Before the last election, then-opposition MPs Tony Abbott and Joe Hockey could not have been more emphatic: “You don’t address debt and deficit with yet more debt and deficit.”
They returned to the same line well after the election.
But Abbott and Hockey have practised the exact opposite of what they preached. Two recent reports from Treasury and Finance show how much new debt the Abbott government has taken on — and how much more they want. The projection for this financial year is up more than 27% on the level set in Labor’s final budget. It seems likely that target will be exceeded.
The Finance Department’s monthly statements for July and August were released late Friday night, showing the extent of the debt:
- The government’s net debt projection for 2014-15 is $226.39 billion. That is an increase over last year’s target of $48.3 billion, or 27.1%. It is above last year’s actual outcome by $23.9 billion, or 11.8%
- In July this year, the debt increased from $202.46 to $208.15 billion;
- In August, the debt expanded further to $217.55 billion. That’s an additional $15 billion in two months, a rate of increase above 3.6% per month or 54% annually;
- Already, in two months, Hockey has borrowed 63% of the new borrowings he wants for the entire year; and
- The total interest bill for 2014-15 is forecast to be $14.7 billion. Last year, during which Labor managed the economy for only two months, it was $10.8 billion. The year before, which was all Labor’s management, the bill was $8.3 billion. So a 77% increase in interest payments in two years — if this year’s target is met.
Monthly reports from Finance for August, September, October and November last year all showed the forecast end of year net debt for 2013-14 at $178.10 billion. So that is the level for which Labor can fairly be held responsible.
That suddenly jumped in December, after various Labor budget measures had been abandoned, to $191.52 billion. That forecast level continued in the January, February, March and April 2014 reports. Then in May it shot up again to $197.85 billion.
Two weeks ago the final budget outcome revealed the actual debt at June 30, 2014: $202.46 billion, more than $24 billion — or 13.7% — higher than forecast had Labor continued.
So the total increase now — well, at the end of August anyway — above the level Labor left last year is $39.45 billion. Up an extraordinary 22.1% already.
Before the last election, the “debt disaster” was one of the most urgent issues facing the nation, if not the most. The ABC claimed the economy was the primary issue in the 2013 election campaign and that the “Coalition’s main line of attack on the economy is based on the mantra of ‘debt and deficit’”.
Yet since the election there has been no mention of borrowings whatsoever by most mainstream media. Not a clue from a Creighton, not the slightest from a Sloan and not a murmur from a Martin or a McCrann. Just a couple of reports in Independent Australia and one brief mention downpage in The Canberra Times.
Yet the rise in debt is actually quite significant. It could now almost be called “skyrocketing”, if not quite “spiralling out of control”.
“Interest rates in veracity will always be lower under a coalition government!”?
Good to see this article in Crikey, Alan.
High time someone informed the public of what is going on, since the MSM just seem to ignore the facts. The lies we are being told by this government are outrageous. When will the people WAKE UP!!
Keep up the good work in IA, Alan – I am an avid reader of your articles there.
Needs pictures.
Don’t blame poor Joe and Tony, it was, is and forever will be all Labour’s fault anyway…
What gets me is the ‘opposition’ must know this yet never call it. Never says boo about it in parliament. Crean and Beasley were the same. There were untold opportunities to put the blowtorch on Howard but they just didn’t get it. There is something genetically defective with the political class.