- Treasurer Jim Chalmers Provides Mid-Fiscal Year Update
- The debt accumulated over the next four years is higher than previously expected
- Immigration skyrockets with another 80,000 people
Nearly $150 billion of additional debt was accumulated over the next four years, more than $20 billion more than previously anticipated. Nearly $60 billion in additional government spending in this financial year alone. And despite promises to reduce immigration this financial year to 260,000, numbers have soared by another 80,000.
These are the key takeaways from an apocalyptic mid-fiscal year update that Treasurer Jim Chalmers conveyed this morning.
It’s not good news for any Australian who has a mortgage, pays rent or relies on stronger economic growth to support their business.
The increase in public spending in this financial year alone means Labor is spending more than any previous government in Australian history.
Therefore, the size of government has reached record proportions. Recurring expenses are not being adequately covered by tax revenues. The national budget survives beyond its means unless someone in power finds a way to curb spending or raise taxes (without stifling economic growth).
However, Chalmers says the spending he has undertaken is “responsible.”
Rising spending also makes it harder for the Reserve Bank to cut interest rates, because government spending is contributing to higher underlying inflation.
As Daily Mail Australia reported yesterday, Australia’s inflation is high by the standards of comparable OECD countries.
Treasurer Jim Chalmers says the spending he has undertaken is “responsible”
That means the chances of a rate cut before the next federal election are low, although the perilous state of the economy means there remains a remote chance that rates could be lowered sooner than expected to try to help improve economic performance. from Australia.
We are still in a per capita recession according to the latest budget figures, and we will continue to be in this situation for the foreseeable future.
At the moment, each new generation is likely to be worse off than the last, unless something changes.
So where do these latest economic figures leave us politically?
They probably won’t make Labor reduce its spending promises before the election. More than $5.5 billion has been set aside for yet-to-be-specified spending initiatives. In other words, more electoral support, on top of the announcements already made, such as reducing HECS debts by 20 per cent.
For its part, the Coalition criticizes Labor’s spending and refuses to make deeper cuts.
But will you describe how you could do things differently? Since doing so will likely provoke a fear campaign by the government.
Both today and yesterday, Chalmers has been saying that a coalition government led by elected Peter Dutton would reduce health spending and support for Medicare.
Dutton has made no such promises, but scare campaigns in politics are rarely based on facts.
The increase in public spending in this financial year alone means Labor is spending more than any previous government in Australian history.
Chalmers claimed today that Australia’s economy is in better shape than “most OECD countries”, but that rhetoric flies in the face of The Economist’s analysis of the performance of OECD countries, ranking Australia at 21st place among 37 nations.
The Treasurer also said Australia is heading for a “soft landing”, meaning the per capita recession will not turn into a full-blown technical recession, and unemployment is unlikely to rise too significantly.
You’re probably right about that, but it’s not a badge of honor that reinforces your financial management credentials.
Australia has avoided a technical recession since 1991, apart from a brief pandemic-induced recession that affected the entire world. Nor should we risk a recession now.
The challenge is to find ways to boost economic growth, control inflation and reduce unsustainable spending as a precursor to reducing the public debt burden on future generations.
Labor has no plan to do any of that, and the Coalition, if it has one, hasn’t announced it yet.
Australia continues to live in the moment instead of planning for a better future. Without better political and economic leadership we will not be a fortunate country for much longer.