Government Plans to Speed up Return to Surplus but Budget will Barely Touch $684 Billion ‘Debt Crisis’
THE “debt crisis” the Coalition government screamed warnings about when it came to office five years ago won’t be eliminated by tonight’s Budget.
In fact the economic statement will barely nibble at the shortfall which has grown to over half a trillion dollars.
“The ‘debt and deficit disaster’ seems to have evaporated in their mind,” Labor front bencher Tony Burke scoffed today on ABC radio.
The Budget will feature a speeded-up move to a surplus using increased tax revenue from a growing economy but will also offer tax cuts to limit that revenue improvement.
In 2013 overall debt was $257 billion and has now come close to triple that to $684 billion and the equivalent of roughly 50 per cent of the nation’s annual output, the gross domestic product.
That rates as good-to-middle when compared to many other countries but remains a worry.
The only way to reduce that tally — and the huge interest bill that accompanies it — is to use surpluses delivered in the annual Budget, and the Government insists it is on track to do that.
But former Liberal Treasurer Peter Costello points to a problem: Taxes are to be limited to 23.9 per cent of GDP but spending appears set to stay at 25 per cent. That was no way to reduce debt.
“You and I will die before that happens,” he told ABC TV last night.
“We went from having no net debt to borrowing about $370 billion. That money doesn’t go away.”
The Government says it has a plan and Treasurer Scott Morrison says it will begin earlier than scheduled.
A return to surplus was due to have appeared in 2020 but we will now see the Budget in the black by 2019, the Treasurer has indicated.
That will be seen as good news by most taxpayers who are carrying the interest cost on debt incurred before many of them started to vote.
And Finance Minister Mathias Cormann says: “We are now on a path back to surplus. When we get back into surplus we will of course be paying down debt.”
Courtesy : news.com.au
Photo : The Shovel
[social_warfare buttons=”Facebook,Pinterest,LinkedIn,Twitter,Total”]
