The 2017-18 Federal Budget: Taxing Our Way to Prosperity

Every year, the government seems to make it harder to really see what they’re doing with our money in the budget – whether by renaming things, requiring an extra click or two to access various papers or simply by the tried and true method of burying its sins deep into the treacherous abyss.

TMR refuses to be beaten.

If you want simple, no-nonsense budget analysis that can’t be found anywhere else, read on.

All figures have been sourced from the official 2017-18 budget papers and are presented so that you can form your own opinion.

Revenue

I’ve already shown on numerous occasions that the government doesn’t have a revenue problem.

Following this year’s budget, nothing has changed and the government’s revenue gravy train is set to roll on (figures sourced from pages 11-6 and 11-7 here):

Budget 2017

It’s incredible that you will not find a graph like this anywhere in the budget papers or anywhere else on the internet. It should be compulsory for every politician to have it posted to their pinup board and on the back of their toilet door.

Just stop and look at that last green bar for 2017-18 and see how much larger it is than the previous green bar. Now look at the last time one of those green revenue bars increased by a similar amount since the government started racking up debt…

(It’s ok, I’ll wait)…

In short, government revenue for the coming year is projected go up by a staggering 6.9% (up from $405.7 billion to $433.5 billion). Are you expecting to get a 6.9% pay rise this year? Probably not.

This year’s tax victims are those nasty foreign investors; the big banks anyone who has superannuation, a shareholding in, deposit, mortgage or employment with a big bank; anyone who pays the Medicare levy (yes, that means you); ‘evil’ multinationals who don’t pay their ‘fair share’; and, of course, smokers.

As you can see, the above graph clearly shows that the government is trying to ‘fix’ the budget by taxing even harder – and continuing to spend money it doesn’t have at pretty much the same rate it has for the last 10 years. In other words, doing what Labor would do.

Any time someone tries to dribble some nonsense about ‘percentages of GDP’ as justification for this budget being ‘ok’ or ‘sensible’, just tell them that the graph doesn’t lie.

Spending

The analysis here couldn’t be simpler: look at spending for the financial year about to end (2016-17), compare it to the budgeted spend for the next financial year (2017-18), see where the biggest changes are – and then ask ‘what the hell are you doing with my money and why you nefarious bastards?!’.

NB: looking at anything beyond the upcoming 2017-18 financial year (i.e. forward estimates) is generally pointless. Governments are already worse than the IPCC when it comes to forecasting.

For each major government function, the following table shows:

  • the 2016-17 budget figures from last year;
  • the 2016-17 actual spending figures (i.e. compared to the budget figures from last year). This is a new feature this year and will tell us some pretty interesting things;
  • the 2017-18 budget figures for the upcoming financial year; and
  • the budgeted increases and decreases in plain dollar and percentage terms.

For further ease of reference, the functions have been ordered by percentage change (I wonder why the government doesn’t do this anywhere in the budget papers?).

2017 Budget Spending

(Figures are in millions of dollars).

The first thing to note is that the government intends to increase overall spending by 3.0% ($13.5 billion).

To put this in some perspective, the current inflation rate is 2.1% and the annual wage growth rate is 1.87% (1.8% for the private sector and 2.25% for the public sector).

That aside, the following may have also come across your mind on reading the above table:

  • Why is welfare being increased by $8.3 billion – and at a rate (5.4%) that is 80% greater than the overall average and NEARLY TRIPLE THE AVERAGE ANNUAL WAGE GROWTH RATE?
  • Why did ‘general public services’ blow out by about $4.5 billion based on last year’s budget figures? (No, the answer isn’t ’rounding error’).
  • On what basis does the government now think that it can simply cut ‘general public services’ by $6.5 billion?
  • As much as the government wants to be seen to be doing something on the ‘housing affordability crisis’ – it has budgeted to spend the same amount that it did last year: about $5.3 billion give or take (here’s hoping they wuss out again and come in well under).
  • Given that ‘security’ was supposedly one of the central planks of the budget, why is spending on public order and safety being reduced by 2.3%?
  • Why is spending on ‘other purposes’ going up by $6.3 billion – and at a rate (7.4%) that is well over double the overall budget average?

‘Other purposes’ – a primer

For those not familiar with ‘other purposes’, allow me to put it in the government’s own words:

Other purposes — the increase in expenses from 2017-18 to 2020-21 largely reflects growing general revenue assistance payments (largely GST) to be made to the States and Territories, increasing public debt interest costs and the conservative bias allowance component of the Contingency Reserve.

If you’ve been a regular reader of TMR’s budget analysis, then you’ll probably have a fair idea on what’s coming on this. But first, let’s dig a little bit deeper to see where the money’s going.

Spending – a closer look

The following expanded table provides a further breakdown on spending for each of the above functions.

In what a hard leftist would probably describe as sheer lunacy, TMR has ‘radically’ put everything in the one table and organised the components of each function according to percentage change (someone send me to The Ministry of Love already):

Breakdown

(Figures are in millions of dollars).

Now that we have some more information, let’s see what else there is to notice.

Other purposes – the main course

This category is always the star of the show these days:

  • Firstly, the interest payments on the government’s $490 billion debt will cost about $17.2 billion in 2017-18. In other words, well over half the $29.4 billion budget deficit that’ll be added to the debt this coming financial year will be used just to cover this.
  • Yes, that’s right, over half the $29.4 billion the government will be borrowing in 2017-18 to ‘fund our lifestyle’ will be used to pay the interest on our debt.
  • Again, you are correct: the government is borrowing copious amounts of money simply to pay the interest on our debt.
  • Please stop what you’re doing and process this… if you’re not quite angry enough about this yet, go here.
  • Moving on, local government assistance will bizarrely plummet, from the $3.4 billion or so that will have been spent by the end of 2016-17, to $1.2 billion for the upcoming financial year.
  • Hang on a minute, let’s get this straight: in 2015-16, the amount spent on local government assistance was $1.1 billion and the budgeted spend for 2016-17 already doubled this to $2.2 billion. Then, actual spending went out to $3.4 billion. Excuse me? Does anyone know why we needed $3.4 billion in federal assistance for local governments last year or how or why the budget blew out by so much? I sure don’t. As for the government’s explanation (at page 6-45):

Expenses under local government assistance relate to financial assistance grants made to the States and Territories and consist of a general purpose component and an identified local road component, both of which are untied, allowing councils to direct the grants to local priorities [TMR: aaaaarghhhh!]. The expenses are expected to decrease by 66.0 per cent in real terms from 2016-17 to 2017-18, reflecting the bringing forward of the first two instalments of the 2017-18 Financial Assistance Grants program for payment in 2016-17. Further information on Australian Government assistance to local governments can be found in Budget Paper No. 3.

  • By all means, hop on down to Budget Paper No. 3, type ‘local government’ into the word search and go nuts in trying to explain where the money went and why an extra $1.2 billion absolutely had to be ‘brought forward’ last year without delay – on top of the $1.1 billion increase that was already budgeted. That aside, I suppose any time you can use two levels of government bureaucracy to get things done with other people’s money instead of one, then you absolutely must do it before the opportunity disappears or before common sense makes you change your mind.
  • However, taking the cake for sheer stupidity this year is the budgeted amount for natural disaster relief – which is set at a paltry $9 million for 2017-18, then $2 million for 2018-19… and then a stone cold zero for the next two years after that. Yes, really (go to page 6-44).

And here I was thinking that climate change was going to lead to more severe weather events and bushfires. Or is it the case that our reduced emissions are already reaping the benefits by reducing natural disasters?

Gillard’s NDIS keeps coming home to roost

Last year, as the NDIS kicked into gear, spending on people with disabilities was budgeted to go up by $4.3 billion (from $29 billion to $33 billion – an increase of 14.8%).

(NB: in the end, the government managed to defer about $1 billion of this spend).

This year, the overall disability spend is set to go up by another $6.8 billion (an increase of 21.5%) – a further sign that the government has already completely lost control of the NDIS. If anyone can tell me what’s actually been delivered under this scheme for the $10 billion or so spent so far – along with who qualifies and who doesn’t – that would be great.

Meanwhile, the forward estimates don’t make for better reading, with another $20 billion being added to the overall disability bill over the next four years – bringing the total annual disability spend to a cool $50 billion ($20 billion of which will be for the NDIS alone – by which time about $68 billion will have been spent on the project):

NDIS

An increase in the Medicare levy was somewhat inevitable given that:

  • there was never the money to pay for the NDIS to begin with;
  • ditching the NDIS would have been political suicide (you don’t hate disabled people do you?); and

Don’t worry, if you’ve got that Groundhog Day feeling, you’re not crazy (yes, that’s right, the Medicare levy was already increased to ‘fund’ the NDIS back in 2013/14).

Veterans

Of all the people to throw a bit of extra charity to, you would think our veterans would be near the top of the list – especially while the government is on a welfare spending spree. Right?

Please, don’t be ridiculous (see pages 6-22 and 6-24):

Veterans

Veterans 2

Veterans 3

As it turns out, according to the government, we’re just plum out of veterans (apparently):

The estimated decrease of 13.3 per cent in real terms from 2017-18 to 2020-21 for veterans’ community care and support is mainly attributable to the decrease in the number of veterans and relevant dependants accessing residential aged care.

Expenses for the assistance to veterans and dependants sub-function are estimated to decrease by 5.0 per cent in real terms from 2016-17 to 2017-18, and by 12.4 per cent in real terms from 2017-18 to 2020-21, predominantly reflecting an expected reduction in the number of beneficiaries.

ICB

This year, I have a special section dedicated to things that just simply don’t add up or make any sense whatsoever.

Here’s the list:

  • The budget magically goes from a $21.4 billion deficit in 2018-19 to a $2.5 billion deficit in 2019-20 – and then a $7.4 billion surplus in 2020-21(see page 11-7). I wonder if anyone in the Press Club is going to inquire as to how that’s actually going to be achieved? I guess anticipating absolutely no natural disasters whatsoever for the next four years must help – it’s not like the Queensland floods cost the Federal Government $6 billion or anything. That aside, I’m going to leave this one to Jalen Rose:

  • Speaking of the foreign aid budget, Bishop was ‘only’ supposed to spend $6.09 billion in 2016-17 (see table 4) – an increase of 11.3% on the previous year’s spend of $5.47 billion. Instead, she ended up spending $6.69 billion – an increase of 22.3% on the previous year’s spend (see page 6-51). Why has nobody asked about this? Where did the money go? What benefit did we get?
  • I questioned above how the government expects to cut ‘General public services’ by $6 billion – particularly when this item blew out by $4.5 billion last year. Turns out, all it needs to do is tweak a few things with the ‘Government superannuation benefits’ and, voila! Something that cost $9 billion last year will now only cost $3 billion a year (shhhh, be cool man). Given that this item is worth more than the new Medicare levy and almost as much as the new bankeverybody tax, I’ll leave you to decide what to make of this explanation contained in the budget papers:

The fall in expenses from 2016-17 to 2017-18 in the government superannuation benefits sub-function reflects the use of different discount rates. In accordance with accounting standards, the superannuation expenses for 2016-17 apply a discount rate based on long-term government bonds at the commencement of the financial year (2.7 per cent). Forward years are estimated based on the discount rate applied by the superannuation scheme actuaries in preparing long-term cost reports (6 per cent).

(See page 6-15).

  • Ohhhhhh – discount rates. I get it now. I’ll have to apply this method to my mortgage.
  • Last but not least is ‘general administration’ which:
    • for agriculture, forestry and fishing, amounts to an insane 25.6% ($761 million) of the function’s budget (second highest);
    • for social security and welfare, amounts to 2.5% ($4.1 billion) of the function’s budget;
    • for health, amounts to 4.0% ($3.0 billion) of the function’s budget; and
    • for education, amounts to 0.9% ($304 million) of the function’s budget.

Aside from the $8 billion being spent overall, if someone could sensibly explain how this set of circumstances came to be, that would also be great.

Slip sliding away

Lastly, for some reason, I just couldn’t get this song out of my head as I was writing this:

As it turns out, the fourth verse says it all:

God only knows
God makes his plan
The information’s unavailable
To the mortal man
We’re working our jobs
Collect our pay
Believe we’re gliding down the highway
When in fact we’re slip slidin’ away

Now where’s that stiff drink?

This entry was posted in Budget, Federal Politics and tagged , , , , . Bookmark the permalink.

53 Responses to The 2017-18 Federal Budget: Taxing Our Way to Prosperity

  1. C.L.

    Fantastic bumper post.

    The budget magically goes from a $21.4 billion deficit in 2018-19 to a $2.5 billion deficit in 2019-20 – and then a $7.4 billion surplus in 2020-21(see page 11-7). I wonder if anyone in the Press Club is going to inquire as to how that’s actually going to be achieved?

    Indeed. Have you seen footage of the lock-up? There must be 300 ‘journalists’ in there, reading feverishly, but none of them ever ask any profound questions or publish analyses that transcend the “winners and losers” summaries beloved of newspapers.

  2. C.L.

    The other thing that annoys me about debt and accountability is prime ministers announcing lavish funding for things on the fly. Remember Howard ‘giving’ Indonesia $1 billion after the tsunami? Who gave him authority to give away a billion dollars? They think it’s their personal money.

  3. EvilElvis

    C.L.

    Most of those same journos understanding of economics only extends to, Fairfax bad. Independent journo good. I’m going on strike. Give me more money.

  4. arrrr

    I’d be interested to know how much extra revenue in the forecast is from bracket creep?

  5. mh

    Spend, tax, borrow. It’s the Labor and Laberal way.

  6. H B Bear

    Great post Marcus. The Lieborals should be using this to atta… oh hang on.

  7. Tim Neilson

    Great post Marcus.
    I’m glad you noticed the sneaky 12.5% increase in tobacco excise on rollies, cigars and pipe tobacco – on top of the 4 increases of 12.5% already legislated and the regular CPI increases.
    Tobacco smugglers are today’s freedom fighters.

  8. struth

    The insanity in all this is that Australians bend over and take this up the choofer.
    As long as they get themselves into a position so they can still see MKR, they drop their pants quicker than a pro with a hundred dollar bill.
    Our Pollies are doing exactly what is required of them by the U.N’s agenda.

    Transferring the wealth from the west to the corrupt third world.
    U.N. global “governance” by 2030.

  9. marcus

    Everybody – trust me when I say putting Paul Simon on repeat while you read my post really helps to ease the pain!

  10. Zyconoclast

    It’s incredible that you will not find a graph like this anywhere in the budget papers or anywhere else on the internet. It should be compulsory for every politician to have it posted to their pinup board and on the back of their toilet door.

    Tattooed on their foreheads would be better.

  11. closeapproximation

    Great post.

  12. gbees

    thanks for the heads up. Been restructuring my businesses and personal affairs and moving everything offshore. These bastards aren’t going to get me. The country is f#&ked.

  13. mh

    The budget magically goes from a $21.4 billion deficit in 2018-19 to a $2.5 billion deficit in 2019-20 – and then a $7.4 billion surplus in 2020-21

    The Credit Rating Agencies are taking a ‘wait and see’ approach.

  14. Robber Baron

    Your mistake Marcus is that you view this budget from the perspective of someone that must pay, not from someone that receives. It’s all about perspective.

  15. marcus

    You’re right Robber – I really need to make an appointment with a Ministry of Love representative:

    Only the disciplined mind can see reality, Winston. You believe that reality is something objective, external, existing in its own right. You also believe that the nature of reality is self-evident. When you delude yourself into thinking that you see something, you assume that everyone else sees the same thing as you. But I tell you, Winston, that reality is not external. Reality exists in the human mind, and nowhere else. Not in the individual mind, which can make mistakes, and in any case soon perishes: only in the mind of the Party, which is collective and immortal. Whatever the Party holds to be the truth, is truth. It is impossible to see reality except by looking through the eyes of the Party. That is the fact that you have got to relearn, Winston. It needs an act of self-destruction, an effort of the will. You must humble yourself before you can become sane.

  16. Roger

    Speaking of the foreign aid budget, Bishop was ‘only’ supposed to spend $6.09 billion in 2016-17 (see table 4) – an increase of 11.3% on the previous year’s spend of $5.47 billion. Instead, she ended up spending $6.69 billion – an increase of 22.3% on the previous year’s spend (see page 6-51). Why has nobody asked about this? Where did the money go? What benefit did we get?

    Indeed; Bishop’s perfidious department – with the highest number of high ranking public service executives with commensurate salaries in the government – is one of the fattest in the government and one from which we receive the little by way of a return to the national interest. The whole Yassmin saga which they, along with the ABC, have promoted at out expense, is highly illustrative of how this gravy train works.

  17. Roger

    Excellent work, marcus.

    I’m sending it to my local Liberal member.

  18. Some History

    “The real hopeless victims of mental illness are to be found among those who appear to be most normal. “Many of them are normal because they are so well adjusted to our mode of existence, because their human voice has been silenced so early in their lives, that they do not even struggle or suffer or develop symptoms as the neurotic does.” They are normal not in what may be called the absolute sense of the word; they are normal only in relation to a profoundly abnormal society. Their perfect adjustment to that abnormal society is a measure of their mental sickness. These millions of abnormally normal people, living without fuss in a society to which, if they were fully human beings, they ought not to be adjusted.”

    ― Aldous Huxley, Brave New World Revisited

  19. Baldrick

    Great post Marcus. Deserves a wider audience.

  20. Oh come on

    Fantastic work, Marcus. Your headline graph alone should be on the front page of every newspaper in the country. But denial actually is a river in Egypt, so carry on.

    We are so screwed.

  21. Rabz

    Thanks Marcus, just when I thought it was impossible to be any more annoyed with these squandermonkeys, your post just happens to appear.

    Incredible to think that labor and the greenfilth could be any worse. But indeed, they will be.

  22. Thank for the plain English translation of what is deliberately designed to keep the proles in ignorance.

  23. kc

    Gbees. Been doing the same =) Belize is “the go”

  24. kc

    Roger

    Excellent work, marcus.

    I’m sending it to my local Liberal member.

    Even if he/she bothered to read it, they wouldn’t understand or care. It is just about the “polls” and being re-elected.

  25. Fibro

    Great post Marcus, but i disagree with your NDIS numbers. They will be $100B plus in less than 2 years, if not 1. At your own peril, click on the NDIS case study link and have a read.

    https://www.ndis.gov.au/people-disability/examples-services-and-support.html.

    This will be the biggest self fulfilling junket that ever existed.

  26. Mike of Marion

    Have you sent a copy to Hanson and Bernardi?

  27. .

    Brilliant.

    Unbelievable that the Liberals and their base have basically surrendered to the ALP and Greens.

  28. herodotus

    C.L. – that billion to Indonesia is looking even worse this week as Ahok gets 2 years for supposed blasphemy! The Indons are not to be trusted with anything.

  29. kc

    NOT their “base”, Not by a f#@kin’ long shot.

  30. thefrolickingmole

    Well set out, the never ending addiction to OPM is just awful.

    The bank levy is a straight out tax, no different to the GST in that the banks will factor it into the rates charged and interest given to pass it on in full.

  31. Justin

    Some excellent analysis and questioning of the budget. It would be remiss however to ignore the off-budget spend-a-thon that qualifies as “good debt”. The financially illiterate press gallery (special mention for the AFR) wet themselves with delight at the prospect of a multi-millionaire investment banker taking charge. They didn’t bank (pun intended) on Government by Lehman Brothers. A stand out of this budget is the subprime approach to debt – taking piles of steaming excrement from past and planned rounds of pork barrelling and rebadge it as AAA rated productivity enhancing “good debt”. This way we can leverage up other peoples money even further, pay ourselves wonderful entitlements and bonuses, confident that when the music stops our guaranteed pensions are covered by the Future Fund and government guarantee. Future generations will find out the hard way they were conned by a slippery banker and the AAA rated assets are nothing more than toxic wind mills, solar farms, battery farms, pink batts, school halls, dud subs, gold plated rail and roads to nowhere, and a telco white elephant to name but a few.

  32. Robber Baron

    marcus
    #2378421, posted on May 12, 2017 at 12:28 pm
    You’re right Robber – I really need to make an appointment with a Ministry of Love representative:

    Only the disciplined mind can see reality, Winston. You believe that reality is something objective, external, existing in its own right. You also believe that the nature of reality is self-evident. When you delude yourself into thinking that you see something, you assume that everyone else sees the same thing as you. But I tell you, Winston, that reality is not external. Reality exists in the human mind, and nowhere else. Not in the individual mind, which can make mistakes, and in any case soon perishes: only in the mind of the Party, which is collective and immortal. Whatever the Party holds to be the truth, is truth. It is impossible to see reality except by looking through the eyes of the Party. That is the fact that you have got to relearn, Winston. It needs an act of self-destruction, an effort of the will. You must humble yourself before you can become sane.

    Your post = + the forecast national debt (it’s that good!)

    We must all learn to love our enslavers.

  33. Deplorable

    “Excellent work, marcus.

    I’m sending it to my local Liberal member.”

    Why bother I send stuff to Hunt and I suspect it goes straight in the bin never a reply.
    At least I get the very occasional reply from Abbott but nothing from any other politician of any party.
    Australia your rooted.

  34. Rafe

    Thanks marcus!
    Much appreciated!!

  35. Neil

    I think it shows how great the Howard/Costello govt was. When they won office in 1996 Labor had just produced 5 large deficit budgets. Within 12 months Howard/Costello had produced a surplus budget

  36. stackja

    Liberty Quote
    We must comprehend that it is impossible to improve the economic conditions of the underdeveloped nations by grants in aid. If we send them foodstuffs to fight famines, we merely relieve their governments from the necessity of abandoning their disastrous agricultural policies.

    — Ludwig von Mises

  37. Aynsley Kellow

    I must admit, I still bristle at the $6 billion for the Queensland floods. Much of the damage in Brisbane was caused by keeping the water levels too high in Wivenhoe. Once the Tugun deal plant (thank you Tim Flannery) and the water network were commissioned, Wivenhoe’s operating manual should have been rewritten – by the minister’s authority. The Commission of Inquiry cleared the operating engineers of breaching the manual, but seems not to have asked whether the manual should have changed once there were other sources of water. Even though Tugun was mothballed, it could be called on if needed, so space behind Wivenhoe was of more value than water, especially at the start of the wet season during a La Nina.
    I fail to see why the Australian taxpayer had to pay for this folly.

  38. Harlequin Decline

    Excellent summary, by far the best I have seen.

    The DFAT budget is a joke, if the country was flush with funds it might be OK to hand out some money to foreign despots in return for benefits to Oz but to borrow money and then give it away is criminal insanity.

  39. Empire GTHO Phase III

    Marcus

    Your valuable community service is appreciated.

    Cats
    Go forth armed with the evidence and slay the swampies. Every conversation with everyone is an opportunity to propogate reality.

  40. stackja

    Aynsley Kellow
    #2378568, posted on May 12, 2017 at 2:40 pm
    I must admit, I still bristle at the $6 billion for the Queensland floods. Much of the damage in Brisbane was caused by keeping the water levels too high in Wivenhoe. Once the Tugun deal plant (thank you Tim Flannery) and the water network were commissioned, Wivenhoe’s operating manual should have been rewritten – by the minister’s authority. The Commission of Inquiry cleared the operating engineers of breaching the manual, but seems not to have asked whether the manual should have changed once there were other sources of water. Even though Tugun was mothballed, it could be called on if needed, so space behind Wivenhoe was of more value than water, especially at the start of the wet season during a La Nina.
    I fail to see why the Australian taxpayer had to pay for this folly.

    Australian taxpayer had to pay for this folly because they voted ALP/Greens. No RGR no folly.

  41. gbees

    Thnaks kc I’ll check out Belise.

  42. Roger

    Even if he/she bothered to read it, they wouldn’t understand or care. It is just about the “polls” and being re-elected.

    I know my local member; he will read it.

  43. Roger

    I fail to see why the Australian taxpayer had to pay for this folly.

    Fair enough.

    But then we continue to subsidise the chronically underachieving Tasmania.

    The reason? Federation.

  44. .

    The Escapologist on Belize

    From late 2014:

    I’ve never seen such blue water. I’m in Belize to investigate what it has to offer retirees… and let me tell you, as well as this warm blue sea, it has a lot:

    It’s quintessentially Caribbean with an atmosphere to match (no shirt, no shoes, no problem). There is warm, tropical weather year-round, which ensures you can always enjoy the beautiful scenery.

    And the low cost of living means a couple can live well on $2,000 or less a month.

    An established expat community makes the transition for newcomers easier. It’s English-speaking, even if it’s the second or even third language for many locals. It’s no problem to get around, with the main highways in good shape, regional airlines providing service all over, and frequent and on-time water taxis serving the island communities.

  45. Tom

    Please add my appreciate for this post. The most interesting number for me was being able to calculate that the effective interest rate we’re paying on our ballooning debt is still about 3.3% — when official rate we’re paying for new borrowings is nearer 1.5%. That’s a reflection of the damage done by the spending binge Rudd and Gillard embarked on between 2007 and 2013 when interest rates were much higher. Just a reminder: our 2016-17 interest bill ($17.2 billion) is almost exactly half of our total defence spending ($34.6 billion in 2016-17). With a 50% increase in defence spending ($17 billion more), we could finance a super-sizing of the SAS (with backup from the army and air force) to destroy Islamic State militarily — without American help. So what is the debt actually paying for? Principally, a supersizing of the moocher queue and pissing money against the wall on our education system, which has never had more appalling results in literacy and job readiness.

  46. .

    Funny you say that Tom. An emergency budget measure, which could be permanent, would b to wipe out one year of high school and Kindergarten.

    Our literacy and numeracy standards would not change in a statistically significant way. School education would become 15% cheaper instantly.

  47. kc

    Gbees…mate, maybe see you over there. We could have cat drinks

  48. Neil

    Just a reminder: our 2016-17 interest bill ($17.2 billion) is almost exactly half of our total defence spending

    The worst thing is 60-70% of our debt is foreign so i guess the interest payments go overseas. I think we are unique as most Western countries can fund the majority of their debt from local sources. Furthermore they have overseas assets to cover foreign debt.

  49. Rohan

    arrrr
    #2378379, posted on May 12, 2017 at 11:38 am
    I’d be interested to know how much extra revenue in the forecast is from bracket creep?

    The other side of the coin to this analysis, is where the tax receipts are coming from. In the graph at the bottom of the ABS page, it shows business profits haven’t grown since the GFC. Completely flat lined. GST has slowly but steadily increased, but I’d wager no higher than inflation. Personal income tax receipts are doing all the heavy lifting, so let’s increase the top marginal rate by applying an increase to the Medicare Levi. When you see this, there’s no hope in hell of the political thieves will lower the personal marginal tax rates. None.

    So yes Arrr, I would think that bracket creep would play a significant role. Especially considering the huge pay rises we’ve seen in the public service and heavily unionised sectors of the economy. In begrudging fairness to the later, they actually value add.

    But hey, the meme is that businesses are not pulling their weight, so let’s tax the crap out of them. Because that will grow the economy.

  50. RobK

    Thanks Marcus,
    This is the kind of analysis I was hoping for on the night, instead only talking heads. Well done.

  51. Pingback: The 2017-18 Federal Budget: Taxing Our Way to Prosperity | Catallaxy Files | Cranky Old Crow

  52. I knew it was bad, but it’s worse than I though. We really are stuffed. Time to hunker down and look after oneself as best one can.

Comments are closed.