Peter Costello, Treasurer: 12 budgets, 10 surpluses. The two deficits added to all of just $7bn, the surpluses added to $107bn.
The net $100bn rather neatly paid off the $95bn of inherited Keating debt.
Swan got to start with zero net federal debt. His successor won't.
Indeed, Paul Keating, Treasurer, temporary brooding backbencher and prime minister: 13 budgets, 10 deficits, adding to that $95bn figure.
Just three budget surpluses, in 13 years, adding to just $13bn.
And if truth be known, those surpluses owed more to the irascible "old-style, salt of the earth" Labor finance minister of those few years, Peter Walsh.
So the modern Labor record is just three surpluses in 18 budgets. For a total net deficit of $256bn and still counting. Interrupted by Costello and his 10 surpluses and $100bn in debt repayments.
Now true, in the dim dark days BK (Before Keating), Malcolm Fraser and for most of his prime ministership, the (very) youthful treasurer John Howard, recorded six deficits in seven years.
Those deficits (under modern revised Treasury accounting) added up to $18bn. There was just one Fraser-Howard surplus, on the reworked figures, and a tiny $348 million at that.
But whichever way you do the comparison, Labor treasurers do not emerge with fiscal glory.
Keating-Swan: 15 out of 18 budgets in deficit adding to a net $256bn of red ink. Fraser-Howard-Costello: 11 out of 19 budgets in surplus adding to a net $82bn of black ink.
With Costello, presumably, likely to require me to apologise for "sticking him" with Howard twice, so to speak, by way of this comparison.
"Can I just have responsibility for my budgets? And the efforts I had to make to fight off those around the Howard cabinet table wanting to spend?"
With a little bit of help, I'm sure Costello would concede, from finance minister Nick Minchin. And a lot of help from being able to make politically popular tax cuts -- something that the commentariat never understood, far less in its generic collectivist-Keynesian mindset, and could see only as fiscal profligacy.
Now it's possible that these very different records are just a matter of pure happenstance.
That Labor treasurers just had the bad luck to be in power when the economic sun clouded over, or the heavens opened up and the hard rain came bucketing down. Keating got the 1990 recession. Swan got the global financial crisis.
But then Costello had to take us through the Asian financial crisis and the economic impact of 9/11, to say nothing of the defence spending it and other issues like East Timor initiated. And he did so, with just one single deficit, of just $1bn, after the bigger one in his first year.
Costello did get lucky by being mugged by the China boom. And he got doubly lucky, by not appreciating just how massive it was going to be, so he -- and more, his cabinet colleagues -- did not set about lustily spending the anticipated manna from the Middle Kingdom heaven, quite as much as they could have.
The exact opposite has been the case with Swan and his cabinet colleagues. They've tended to factor in the peak revenues of the boom, and spent them in anticipation of never-ending continuation.
They have then wanted to be praised for the frugality of -- just promising to -- cap the overblown expenditure levels. And then being surprised when revenues fade and they remain in deficit.
The figures speak for themselves. Over the 12 years he was treasurer, Costello presided over a $135bn increase in annual budget outlays. In just six years, Swan will have presided over an increase of $115bn.
Six years? But there've only been five Swan budgets so far?
Well, I've taken the numbers out to the 2013-14 year. Why? Because of the way the 2012-13 numbers were so massaged and fiddled to try to get that promised surplus, at least on Treasury paper, so to speak.
To have any belief in the 2012 budget, and its promised surplus, you had to believe that actual budget revenues were genuinely going to fall $7bn this year -- the first time since the 1960s that's happened -- only to then leap by $23bn next year.
In 40 years of looking at dodgy budgets, if ever there was a flashing neon sign over the dodgiest of all -- Paul would have been envious -- this was it.
Now interestingly the Costello spending increase averaged 6 per cent a year; and the Swan increase has also averaged 6 per cent a year. So they're equally profligate?
There are two big differences. Costello had the money (and then some) to spend. Swan did not.
But much more damningly, the Swan increases came of course on top of the Costello ones. Yes, we had the -- arguably justifiable -- huge GFC spending. But while Swan has managed to reduce the rate of increase in subsequent spending, he's still spending at the hugely inflated level of that GFC spending. Which was supposed to be an emergency and so temporary spend.
Bob Hawke and Paul Keating came to government in 1983 absolutely determined not to be Whitlam Mark II; to go down in a screaming morass of incompetence and fiscal profligacy. That was the path to one-term government and personal oblivion.
In turn, Wayne Swan and to a lesser extent Kevin Rudd came to government in 2007 with a mindset somewhat short of a determination not to be (late) Keating Mark II.
The absolute measure of that was the budget bottom line. Starting with those huge deficits, hence the almost maniacal, absolutely unqualified "promise".
But the inherent fiscal Labor DNA revealed in these budget realities simply could not be denied. A Treasurer doggedly wishing to prove a Labor government could balance the books has emphatically announced the exact opposite.
"There will be no budget deficit in 2012-13 under a government I lead." The promise was deliberately made for the most basic of political reasons.
For more than year the government has done everything it dishonestly could to conceal the fact it would be broken. As it always would, not at core because revenues have weakened, but because it's in the fiscal DNA.
In yet another exercise in mendacity, Swan has only come clean in the political "off-season". If he had any honesty in him, he would deliver a second mid-year budget update in the first week parliament comes back, to tell us what the numbers are really going to be.
At least, that is, as this debauched Treasury can estimate them.
Budget deficits are in Labor's fiscal DNA
No comments:
Post a Comment