On the silence of the Libs and Labor.
The fact that no-one wanted to talk about the legacy of the stimulus package is revealing. Labor didn’t want to discuss it because it brought back memories of the terrific waste involved, while the Coalition didn’t want to talk about it because to do so would reveal that they’ve done practically nothing to bring federal government debt under control. Both sides of politics have made the calculation that at the moment, in the midst of 28 years of uninterrupted economic growth, there’s few votes to be won by talking about government debt. The fact that in recent years it’s been population growth not productivity improvements that have fuelled that growth is also not discussed. It seems that to the major political parties, government debt is something that the voters’ children and grandchildren can worry about when the time comes. To me that’s a failure of leadership.
The gross debt of the federal government is currently approximately $560 billion. In the 2018/19 financial year the federal government will spend $17.8 billion on interest payments. Seventeen billion of anything is a big number to get your head around so let me put that into perspective. Interest is now the sixth largest single component of federal government spending after Social Security and Welfare ($175b), Health ($78b), Education ($34b), Defence ($31b), and what’s called ‘General Public Services’ ($24b) which includes public service salaries, foreign affairs and foreign aid ($5.7b), and superannuation benefits for retired public servants ($5b).
If you look at bit more closely within those areas you’ll see that we’re spending more on interest than we do, for example, on income support for people with a disability ($16.5b), higher education ($9.7b), or unemployment benefits ($10b).
A great time to contemplate higher power prices, significant threats to our major export industry, erosion of productivity by CFMEU-driven IR reforms and a rampant Keynesian in the Treasury. Not to mention higher taxes and the impoverishment of self-funded retirees. This party is the light on the hill?