsday arrives and the financial tap is turned off, as it inevitably must.
Ordinary Australians make their own budget to ensure they don’t live beyond their means. Shouldn’t our government be doing the same?
Prime Minister Anthony Albanese (pictured) is the only member of the cabinet’s budget committee to have a degree in economics.
The opposition tried to condemn debt in Labour’s budget forecasts, but the last coalition government produced nothing but deficits (pictured is Peter Dutton)
We live beyond our means, simple as that. Families can’t do it for long when they make their own budget, and neither can countries.
The only way to fix the situation will be through tax increases, spending cuts, or both. And reforms also need to be implemented in the way we collect taxes and in the way state and federal governments work together.
The most worrying thing is that no one seems to care much about public debt, which means that accumulating it does not hurt governments politically like it used to.
We must force a change in approach, so that whoever is in power is more fiscally prudent.
Because both sides of politics have let spending get out of control for so long that opposition complaints become white noise.