In for a penny, in for $449 million

The danger of the government abandoning it’s commitment to fiscal discipline is this:

NON-GOVERNMENT parties plan to ramp up pressure for a rethink of the $449m research funding cuts, after the government last week abandoned plans for a budget surplus next May.

Acting Greens leader Adam Bandt asked Treasurer Wayne Swan to consider reversing the cut to the Sustainable Research Excellence program, along with the diversion of foreign aid funds to asylum seeker programs and harsher single parent payment arrangements.

“A number of harmful cuts have recently been made in the name of achieving the now abandoned surplus timeline,” Mr Bandt wrote.

Wayne Swan now lives in the worst of all worlds – all the budget “pain” he has inflicted is for naught while his fiscal credibility is in shreds.

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22 Responses to In for a penny, in for $449 million

  1. Rousie

    You just know they are thinking of funding NDIS & Gonski for the election.
    Surplus schmurplus.

  2. Mundi

    I still don’t know why they didn’t just do the NBN as stimulus, instead of completely throwing the money away on the green crap. They will probably get there 0.5$b back, it will be pocket change in swans $30b deficiet.

  3. Mike of Marion

    Gillard’s Government are “Irresponsibility of the Highest Order”. The finances of this Country are decimated

  4. ar

    Here’s their chance to inflict maximum damage on incoming Liberal govt… of course they’re going to do it…

  5. val majkus

    I’m no economist but I know we’re drowning in debt

    Why when the budget surplus promise was abandoned did the Govt win praise from many economists (present company excepted). He won praise from economists, business leaders and the Greens, with top Budget watcher Chris Richardson saying it would have been “dumb to chase the surplus and damage the economy”.

    Private-sector economists applauded what they said was a sensible recognition that a surplus could not be achieved without damaging the economy.

    Deloitte Access Economics director Chris Richardson said: “The surplus promise began as a really good idea to give discipline to the budget, but as the economic head-winds got harder, it changed from being a promise that was helpful to one that was starting to hurt. China has a had a bad year so the budget has a bad year. Let’s get over it.”

    Estimates vary about how serious the budget hole is. Mr Richardson said he still believed the government could get to within $5bn of breaking even this year.

    Barclays chief economist Kieran Davies said the budget figures for the first four months of the year showed the deficit was running at an annual rate of about $26bn.

    Allowing for some improvement over the remainder of the year, he said the deficit this year was likely to be in the region of $15bn to $20bn, down from last year’s $43.7bn.

    Can anyone tell me what damage to the economy was expected by the cutting of Govt spending; the main one that I can think of is loss of jobs but can’t remember the Govt mentioning this – well they wouldn’t would they.

  6. Rousie

    Yes Mike – the year of diversion & decimation

  7. John A

    This reminds me of the expression “to be hung for a sheep as a lamb”.

    I’d settle for them to be hung for their irresponsibility.

  8. William Bragg

    The danger of the government abandoning it’s commitment to fiscal discipline is this…

    where ‘this’ is that some previous cuts might be reversed. For Sinc and Cats that alone is sufficient to be bad. More sophisticated critics would ask whether the previous cuts were warranted or not. Given that they were done in pursuit of a non-sensible accounting objective – achieving a surplus – then there is a good chance that they weren’t warranted. If so, then the push by Brandt should be welcomed – not simplistically dismissed.

  9. Sinclair Davidson

    … critics would ask whether the previous cuts were warranted or not.

    Not just a pretty face. Yep, that is Swan’s challenge.

  10. papachango

    a non-sensible accounting objective – achieving a surplus

    Balancing the books is non-sensical? FMD.

  11. candy

    “debt” may not be a dirty word anymore, which is what Labor is counting on.
    What a shocking mess things would be if they bought their way back in.

  12. $500 million of research cuts…

    I say cut all Government research funding. The poor shouldn’t be taxed to fund AGW research for wealthy Greens.

    We’d get more bang for our research dollar if investors had to fund their own research and we had a flat tax of 15%.

  13. Cold-Hands

    Allowing for some improvement over the remainder of the year, he said the deficit this year was likely to be in the region of $15bn to $20bn, down from last year’s $43.7bn.

    No mention of all the fiscal sleight of hand (deferring revenue from 2011-12, pushing expenditure either forward (into 2011-12) or back (into 2013-14))? The non-surplus won’t be as bad as previous years, but not due to any fiscal discipline from the Goose.

  14. Jannie

    It wasnt so much a commitment to fiscal discipline, more an election strategy based on dodgy acounting.

    If you can’t get re-elected, you may as well get what you can while you can. Socialism is all very well while you are in government, but personal enrichment makes it all worth while.

  15. DaveF

    No surprises in that article. The afternoon after Swan made his announcement Bandt held a presser.

    “Now there’s no surplus Swan should be out there spending.”

    Any details?

    “The economy needs more spending.”

    Details?

    “A great opportunity for more spending.”

    It was pretty comical.

  16. handjive

    Snowball was fond of forming committees.
    He would give them grand names like “the Sustainable Research Excellence program, the Citizens Climate Committee, The Department of Renewable Energy Committee.”

    Snowball had a vision of a windmill.

    “A sustainable, clean green future could only be achieved with them”, he said.

    Though they never produced anything, or were of any benefit to anyone but the pigs, …

    With apologies/thanks to George Orwell.

  17. Crossie

    We have pretend politicians, the Greens, advocating for funding to research a fake looming crisis, the global warming, but with our non-fake half a billion. Isn’t politics grand?

  18. johno

    More sophisticated critics would ask whether the previous cuts were warranted or not

    As a more sophisticated critic, Australians would be better off if total government expenditure was restricted to around 10-15% of GDP. Therefore, any cut that reduces the size of government and moves us in the direction of much smaller government is, ipso facto, a good thing. QED

  19. Marky

    Why when the budget surplus promise was abandoned did the Govt win praise from many economists (present company excepted).

    I think what we see there is the difference between those with integrity to their principles – the government should not be praised for finally acceeding to what many of these commentators had been saying for long enough, that Labor had made such a mess of things already that to impose a target for surplus would be merely destructive – the difference between that type of commentator, and the other type who (fairly enough) are wary of an avaricious government that, at least for the moment, clings desperately to power and can still give them a belting.

    Oh, and then there are those from the distant planet of Canberra.

  20. Mark

    Yes. Quite so.

    Without their own self imposed restrictions and goals there is nothing stopping both Gillard and Swan to simply just toss the lot at whatever takes there fancy.

    There is no self restraint required now and with the likelihood of these clowns being unemployed in less than year being extremely high they have nothing to lose anyway. Every whacko scheme that needs a dollar or a couple of billion will get a green light, pun intended, as long as it conforms to the ideological fantasy of feeling good.

    All they have left is to wage a culture war to cripple what little conservatism is left in public life at the moment. And they can wage it hard with the restraint of economic credibility and accountability no longer an issue and with the gallery already forgiving them for breaking another “promise”.

    The fix is in and the shopping list of the left is long.

  21. kae

    Don’t worry….

    Circus monkeys escape after trailer crash…

    They’ve obviously run off to join the ALP.

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