The Lucky Country? Not any more

Helen Clark’s government forecast a decade of deficits…National arrested that. In Australia Julia Gillard is similarly facing a decade of deficits despite promising many times to balance the books. Predictably the Liberals have attacked.

Australia faces a decade of budget deficits with the annual total set to pass $60 billion in 2023 unless governments take tough action to “share the pain”, an expert panel has warned.

The Grattan Institute’s assessment comes as Treasurer Wayne Swan confirms the budget has taken a $7.5 billion hit since the midyear update in October.

He told the ABC from Washington: “We have seen the terms of trade come down but the dollar didn’t move. That’s caused a hit, if you like a sledgehammer, to revenues in the budget since the midyear update of something like $7.5 billion. And of course the impact won’t just be in this financial year. It will also be across the forward estimates.”

The institute says that while notionally on track to surplus now, the combined state and federal budget deficits should reach 4 per cent of gross domestic product by 2023, which is about $60 billion in today’s dollars and would be about $100 billion in 10 years’ time.

“Initiatives such as the national disability insurance scheme, the education reforms, direct action on climate change and parental leave are only a small part of it,” the chief executive John Daley said.

“The big driver, costing $30 billion, is extra spending on health. Contrary to popular belief the extra spending isn’t being driven by ageing. It’s that compared to 10 years ago, today’s 60-year-olds see the doctor more often, have more tests, face more operations and take more drugs. We are getting something out of the extra spending, more people are staying alive, but the question is, who is going to pay for it?”

The institute believes welfare spending will have to rise because the Newstart unemployment allowance is unsustainably low.

It says company tax revenue, mining and carbon tax revenue and general tax takings will slide – as a proportion of the economy – as the price of exports slips.

“The problem is the attractive solutions won’t buy that much money,” Mr Daley said. “Cutting middle-class welfare won’t be enough. Australia doesn’t have that much. Even if you axed the baby bonus, the schoolkids bonus and parts of Family Tax Benefit B that go to high earners you’d only make $4 billion.

“Eliminating government waste won’t help much either. Axing the Commonwealth departments of education and health might save the wages of 5000 public servants, but that’s only around half a billion.”

  • blokeintakapuna

    Looks like they’re running out of other people’s money to pay for their bribes.

    Now they’ll have to deliver solutions… Yeah Right!

  • wikiriwhi

    Oz is in a particularly strategic economic position as they are debt free thanks to their mining and Savings pension which National’s Muldoon took away over here leaving us with a very serious retiree pension problem. We would have been well advanced by now if National had not cashed in pension plans to investors that long ago. The short sightedness of that generation has sen this generation beleaguered by a far wealthier middle class who simply didn’t need to cash in their retirement savings way back in the 70”s. Ol Rob knew how to pander to middle class greed.

  • Simo

    The chook will get put through the fryer soon, along with the Green Taliban….hallelujah!

  • Patrick

    Swan was never going to balance the last budget it was all political spin. Now the chickens are coming home to roost. Labor are showing their spite just like their cousins in NZ, WA is getting raped in terms of their federal budget because they do not support Labor. The mining tax has not given Labor the windfall they predicted & now the trouble starts for Gillard. Hopefully this will be the end of her reign, corrupt spiteful commie.

  • johnbronkhorst

    and of the other things.?
    Kirk refused to even look at infrastructure building. Forcing a massive backlog of requirements, that in turn had to be paid for by BORROWING, or we would have run out of electricity, and petrol!!!!
    Kirk put money into a retirement scheme to bribe people for their votes, all the while the situation of CURRENT demands of the economy were ignored! In short there was no BALANCE to what kirk did and that caused the problems of the late 70′s and early 80′s.

    • http://www.national.org.nz/ Minarchist_kiwi

      Yes you are correct johnbronkhorst; Norman Kirk was our worst ever PM who was too stupid to accept economic realities.
      I am at a loss to understand why having a large sum of cash in a savings account (what compulsory super amounts to) is a good idea – what is the point of $200000 in cash when the roads are full of holes, and there are power blackouts because not enough dams have been built?
      It is like owning a rolls royce but not being able to afford the petrol or insurance

      • wikiriwhi

        “I am at a loss to understand why having a large sum of cash in a savings
        account (what compulsory super amounts to) is a good idea”

        Makes Oz wealthy. The state doesn’t have to dole out pensions.

        The Nat/Lab coalition are financial terroists. When we understand this we’ll vote third party which the coalition is fighting hard to undermine

  • johnbronkhorst

    So, if I am not mistaken….they are saying, as a solution…..Australia must …roughly……………….follow John Key’s and New Zealand’s current path, or go bust!!!???

    • Ronnie Chow

      Yes John , despite the gloom and doom merchants , NZ is the most sensibly managed country in the world .

    • NotForTurning

      NZ is bust. Trading as insolvent.

    • http://www.national.org.nz/ Minarchist_kiwi

      Yes!
      If you look at a map of NSW – from Wollongong in the south to Newcastle in the north – 60% of the Aussie economy is produced in that geographical area and it is almost 3rd world in terms of infrastructure.

      Roads, electricity, dams, transport, even banking are all well behind where they should be – ie: the infrastructure in that area cannot cope with what is being produced.

      It would cost $100 billion to pay for the infrastructure projects required to bring NSW up to a level where it can cope ….and the cupboard is bare …and the clock is ticking.

      John Key in NZ is (amongst other duties) ensuring NZ infrastructure can cope with our growing economy – and in a fiscally responsible way.

  • http://www.national.org.nz/ Minarchist_kiwi

    You really have to wonder whether the snide comments NZers make about the intelligence of Australians (most notably by Rob Muldoon) is manifestly true.

    Every so often Australians, in a fit of drunken madness, elect Labor governments; they, presumably in an even more drunken state, tend to re-elect these Labor governments.

    Did you know the last time a Labor government ran a budget surplus was in 1947?

    Chilling.

    • Gazzaw

      ,,,,and that surplus was on the back of a massive demand for meat, wheat & wool rather than any economic brilliance on labor’s part.

      • http://www.national.org.nz/ Minarchist_kiwi

        Yes and yes! -an even more bizarre thing about Australians (mentally deficient-wise) is that the Whitlam Government is viewed as some sort of success!

  • Changeiscoming

    “Helen Clark’s government forecast a decade of deficits…National arrested that”
    Maybe you are not up to date on current events Whale but I need to let you know that the current liberal National government is still spending more than it earns! In a big way!

    • johnbronkhorst

      Look up the definition of “arresting” in this context!!!!
      The budget is on track to be balanced meaning we are borrowing less and less. When it is balanced, we can stop borrowing and start paying down our loans.
      OBVIOUS MUCH?

    • Hazards001

      If the commie tart hadn’t spent 9 years of growth on re election bribes NZ would have been sitting on a surplus to make your eyes water.

  • Ronnie Chow

    Even a country which digs up money can’t balance the books .

    The Key Government is doing a magnificent job in the most difficult circumstances faced by any NZ Government since the Great Depression .

    • NotForTurning

      Utter, utter bullshit. This may be worse than 1984 & 1991 combined, but compared to Roger’s budgets — not even thingking about Ruth — the response has been completely and utterly pathetic.

      Name one Hellen Klark policy that National has yet overturned — except to go even further left than Hellen would have gone?
      – Maori flags: more left
      – W[]hangani: more left
      – Bailouts: more left (SCF)
      – Taxes: more left – whacking up GST!
      – Student Loans: more left- more nannyism
      – Dole & DPB: yet more left, more money for treatment & mollycoddling.

      What would a real government have done: told the truth – that NZ is only afloat through borrowing. Terminated that borrowing. Terminated most welfare programmes. Privatised all schools & DHBs. Ended unionism. Sold TVNZ & shut down RadioNZ. The list is very long, we know all of it, and Hone Kii has done none of it

  • johnbronkhorst

    Off the subject, but, something on Yahooxtra that Australia could possibly also follow: Changes to employment law.
    Most of the changes were announced before the last election and include:

    * Allowing employers to opt out of multi-employer bargaining

    * Removing the 30-day rule that forces non-union members to take union terms and conditions

    * Parties negotiating a collective agreement do not have to reach a conclusion – the Employment Relations Authority (ERA) can declare whether bargaining is at an end

    * Businesses with fewer than 20 employees will be exempt from rules covering the transfer of employees when service providers in industries like catering or cleaning change

    * Any employee will be able to ask for flexible working arrangements, not just caregivers as at present.

    * Requiring the ERA to provide an oral determination at the end of a hearing, followed by a written record within three months.

    “The bill proposes changes that are pragmatic and aimed at giving employers and employees more certainty, fairness and flexibility,” Mr Bridges said.

    • NotForTurning

      Which part of Maggie’s great line: unions have no place in a modern economy don’t you understand? How had is that to do?

      Key should have brought in the Wisconsin laws and wiped out NZ’s remaining unions, all of em in the public sector, on election night.

      • johnbronkhorst

        One step at a time.
        Reduce the unions draconian power. Make them genuinely voluntary. Then the arseholes that have hijacked unions for decades, will have no power. and perhaps unions will then return to PROPER industrial bargaining with the worker’s genuine well being in mind. Which includes helping employers create business growth that produces more jobs!!!

        • NotForTurning

          Nope. Declare war and break them. Worked for Maggie. Worked in Wisconsin. Will work fine in NZ.

  • steve and monique

    Well,well,put the left in power,and they can even manage to fuck Australia. God save NZ.

  • NotForTurning

    Helen Clark’s government forecast a decade of deficits…National arrested that

    If only National had “arrested” that government, and jailed the lot, then actually undone their policies.

    As it is, National put up taxes, paid more bailouts, and did more social engineering than Hellen ever did. Remember how Hellen wouldn’t even attend Waitangi? While Hone Kii is there every year.

  • wikiriwhi

    The dollar is weak because of US investment bankers, the Federal reserve and the US military industrial complex. These are the conspiracy factors destroying the western world and making China dominate. I see Australia is committing to leaving the dollar and going onto the yuan. The US will totally destroy their economy as they have all others who turned to the Euro and planted central banks to control their economies. Only three countries now have no central bank. Nth Korea, Cuba and Iran. And guess what, the US is ready to invade Iran. Just check the Strait of Hormuz and the huge US naval flotilla outside Iran.

    Link to Oz turning to Yuan

    http://themadjewess.com/2013/04/27/collapse-on-its-way-australia-to-abandon-the-u-s-dollar-for-chinese-yuan/

  • wikiriwhi

    The whole world wide system is rigged. Expert says conspiracy theorists had it right all the time. They are vindicated. This from the man who exposed the Libor rating scandal (if you know what that is)

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