Debt and Deficit - Coalition Budget Emergency

[thirdeye]

good article -
http://www.theaustralian.com.au/new...dget-bottom-line/story-e6frg6n6-1227096595716

'PBO chief Phil Bowen told senators yesterday the nation needed “sensible budget management” to scale back annual deficits amid continuing risks to the government’s outlook.

'But he warned that disputes in the upper house threatened to weigh down the budget by about $18 billion a year by 2024, undermining the government’s plan to deliver a surplus of about 1.4 per cent of gross domestic product in that year.'

The PBO raises another good point about starting early, building a buffer for the economy encase its subject to another negative shock. This is being agnostic on actual policies.

 

[Power Raid]

Pffft - if you have to add "which includes health" to your definition of "social welfare", maybe it's because no-one and his dog would have thought that you were referring to dentistry and doctors and hospitals and physios and optometrists when you claimed "The largest industry in SA is social welfare".

You should've left it at that, rather than revealing your poor levels of comprehension and then blaming me for it.

I never said 'just because of'. I never said anyone should wait for debt to reach projections. You're boring when you're just being a shill.

Normal states simply don't have social welfare as the largest industry.

Oh and I don't choose the definition rather the and does.

 

[madmug]

No one doubts we need to cut our cloth to suit. Its the nature of what to cut which is the bone of contention.
Attacking 'welfare' as if the 'problem' is all their fault & it is ok to have a %age of the population pushed further into poverty, destitution, ill health etc etc. is nothing but cheap nasty politicking.

Lifters & leaners is such a nasty & totally unfair term. Creating division in society is something that truly is 'unAustralian'. Seeing politicians do it makes me sick. Team Australia? What does that mean when you attack parts of the nation?

People need a hand up. Thats the basis of what should happen in a 'rich' country like ours. Just trying to cut them out of our society is just plain wrong. Its not the fault of those people that so many jobs have been shipped overseas. they didnt cause the GFC. They didnt force the $A through the roof. Why are 'they' made such scapegoats?

I know Abbott is a hater of working class people, but doen't the Libs represent more than just his nasty narrow view of the world?

 

[Ratts of Tobruk]

It’s not often you hear an Australian politician grumbling about increases in mining production, but that is just what the Western Australian premier, Colin Barnett, has been doing of late. He has accused the two big miners, BHP Billiton and Rio Tinto, of flooding the market with iron ore and thus bringing down the price. The collapsing iron ore prices are set to smash the WA and Australian government’s budgets. But the governments can’t blame the miners when both budgets anticipated much higher iron ore prices than we now have. As Wayne Swan often found out during his period as treasurer, government budgets are hostage to their forecasts... The Western Australian budget estimated iron prices to average US$122.70 in 2014-15. Currently, the spot iron price is around US$80 – 34% lower than forecast.
http://www.theguardian.com/business/grogonomics/2014/oct/28/miners-iron-ore-prices-colin-barnett

I thought getting forecasts wrong was all Labor's fault?

 

[Power Raid]

I thought getting forecasts wrong was all Labor's fault?

what is really driving this is the possible failure of BCIron, Atlas Iron, Mt Gibson and Gina's project failing into foreign hands or insolvency, due to increased production in a thin market.

it is suggested BHP and RIO are trying to eliminate its competitors. Everyone in mining knows this is not true, just like AGO, FMG, BHP, RIO and other other bulk producer, they need to produce "bulk" tonnes to remain profitable.

Colin is doing what is "right" for the state but he should simply stand back and let market forces take there course. I would suggest only FMG, BHP and RIO will survive and the remainder will collapse or change their business model.

 

[yibbida]

http://www.crikey.com.au/2014/10/13/so-much-for-no-more-debt-and-deficit/

The Finance Department’s monthly statements for July and August were released late Friday night, showing the extent of the debt:

• The government’s net debt projection for 2014-15 is $226.39 billion. That is an increase over last year’s target of $48.3 billion, or 27.1%. It is above last year’s actual outcome by $23.9 billion, or 11.8%
• In July this year, the debt increased from $202.46 to $208.15 billion;
• In August, the debt expanded further to $217.55 billion. That’s an additional $15 billion in two months, a rate of increase above 3.6% per month or 54% annually;
• Already, in two months, Hockey has borrowed 63% of the new borrowings he wants for the entire year; and
• The total interest bill for 2014-15 is forecast to be $14.7 billion. Last year, during which Labor managed the economy for only two months, it was $10.8 billion. The year before, which was all Labor’s management, thebill was $8.3 billion. So a 77% increase in interest payments in two years —  if this year’s target is met.

Two weeks ago the final budget outcome revealed the actual debt at June 30, 2014: $202.46 billion, more than $24 billion — or 13.7% — higher than forecast had Labor continued.

So the total increase now — well, at the end of August anyway — above the level Labor left last year is $39.45 billion. Up an extraordinary 22.1% already.

So 12 months on and it's all going as I expected and the opposite of what the Liberal Supporters were saying pre-election. Gullible lot.

 

[Redalert]

So 12 months on and it's all going as I expected and the opposite of what the Liberal Supporters were saying pre-election. Gullible lot.

There are external factors partially driving that, unless the federal government can jump start the global economy the budgetary situation will continue to deteriorate without spending cuts or tax increases. Look at the tanking terms of trade if you want to see evidence of that.

 

[Power Raid]

http://www.crikey.com.au/2014/10/13/so-much-for-no-more-debt-and-deficit/






So 12 months on and it's all going as I expected and the opposite of what the Liberal Supporters were saying pre-election. Gullible lot.

What do you mean? I think anyone sensible would have said it will take over a generation to pay off labor's debt.

The first 2 years will be about passing legislation to set the framework and the next 20 chipping away.

I really feel for the 10yo's in 2007-2012 who will be graduating soon and have to pay off the generation of debt left by labor.

 

[Jiska]

There are external factors partially driving that, unless the federal government can jump start the global economy the budgetary situation will continue to deteriorate without spending cuts or tax increases. Look at the tanking terms of trade if you want to see evidence of that.

There's always external factors driving economic conditions, like the GFC, but the righties would have us believe that the GFC was Ruddys fault.

 

[Ratts of Tobruk]

What do you mean? I think anyone sensible would have said it will take over a generation to pay off labor's debt.

Untrue. As proven when I first came on here and we looked at the numbers the debt was no worse than what Howard paid off. Yet you repeat this accusation all the time...

Of course how long "a generation" is can be debated. "A generation" for rabbits isn't long at all. But I spose counting it that way discounts you from being considered "sensible".

 

[Run n Spread]

Out of interest:

The largest industry in South Australia is social welfare. Given it is the largest, does social welfare underpin the economy?

See your point but wouldn't be that quick to laugh it off out of hand. Many industries are privatised why not that in the future. After all Rudd's wife made a mint. Anyway the welfare service workers and those controlling the purse strings need welfare recipients more than the other way round.

 

[Run n Spread]

I don't doubt there are serious structural issues in Australia's finances. While Labor went a bit hard with the stimulus and the current government is going at the finances with a chainsaw none are even close to sorting out what the problems are. Fundamentally there is a lack of revenue coming in and an economy reliant on one or two sectors disproportionately to such an extent middle class welfare is seen as a necessity to stop people going under and having a roof over their heads. Many things have gone very very wrong but neither party seems to have the wherewithal to really fix it. As long as we are overly reliant on services property and mining to China we are just going to fall into a giant hole we can't get out of.

 

[Power Raid]

See your point but wouldn't be that quick to laugh it off out of hand. Many industries are privatised why not that in the future. After all Rudd's wife made a mint. Anyway the welfare service workers and those controlling the purse strings need welfare recipients more than the other way round.

That's why the state is anti industry. Policies that keep the people poor, keeps the brainwashed and dependant people of SA under control.

The state culture is quite sad.

 

[Power Raid]

Untrue. As proven when I first came on here and we looked at the numbers the debt was no worse than what Howard paid off. Yet you repeat this accusation all the time...

Of course how long "a generation" is can be debated. "A generation" for rabbits isn't long at all. But I spose counting it that way discounts you from being considered "sensible".

So how long do you think it will take to pay off?

 

[Power Raid]

I don't doubt there are serious structural issues in Australia's finances. While Labor went a bit hard with the stimulus and the current government is going at the finances with a chainsaw none are even close to sorting out what the problems are. Fundamentally there is a lack of revenue coming in and an economy reliant on one or two sectors disproportionately to such an extent middle class welfare is seen as a necessity to stop people going under and having a roof over their heads. Many things have gone very very wrong but neither party seems to have the wherewithal to really fix it. As long as we are overly reliant on services property and mining to China we are just going to fall into a giant hole we can't get out of.

If we fix property 90% of our problems will be solved.

Our society, taxation and mindset treats the land lord as a protected species.

But fixing property would hurt the nation if we don't reform slowly but with uprise. We can not afford the 5th gear into reverse policies like power generation and mining.

 

[Power Raid]

There's always external factors driving economic conditions, like the GFC, but the righties would have us believe that the GFC was Ruddys fault.

No, it was the fault of the US being to proud to go into a recession in 2002 as they were concerned the recession would be linked to the sept 11 attacks.

To avoid the recession the implemented policy like low interest rates, crazy housing lending practices etc that lit the fuse for the recession we had to have.

Reckless!


Rudd had a similar pride issue as labor blew out the accounts under Hawke and Keating (a cost of reforming the nation). But the electorate could only remember 20% interest rates and high unemployment.

To avoid a repeat of a recession we had to have, he over cooked the economy and left us with a generation of debt.

 

[Jiska]

Untrue. As proven when I first came on here and we looked at the numbers the debt was no worse than what Howard paid off. Yet you repeat this accusation all the time...

I think he's referring to paying off the additional debt that's been created by the Abbott Government, at a higher growth than Rudd/Gillard.

 

[Jiska]

Rudd had a similar pride issue as labor blew out the accounts under Hawke and Keating (a cost of reforming the nation). But the electorate could only remember 20% interest rates and high unemployment.

What were the inflation levels under Fraser when Howard was Treasurer?

Here are the facts:

1. Inflation was higher under Fraser than at any time under Hawke and Keating.
2. Inflation hovered between 1 and 4 between 2000 and 2013 (under Howard/Rudd/Gillard) except for 2001 when it hit 6 under Howard's watch.

 

[telsor]

I think he's referring to paying off the additional debt that's been created by the Abbott Government, at a higher growth than Rudd/Gillard.

Because the senate wont pass the budget that will cut the deficit.

 

[Jiska]

Because the senate wont pass the budget that will cut the deficit.

Sounds very much like the precedence that was set in 1972.

The Senate isn't stopping the Government from reducing spending.

 

[Power Raid]

What were the inflation levels under Fraser when Howard was Treasurer?

Here are the facts:

1. Inflation was higher under Fraser than at any time under Hawke and Keating.
2. Inflation hovered between 1 and 4 between 2000 and 2013 (under Howard/Rudd/Gillard) except for 2001 when it hit 6 under Howard's watch.

I think your own "leap" to defence emphasises my point, that the labor camp is very sensitive to their management of the economy credentials. Why do you feel the need to respond that way especially when I believe the turmoil under Keating was perfectly reasonable?

 

[Jiska]

I think your own "leap" to defence emphasises my point, that the labor camp is very sensitive to their management of the economy credentials. Why do you feel the need to respond that way especially when I believe the turmoil under Keating was perfectly reasonable?

That's only because the Liberal camp leap to "attack" on economic credentials.

 

[Portsmeff]

That's why the state is anti industry. Policies that keep the people poor, keeps the brainwashed and dependant people of SA under control.

The state culture is quite sad.

fascinating that ultra conservative mining bogans from Perf keep harping on about SA being solely a welfare state (I assume caus we have a state labor govt). Can you provide any proof of this, or actually any statistics on employment numbers, disability pensions, unemployment pensions comparing the states. I didn't realise I was the only one employed by a private sector company in Adelaide, according to Team Idiot. All those thousands of people I see in the city each day must be pretending they have jobs, or employed in the welfare sector. Strange how people on welfare are buying hundreds of CBD apartments lately, I didn't realise they were luxury Housing Trust complexes

If only we had a Luis Vuitton shop in Adelaide, like they do in Perf, life would be so complete

 

[Power Raid]

That's only because the Liberal camp leap to "attack" on economic credentials.

The mentality should be .........sticks and stone may break my bones.

should we be $100s of billions in debt because of labor's pride, emotional weakness and what others think of labor?

 

[Power Raid]

fascinating that ultra conservative mining bogans from Perf keep harping on about SA being solely a welfare state (I assume caus we have a state labor govt). Can you provide any proof of this, or actually any statistics on employment numbers, disability pensions, unemployment pensions comparing the states. I didn't realise I was the only one employed by a private sector company in Adelaide, according to Team Idiot. All those thousands of people I see in the city each day must be pretending they have jobs, or employed in the welfare sector. Strange how people on welfare are buying hundreds of CBD apartments lately, I didn't realise they were luxury Housing Trust complexes

If only we had a Luis Vuitton shop in Adelaide, like they do in Perf, life would be so complete

I have posted the link but feel free to go to the RBA or the ABS