Scott Morrison today confirmed that the Turnbull Government has given up on putting forward a strategy to pay down debt
This commitment has been gradually downgraded from being the centrepiece of the Abbott Government in 2013 and 2014 – in fact it was a solid commitment to reach a surplus of 1 per cent of GDP by 2023-24 – to now being an afterthought or “as soon as possible.”
The Liberal Party has gone from prophesising a ‘debt and deficit disaster’ not that long ago, to government debt never rating a mention by the Government’s senior economic ministers.
Mr Morrison had the blooper reel in fine form today, forgetting the Prime Minister’s public protestations that the federal election would be held mid next year, stating: “at this election there is a clear choice” – they call that coming off a long run up.
Mr Morrison was asked today:
JOURNALIST: Will you be sticking by your commitment that has been ongoing for budget surpluses of at least 1 per cent of GDP in the medium term?
MORRISON: Well, the trajectory of the Budget over the medium term is set out every year and it will be again this year. That trajectory will also be conditioned by ensuring taxes do not rise more than 23.9 per cent of the economy. This is a very important point
This was exactly what is assumed in the last Budget papers [MYEFO 2017-18] where the Government projects small surpluses over the medium-term barely reaching 0.5 per cent of GDP - alongside mounting gross debt that reaches over $684 billion by the end of the medium-term, with no peak in sight
Based on last year’s Mid-Year Economic and Fiscal Outlook, they never get to a surplus of 1 per cent of GDP.
And this Budget looks to be a continuation of this Budget non-repair strategy.
At a time when the global economy has picked up, the Government’s Budget repair strategy has fallen over.
As Chris Richardson says “the rivers of gold are running again” and yet we are set to see another Budget where a 1 per cent of GDP surplus will be nowhere to be seen.
This Treasurer and the Turnbull Government have waved the white flag on Budget repair and seems content to leave a debt and interest bill for future generations to pay off instead of addressing some of the long-term structural budget problems.