Labor: zero budget credibility

Give it up, Chris.  The deficit and debt would be lower under Labor.  And you have PBO figures to back up this risible claim.

Well, yes, if you could keep real government spending to 2 per cent per annum, that would make a big difference.  Indeed, your predecessor, Swanny, had all sorts of fine sounding fiscal rules – the pity was the Labor government could never still to them.

Please note that the PBO memo notes that the estimates have LOW reliability.

Here is the story:

Labor is seeking to fight back in the political battle over its economic legacy by releasing analysis that contradicts the government’s debt and deficit projections.

The shadow treasurer, Chris Bowen, said commissioned analysis by the independent Parliamentary Budget Office showed gross debt in 2023-24 would be about $270bn lower than the $667bn predicted by the government.

The Parliamentary Budget Office added a word of caution, however, saying its estimates of the values of government securities were “considered to be low reliability”.

Labor had asked the office to perform a “sensitivity analysis” of key budget indicators set out in the Abbott government’s mid-year economic and fiscal outlook (Myefo), released in December.

The office was asked to assume real growth in spending over the four-year budget period would replicate annual spending growth as outlined in the pre-election economic and fiscal outlook (Pefo). This would be followed by annual real growth in spending of 2%, and no increase to tax receipts above 23.6% of gross domestic product.

“The net debt of the government is projected to be $110bn in 2023-24 under the conditions imposed in the sensitivity analysis,” the office said. “The projected net debt in 2023-24 published in 2013-14 Myefo is approximately $370bn.”

Bowen said the report showed net debt “would be a whopping $260bn less” than projected by the Coalition government. He said the budget “would be in surplus by $34bn by 2023-24 – a $46bn swing from the $12bn deficit in Myefo”.

“The government has sought to blow out the size of the debt and deficit over the next decade as part of a clear and deliberate strategy to cynically mislead the Australian people about the previous government’s legacy and to set the scene for severe cuts to services and more broken election promises,” Bowen said.

“Labor commissioned the Parliamentary Budget Office to independently cost the medium-term budget figures had the Coalition not committed to nearly $14bn in new spending and if Labor’s medium-term fiscal strategy been maintained.”

Bowen said the government’s first budget update “included a number of cynical decisions that painted a distorted picture about the future state of the budget”.

“This analysis confirms that the government’s secret decision to drop Labor’s fiscal rules dramatically inflated the current debt situation, painting a doomsday picture to build support for its ideological drive to deliver massive cuts in the upcoming budget,” he said.

The treasurer, Joe Hockey, strongly rejected claims of budget games during question time on Tuesday.

Bowen directly accused Hockey of “cooking the books to artificially inflate debt and deficit”.

Hockey replied that Labor’s budget efforts resumed “an episode of MasterChef”. He pointed to the former treasurer Wayne Swan’s abandoned surplus pledge and then took a swipe at Bowen, who briefly served as the treasurer after Kevin Rudd’s return to the prime ministership.

“And the books were so cooked that he piled on the mustard, he piled on the horseradish, he piled on the barbecue sauce,” Hockey told parliament on Tuesday.

“It was the Labor party that kept promising a surplus. It was the Labor party that kept making big, heroic promises about the economy that were never delivered. Every single number Labor published for six years was wrong.”

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14 Responses to Labor: zero budget credibility

  1. H B Bear

    Boy Wonder should have wheeled out The Goose to give his announcement more credibility. He has plenty of spare time on his hands now.

  2. Gab

    Ha ha. I was just reading the transcript:

    ” Mr BOWEN (McMahon) (14:51): My question is to the Treasurer. I refer the Treasurer to the Prime Minister’s answer a moment ago when the Prime Minister said that official development assistance would reach 0.5 per cent of GNI when the budget returns to surplus and referred to this as ‘an aspiration’. If this is the case, why did the Treasurer’s mid-year economic forecast say that official development assistance would reach this target in 2017? Is this another example of the Treasurer cooking the books to artificially inflate debt and deficit?

    Mr HOCKEY (North Sydney—The Treasurer) (14:52): Talk about cooking the books! It is like an episode of Masterchef over there! Fair dinkum. There, you’ve got some of the best. The member for Lilley, he really cooked them—he overcooked them. He promised a surplus. Three hundred times he promised a surplus! I have heard of a souffle rising twice, but not 300 times! And then along comes another chef. [...]

    Mr HOCKEY: Of course, then along came the member for McMahon. [Chris Bowen]

    Mr HOCKEY: And the books were so cooked that he piled on the mustard, he piled on the horseradish, he piled on the barbecue sauce— [...]

    Mr HOCKEY: The problem is, the Labor party cooked the books and the rest of Australia got food poisoning! Talk about cooking the books—Labor was adept at it. And they still do not understand how to put the recipe together.

    Mr Bowen interjecting—

    Mr HOCKEY: The member for McMahon does not understand the recipe!

    Mr HOCKEY: He came into this place all indignant about debt. The member for McMahon does not even know the difference between net debt and gross debt.

    Mr HOCKEY: He does not even understand the recipe! And yet, the Labor Party has the gall to come in and say we have cooked the books!

    Mr HOCKEY: It was the Labor Party that kept promising a surplus. It was the Labor Party that kept making big heroic promises about the economy that were never delivered. Every single number Labor published for six years was wrong. Every single number! And it was not just their own incompetence, it was Labor Party deceit. Shuffling payments and shuffling revenue from year to year in order to try and manufacture a surplus. And they believed their own cooking! They went out there and said, ‘We’ve delivered a surplus’. They did not even pretend!

    Mr HOCKEY: They actually went out there and told the Australian people—and paid for it using taxpayers’ money—’We have delivered a surplus.’ The fact is, they were just $123 billion short. That is a big number for you—

    Mr HOCKEY: I would say to the member for McMahon that no matter how much he cries out he will not find any aid overseas.”

  3. .

    “No worries guys, only 393 bn of debt”
    “No American tanks have entered Baghdad and our Lion of Babylon regiment has smashed them anyway”
    “The cheque is in the mail…”

  4. H B Bear

    More comedy gold from the ALP.

    It will be at least a decade before anyone other than Ol’ Leathery, La Tingle and Phabulous Phil takes these clowns seriously. Just re-release a K D Wrong Greatest Hits album or something.

  5. Rabz

    FFS, these drooling labor cretins never got a budgetary forecast correct in the entirety of their abominable reign.

    Not even remotely correct, BTW – they frequently out by a magnitude of tens of billions.

    Give me a break.

  6. H B Bear

    “I’m Wayne Goosesteen, World’s Greatest Treasurer and I approve this message.”

  7. Craig Mc

    Bowen is bringing all the genius to the shadow treasurer position that made his time as Immigration Minister the spectacular success it was.

  8. Yohan

    I can’t believe the hubris of Bowen today, to claim that if only we were following ‘Labor’s fiscal plan’, we would be on track for surplus in 5 years.

  9. .

    Australia’s credit rating ought to be binary: when ALP in power, junk status.

    It’s for our own good.

  10. stackja

    Liberty Quotes
    Blessed are the young, for they shall inherit the national debt.
    — Herbert Hoover

  11. I will be interested to see if Tom Switzer leaps to Bowen’s defence in the Spectator this week.

  12. Squirrel

    Hockey was in fine form in yesterday’s QT – it really was very funny, and in Bowen’s case, a perfect illustration of leading with the chin.

    Still, even if it’s pot trying to call kettle black, it’s better to have Labor talking about things that matter, than wasting all their time on righteous PC frolics and lame attempts at gotcha politics.

  13. Andrew

    Looks like they’re decided to campaign on the theme “massive deficits, border protection and the world’s biggest / only carbon tax.”

    Seems like 51% of the country is responsive to that message. Although I think the current poll was distorted by the Alan Joyce Lynching Party.

  14. Noodles Romanoff

    Chris Uhlmann made me spurt my coffee over the computer screen this morning when interviewing Bowenon AM. His first question was along the lines of “Is this the same independent Parliamentary Budget Office that forcast all of the budget surplusses for Labor in government?”

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