MT is rolling out the debt truck:
Gillard takes issue with the message:
Ms Gillard said the global recession had punched a $210 billion hole in commonwealth revenues. She challenged Mr Turnbull to nominate what areas he would cut to make up for the shortfall if he did not support borrowing.
The basic claim made by the government is that the collapse in revenue has driven the budget into deficit, not spending. Even a cursory look at the ABS’s Government Finance figures reveals that this is not the case. Taxation revenue for the March Qtr was $64.5 billion, which while lower than in the December Qtr, was still higher than what it was in the September Qtr for FY08/09 by around $4 billion, see Cat. No. 5519.0.55.001 Government Finance Statistics, Australia – March Quarter 2009, Table 3. Commonwealth Government, Operating Statement – General Government. Given that the economy has avoided a technical recession – something Rudd claimed credit for even though it was due to trade – and that unemployment is still below 6 per cent, one should not expect a significant contraction in taxation revenue over the next four years. The reason the budget is and will be in deficit in years to come is due to $133 billion in new and unfunded spending measures and Rudd’s desire to put a straight jacket on the Australian economy with his Emissions (Employment) Trading (Termination) Scheme.
In terms of savings measures, I’ve previously proposed a range of ideas. Abolishing the ETS would save the Federal finances $2 billion a year and rising, privatising the ABC and SBS around $1.5 billion a year, getting rid of the Human Rights Commission – another $20 million a year and putting an immediate hold on the National Broadband Network would save at least $43 billion in total and likely higher when the system begins operating at a loss. So that’s multi-billions saved right from the top of my head.