How safe is the surplus?

Andrew says:

12:26pm | 09/05/12

I don’t trust either party. Both are playing the same game and both would be acting the same way if situations were reversed.

Doh says:

01:02pm | 09/05/12

No one trusts the government, that ended the day Gillard announced the Carbon Tax backflip.

Think about it, would Gillard have been forced to cling to Thomson, make the deal with Slipper or dump Wilkie if she had not backflipped on the Carbon Tax?  Had she not done so, she could have sacked Thomson as soon as the allegations came to light without the risk of losing the seat to the LNP.  There would ahve been no need to steal Slipper and she could have made good on some of the Wilkie reforms.

Gillard’s and Labor’s current predicament is entirely of their own making.

nihonin says:

01:28pm | 09/05/12

Yes Andrew, Tony Abbott and the Liberals will be just as bad as Labor, as he and the party have been in government since 2007, apparently.

planko says:

03:14pm | 09/05/12

There is nothing self serving about this government they have done what needed to be done regardless of how unpopular.The Gillard/Rudd LABOR GOVERNMENT
They have stimulated the economy when it was needed.
Given us mining tax that is needed.
Given us carbon tax that is needed.
Given us the NBN that is needed.
Liberals can jump up and down all they like but it is because of the stimulus from the current government that the RBA has the powder still left in the keg. If Labor had not provided stimulus our current cash rates would already be at 0.5 to 1.5 and we would have no room to move. The stimulus provided needed to be provided quickly and in a way that provided stimulus across the nation. Not just in key locations. Not on massive projects that would not have still not have started yet. We stayed out of technical recession because of quick decisive action from the LABOR GOVERNMENT.
People please realise Abbott, Pyne and Hockey have no answers for you. They would have done none of these things and in reality we need/ed all of them.

wolf says:

03:54pm | 09/05/12

I love how I’m called either a communist or a liberal for expressing an opinion.  Thanks Planko.
Please explain how the carbon tax in it’s diluted form will assist in the takeup of renewable energy. Please also explain how the governments commitment to ‘green’ causes did not extend to the green buildings program which was axed in the budget to deliver a ‘surplus’.
Also, whilst I do agree with the idea of an NBN I dont trust anyone in the federal labor party to implement it without screwing the whole thing up.  In fact with one exception I wouldn’t trust them to arrange a f**k in a brothel.

planko says:

04:03pm | 09/05/12

Tell where I said you were either ?

planko says:

04:06pm | 09/05/12

Wolf I believe there is guy on cross benches from the Central Coast that can organise a root in a brothel

Steve says:

06:55pm | 09/05/12

.....does anyone actually TRUST this government anymore?

The question should be “Who would you trust in a mafiacracy ?”
or ” Who can you trust in our mafiacracy in which lies and frauds are supreme?”

Vince says:

04:09pm | 09/05/12

Yes, and we know which government presided over the creation of that dirty little secret.

The Mad Monk says:

12:13pm | 09/05/12

And the Liberals DNA is selling off assets and not spending a dime on infrastructure. But they are great at providing a surplus by selling off assets. They are also very good and providing middle income welfare just like the current government. Both the Liberals and Labor are very similar both run by fools.

Hockey13 says:

12:20pm | 09/05/12

Over taxing, selling public assets and hoarding instead of investing in nation building infrastructure is in the Liberals DNA.
They cannot and will not be able to help themselves should we be unfortunate enough to be inflicted with a conservative government.

How on earth are they going to look good when they have already sold off our assets, our gold and intend to splash out 75,000 dollars for working mums dropping one of the litter whilst giving the rich tax breaks?
Anybody?

RyaN says:

12:47pm | 09/05/12

The only reason they have to sell off those assets is to pay for the debt that the successive Labor governments continue to run up. Someone responsible has to pay the bill eventually.

Bomb78 says:

01:03pm | 09/05/12

The Mad Monk & Hockey13: I’m confused over Liberals and asset sales. Can you explain to me who sold off Qantas, the Commonwealth Bank, ANL, the Government car fleet?
We just booted an ALP government in Queensland - you know, the one that sold off Queensland Motorways, The Port of Brisbane Authority, Forestry Plantations Queensland, Abbot Point Coal Terminal, and the golden egg laying goose QR National. And I’m pretty sure the NSW ALP also burned a premier for his attempts to privatise electricity assets.
Yep, the Liberal party needs to loosen up a little on infrastructure - but once again it’s going to take a decade or more to get rid on the debt it will inherit when it takes government next year. If the ALP had something, anything, to show for the $300 billion in debt it’s going to leave behind we could argue the merits of its spending programs! I’d rather have no debt and failing infrastructure, than heaps of debt and failing infrastructure.

Doh says:

01:05pm | 09/05/12

@The Mad Monk

If you are so upset about the state of infrastructure in Australia you are angry at the wrong people.  You should be aiming your angst at the State ALP governments of the past decade in NSW, VIC and QLD.

The Mad Monk says:

01:17pm | 09/05/12

Doh I’m angry at both sides government of both State and Federal. Both have let this country down just like the current government both Federally in Labor and the Liberals in the state NSW. They are run by people who are lifelong politicians who don’t have to worry about their futures as we will be paying for them for the rest of their lives. Politicians are parasites in Australia and most parts of the world.

The Mad Monk says:

01:21pm | 09/05/12

Bomb78. You are correct but instead of spending that money they did save on building nothing was given to middle income families to buy votes. I dont thinkeither Julia Gillard or Tony Abbott are fit to run this country.

Denny says:

01:23pm | 09/05/12

TMM and Hockey13 are right to an extent. It is going to be much much harder to pay back labor’s wasteful debt this time around and it will probably be double the $96billion that Hawke and Keating left behind.

at least when Costello sold the assets he created the future fund to place the proceeds. When Keating sold the CBA he just wasted the money and still left a huge debt. Maybe id Swan was going to direct the proceeds of the mining tax towards the future fund or some other similar interest then he would have some credibility. As it is he is just wasting it, running up more debt, and has no plan to pay the debt back.

I suppose that it wont be their problem soon so they dont care what damage they have done and are doing to the nation.

Denny says:

01:23pm | 09/05/12

TMM and Hockey13 are right to an extent. It is going to be much much harder to pay back labor’s wasteful debt this time around and it will probably be double the $96billion that Hawke and Keating left behind.

at least when Costello sold the assets he created the future fund to place the proceeds. When Keating sold the CBA he just wasted the money and still left a huge debt. Maybe id Swan was going to direct the proceeds of the mining tax towards the future fund or some other similar interest then he would have some credibility. As it is he is just wasting it, running up more debt, and has no plan to pay the debt back.

I suppose that it wont be their problem soon so they dont care what damage they have done and are doing to the nation.

Little Joe says:

02:25pm | 09/05/12

@ The Mad Monk

Let’s just forget that the ALP’s Election Budget in 2010 promised a National Debt of $90B at the end of the 2011-12 Financial Year. It is now budgeted at more then $140B. Just because the media refuse to publish these figures doesn’t change the fact that in approximately 18-months the ALP has missed the budget forecast by over $50B.

As for the surplus ...... it doesn’t exist!!!! It’s just a little imaginative accounting for the financially illiterate. Headline Cash Balance is budgeted for -$8.7B. As a result Australia’s debt is budgeted to grow and Australia’s Liabilities are budgeted to exceed $500B.

Those idiotic Labor MP’s love conning the ignorant. They just love their little media speaches and are fully aware that stupid lazy journalists will simply regurgitate what is said.

Yes Deceit, Neglect and Apathy is Labor’s DNA.

@ Bomb78 ..... you forgot to mention that the Queensland State Labor Government sold off the Electricity Assets .... after running them to the ground .... and, if it wasn’t for John Howard, the State Labor Governments would have sold off the Snowy Hydro System.

planko says:

03:33pm | 09/05/12

Little Joe plaease tell me who is ignorant ..... YOU. The PM does not forcast treasury does. The government were not out by 50Billion we were.Did you send your cheques back no…  They will be the same people that Hockey uses to forcast when you get your man !!

craig2 says:

09:29pm | 09/05/12

TMM and Hockey13 are both the same and one, your posts are too closely linked and the Kevin07 post is really who you are. Don’t know what your game is mate but it’s a piss-take of a stance you’re adopting.

planko says:

02:24pm | 09/05/12

Liberal’s gave us this structual deficit with constant tax unnecessary tax cuts during the boom times. I really wish John Howard threw your kids over board as you genre pool is getting shallow.

planko says:

02:30pm | 09/05/12

Bev first point hell does not exist. It is FORECAST by greater minds than you. It is done by economists at treasury dept not by Swan or Gillard. It will the same people doing those figures when you vote in Hockey A Northshore Real Estate agent to control the economy.

Andye says:

12:26pm | 09/05/12

Huh? Did you just make that up?

Peter says:

12:40pm | 09/05/12

The liberal parties PPL scheme, it proposes to raise the company tax rate by 1.5% to pay for it.

Luke says:

01:38pm | 09/05/12

Peter, that is not a tax hike. It is a “levy”.

Hank says:

01:43pm | 09/05/12

Hah!  Peter’s the new persephone!

me my mo says:

02:07pm | 09/05/12

Abbott can say he wont introduce it then introduce it once in government if it helps.

james says:

02:37pm | 09/05/12

Great big new tax! Thanks Tony you are the best! Bring on the election!

Luke says:

01:59pm | 09/05/12

“Tony Abbott is of course 100% correct”

Hmmm. You sound impartial. Do you have a newsletter I might read?

RYAN IS A GOOSE says:

02:21pm | 09/05/12

I guess they really did throw kids overboard and next time I am in Woolies I won’t pay the GST.

Thirsty says:

02:24pm | 09/05/12

@RyaN
The credit limit is for the issuance of government bonds. Treasury, econimists, RBA, the Banks, you know, the people that know about money stuff, all say that government bonds should be around 12 to 14% of GDP. (guess what, bonds were around this level when Costello was the Treasurer with “zero debt…)
So if our economy grows (which it has for 21 straight years), to keep the bond market at the correct level, then it has to be increased.
Now I know this complicated stuff is too hard for the LNP to understand, but hopefully, I have explained in simply enough for you
Just a final thing, deficit and debt are completely different animals…you can have a surplus, but still go into debt. Its just like saving $100 a week out of your pay (you are in surplus…), but you go out and borrow $400,000 to buy a house (you are in debt…)

RyaN says:

04:24pm | 09/05/12

@Thirsty: you don’t say, wow I never knew any of that money stuff.

Thirsty says:

04:38pm | 09/05/12

@RyaN
If you knew about that money stuff, WTF did you ask the question about why Swanny is increasing the debt ceiling??
Your entire post is just plain bullshit if you knew about money stuff
Please let us all know what you were trying to get at then, because all I can think of is that you are a goose (thanks RYANISAGOOSE @ 2.21…)

RyaN says:

05:17pm | 09/05/12

@Thirsty: How about you just come and talk to me whey you have actually delivered that surplus then we can talk about the debt that needs to be paid off AGAIN more than likely by the Liberal Party AGAIN.

esteban says:

06:28pm | 09/05/12

Thirsty. Your post at 2.24 is alarming to me especially about the bond level being the correct level at 12 - 14% of GDP and needing to grow as the economy grows.

How many people like you are out there? You are the goose I am afraid.

bonds are how the Govt borrows money. Why do we need to get it up to 12% of GDP.

Virtually all our Govt debt (bonds) has come about due to Wayne Swann’s first 4 budgets. The 4 deficits from those budgets added up to about $175 billion. next year if he gets his first surplus he can repay $1.5 billion of that $175 billion before vacating his office. Yippee.

I don’t believe that bonds averaged 12% of GDP during Costello’s time. Perhaps when he started after inheriting Keating’s $100 billion dollar debt but he finished in net credit.

The reason they talk about net debt is because these bonds are over 10 years so you can only pay them back when they mature. Costello had so many surplusses that he held the money in reserve to retire the debt when it matured.

Perhaps economic commentators say that 12 - 14% debt to GDP is the maximum you can expect an economy to repay within an economic cycle.

I say within an economic cycle because you don’t want any residual debt when the economy turns again for the worse and deficits are called for again.

Our debt will, according to Swann, peak at just under 10% od GDP before the surplusses can strat to reduce debt.

Swann is forecasting the next 4 years to be surplusses adding up to $16 billion. Compare that to the deficits of $175 billion from his first 4 budgets and you will see that elimination of net debt is a long way away.

Thank goodness we are not at the “right” level of 12% that you talk about.

Christhetreasurerdoesnotpredictthisdopeytreasurydo says:

02:19pm | 09/05/12

I hope he is 100% out that would mean a 3 Billion dollar surplus.

Just a small this is a treasury estimate….

Thirsty says:

03:14pm | 09/05/12

@Chris
Australia has a $1.56 Trillon economy, so if Swanny was $20 Billion out, thats an error of 1.2%, or in other words, getting it wrong by $1.20 in each $100
Not too bad by my reckoning when your guessing

TeeJay says:

03:35pm | 09/05/12

@Thirsty
If Australia has a $1.56 Trillion economy, a $1.5b surplus isn’t even pocket change - it’s more like the lint in that tiny little corner of folded cotton at the bottom of your pocket. And if he’s managed to be $20b shy of predicting last year’s overspend, then I hold just about the same percentage of faith that they will successfully deliver this $1.5b surplus.

Thirsty says:

04:03pm | 09/05/12

@TeeJay
Correct on all counts
What I was trying to explain, obviously very badly, is that Swanny wasnt out 100%, he was out 1%
And just to be clear, he wasnt $20B out on overspend, he was $7B out on spending, but $13B out on income
And also, there is just the same amount chance he could be out on the upside this year, so a $1.5B surplus could easily be $20B this time next year…Costello got it wrong EVERY year when he was money bags, but everyone seems to forget this

Walter says:

01:27pm | 09/05/12

Rick, if this current government was in Switzerland, it would have been booted out as soon as it flip floped on the Carbon Tax in Feb 11. You see, in Switzerland the people have the power to remove a government (forcing an election) at any time….That is what I call Democracy.

Nick says:

02:08pm | 09/05/12

Rick 100% CORRECT in your statement, if we want to move forward it is with a true system of democracy a la Switzerland or DIRECT DEMOCRACY that we will able to keep our standard of living.

Unfortunately it is the absolute power of the political parties and their cronies “the faceless do-gooders politically correct nuts fascists” who are ruling and direct democracy is the way to silence them once and for all or the road to hell will only get worse by the day.

The question is : Who is willing to have a political party with direct democracy as its main policy???? and of course
how many australian will vote for it?

fml says:

02:14pm | 09/05/12

Yes, But they do not take part in armed foreign conflicts, so they have the money to do so.

fml says:

02:37pm | 09/05/12

What i find weird is that people think that the policy they follow somehow will always have a majority….

“the faceless do-gooders politically correct nuts fascists” What if they are the majority?

planko says:

02:41pm | 09/05/12

If the current government was in Switzerland they would be the Swiss government not ours.

Bitten says:

01:49pm | 09/05/12

I agree. I think the revenue assumptions are equally at risk. The past 4 years of actual deficit can be attributed to not only reduced growth but associated reduced tax receipts that apparently no-one in Treasury bothered to point out to the Government until the deficit predictions were well and truly up the shiznet.

planko says:

02:34pm | 09/05/12

Joan it was a treasury estimate last year and so is this !!! Gillard and Swan have nothing to do with the guesstimate. Guess what when you voted in a real estate agent from the North Shore of Sydney (Hockey) he will use the same people !!! Joan please open ears then talk.

planko says:

02:38pm | 09/05/12

They are not figures they are forcasts !!!

planko says:

03:11pm | 09/05/12

Jess considering we only have one PM the worst and the best is the same person. How did the budget miss the mark ? Was there a mark to aim for ? Mark Latham is a mark they missed him !!!

nihonin says:

04:25pm | 09/05/12

planko says:

  03:11pm | 09/05/12

  Jess considering we only have one PM the worst and the best is the same person. How did the budget miss the mark ? Was there a mark to aim for ? Mark Latham is a mark they missed him !!!

No Labor put him up as leader, Australia was lucky to have near missed him.