The problem with Scott Morrison’s insistence that Australia doesn’t have a revenue problem but a spending problem is that he is doing nothing about either.
The savings measures announced in yesterday’s Mid-Year Economic and Fiscal Outlook merely offset additional spending announced since the budget, meaning that the government is still on track to spend nearly 26% of GDP this year. In 2018-19, it will still be spending over 25% of GDP — well above the average since 2001 of around 24.6%.
Regardless of whether Morrison wants to accept the reality of the government’s revenue problem, that level of spending is unsustainable and will require hard, unpopular decisions to reduce it over the medium term. Announcing yet another welfare crackdown (governments have been announcing them since the Hawke years) or slashing arts funding won’t cut it, nor will keeping a lid on the growth of existing programs.
A key challenge for Malcolm Turnbull and Morrison will be to effectively make the case to the electorate for significant cuts over coming years, which means addressing concerns about fairness and not being seen to disproportionately target low-income earners, which undermined Joe Hockey’s 2014 budget. It also means Labor, which deserves credit for putting revenue measures on the table, must also accept greater responsibility for supporting politically contentious savings.
Labor in power, of course, got no such support from Tony Abbott or Joe Hockey. But they’re now gone. A responsible plan to significantly lower spending over the medium term deserves bipartisan support.
This government has earned and deserves the same sort of support they gave Labor – nothing more, nothing less.
At what point did Crikey join the ‘slash & burn’ club?
We do have a spending problem but only in the sense that the government are spending money they are not prepared to fund, i.e. we have a revenue problem.
The savings measures announced in yesterday’s Mid-Year Economic and Fiscal Outlook merely offset additional spending announced since the budget, meaning that the government is still on track to spend nearly 26% of GDP this year. In 2018-19, it will still be spending over 25% of GDP — well above the average since 2001 of around 24.6%.
Why are we measuring since 2001 ?
What’s the average since, say, Federation ?
Fine non sequitor there , “<IRegardless of whether Morrison wants to accept the reality of the government’s revenue problem, that level of spending is unsustainable” worthy of any RWNJ (hi OneHand!)- if the revenue were increased there would not be a spending problem. Q.bloody E.D.
On tuther hand, reductions of spending totalling many billions could be made simply by reducing idiot schemes like private health subsidies, super rips-offs, before we even take a run-up at the biggies such as diesel excise.
AR another cut spending is to stop gifting taxpayer funds to polluters to pollute less. Bring in a carbon tax to replace the current system. Tax = income