After 6 years of ducking and diving Wayne Swan has finally chosen to play the one card that he hasn’t up until today……the Credibility Card. Unlike normal pre-election budgets he has chosen not to go on a vote buying spending spree, but has finally admitted that the current Labor government has botched the economy.
We agree with their decision to slow down the spending, whilst not going into an austerity measure. The economy is too fragile to be cutting it back with any vigour.
Christine Milne of the Greens Party is still living in La La Land. She is accusing Labor of cutting back on spending, while saying she does not believe that the revenue figures are accurate. She is still trying to convince Australian voters that the Greens are a viable alternative to Labor. Her ideas for Australia would be take the economy into further deficit in order to carry out the Greens socialist plans.
Wayne Swan has, however, shown Tony Abbott the way he should go. It is time for Tony to be careful of his plans for the Maternity Scheme and to put all the “nice to haves” on hold until the economy has turned the corner.
According to the budget the deficit will shrink from $19.4 billion this year to $18 billion next year. This is not enough. Whoever is in Government needs to drop this figure by a further $2 billion at least. Growth is forecast at 2.75%, and this is as good a guess as any, but we would like to see some detailed plans on how we can grow the revenue. For example $4 billion is expected to come into the government coffers from tightening the tax rules to prevent multinationals shifting profits offshore. If the mining tax is anything to go by, then I am sure that the multinationals will be looking at ways not to pay this additional tax.
To put all of this in perspective, Labor forecast government debt at $145 billion and now forecast it to peak at $192 billion. This is a miscalculation of 32%. It doesn’t give us any confidence that they actually know what they are doing.
The asylum seeker budget has blown out by more than $3.2 billion since the February forecast. Minister O’Connor has admitted the record rate of boat arrivals “is not acceptable in terms of risks to human life, or the impact of the budget. Let us stop talking in terms of Political Correctness. Australia cannot afford to pay out these additional funds for asylum seekers, or we will be seeking asylum ourselves! We can get back into surplus far quicker if we cut the money that we are paying out to these illegals. Rise Up Australia Party will be releasing their policy on asylum seekers closer to the election, and it certainly won’t include huge payouts to them.
Most of the money raised by government comes from you, the taxpayer, or from the company you work for.
To make that a little clearer, if government want to spend more money on new projects, then they have to take it from you in the first place.
Let’s have a quick look at where the top 10 revenues come from. I have loosely broken the amounts between you and the company you work for
Individual Tax $175.4 Billion
Medicare Levy $ 10.3 Billion
Sales Tax $ 8.6 Billion
Petrol Tax $ 5.8 Billion
Tax on Super Funds $ 8.8 Billion
Capital Gains Tax $ 8.1 Billion
From You $217.0 Billion
Company Tax $ 74.0 Billion
Diesel Tax $ 8.9 Billion
Carbon Pricing $ 8.3 Billion
Customs Duty $ 8.8 Billion
From your Company $100.0 Billion
Budget figures from the Government website
2011-12 2012-13 2013-14
$b $b $b
Receipts 329.9 350.4 376.0
Per cent of GDP 22.4 23.0 23.5
Payments 371.0 367.3 391.2
Per cent of GDP 25.2 24.2 24.5
Based on the above figures the income is going up by $25.6 billion, and the deficit is only going to be $18.0 billion.
So, what’s the problem with this budget?
The problem is that government wants to spend an additional $23.9 billion.
The way to balance the budget is to spend less, or to raise taxes. Wayne Swan chooses to do neither. He would rather rack up another $18.0 billion of debt for the economy. We realise that politicians are always reluctant to increase taxes, particularly in an election year. However, the 0,5% increase in the Medicare levy went through with barely a hint of opposition.
Perhaps it is time to ask the voters if they are happy with the way that their money is being spent?
This September Vote 1 Rise Up Australia Party!