Following Cut & Paste this morning I thought I’d re-graph some data using the latest data from the MYEFO:
A spending crisis? It’s the revenue, stupid. David Marr on ABC Insiders yesterday:
NOW they’ve got to get back the revenue stream and, politically, it’s really tough.
Host Fran Kelly jumps in, in furious agreement:
EVERYONE was thinking once we were through the global financial crisis it would come back and it has not come back.
Fairfax’s Phil Coorey interrupts with his dash of woe:
IT’S not going to …
I’ve done these graphs before, but to remind ourselves – I have graphed Receipts and Payments as a percentage of GDP from 1970-71 through to 2016-17. I have calculated the average values of these two variables over the same time period and graphed those too. Data are from the latest MYEFO.
The red line is payments as a percentage of GDP and the broken red line is the average payments as a percentage of GDP. The blue line is receipts as a percentage of GDP and the broken blue line is the average receipts as a percentage of GDP. As we can see since 1970-71 Australia has had, on average, a budget deficit. What I did next was to zoom into the last few years looking at the end of the Howard-Costello era and the last government.
Receipts as a percentage of GDP are forecast to be at (about) the long-term average this financial year and then exceed that average. Payments as a percentage of GDP, on the other hand, remain well above the long-term average. So as we’ve been arguing some some time – spending is the problem, not revenue.