(Note: this is an updated version – with a new chart by year rather than by Government document (eg: budget, MYEFO, PEFO, UEFO).
Today’s MYEFO shows the following forecasts in $ million:
|-41 468||-12 288||3120||3257|
With Wayne Swan stating that this was
The fastest positive turnaround in the budget in more than 40 years.
The Treasurer also said
This result would not be possible without the strict fiscal rules that we have set for ourselves
Adding up the Labor government policy decisions and parameter variations since the 2007 PEFO, we find that its policy decisions have detracted from the budget by over $103 billion while the parameter variations have detracted more than $69 billion: a total detraction from the budget of more than $173 billion. The table attached shows the decisions since the Rudd government was elected and up to today’s MYEFO.
The much vaunted fiscal discipline? Since this year’s PEFO, the Government has taken policy decisions which DETRACT from the budget bottom line of $143 million, while over the same period parameter variations have detracted $4.3 billion. Do you see a consolidation?
The chart attached shows the breakup of policy and parameter decisions for each year since the 2007-08. Without exception, the Rudd and Gillard governments have taken policy decisions that have detracted from the budget balance. That is, they have never consolidated the fiscal position – even today’s promise wasn’t a consolidation – it was a further detraction from the budget balance. (Data are here).
Note that the Rudd and Gillard Governments have only ever promised (ie: in their budget papers) to improve the budget bottom line once: in its first budget the 2008-09 Budget. In that Budget, Labor took policy decisions to increase revenue by $19.7 billion and increase expenses by $18 billion – a net improvement to the bottom line of $1.7 billion. In every other document bar none, it has taken policy decisions which detract from the budget bottom line. And note in particular the Orwellian claims on savings: an increase in tax or revenue is not a saving: it is a tax increase.