The latest budget update from Peter Costello once again confirms the Treasurer is an accounting rorter of the first order as he gets away with remarkable fiddles that are against the law for private companies.
One of the government’s most important weapons against the opposition is the claim that it has “paid off Labor’s $96 billion debt”.
Have a look at the net debt and net worth page from yesterday’s update and you’ll see that forecast net debt as at 30 June 2007 has actually blown out from $22.1 billion to $28.1 billion.
Then you have the government’s refusal to properly fund its own superannuation liabilities through the budget. The 2006-07 superannuation expense for public service super is only $2.57 billion and this rises to just $2.67 billion in 2007-08.
Compare that with the following projections on public service superannuation liabilities:
2006-07: $101.3 billion
2007-08: $104.74 billion
2008-09: $108.3 billion
2009-10: $111.94 billion
Costello argues that he set up the Future Fund this year to plug the superannuation liability. However, he should have been properly funding superannuation from the day he became Treasurer. Instead, the unfunded liability blew out from $69 billion to $98 billion over his first ten years, which means his budget surpluses were over-stated by $29 billion over that period.
Standing still on super would have required a budget item of about $7 billion a year. Instead, the government grossly underfunded super and then grandiosely claimed exaggerated budget surpluses are being transferred across to the Future Fund, along with a 17% stake in Telstra.
However, rather than the Future Fund pouring its earnings straight into reducing its superannuation liability, the government is taking the earnings back into the budget.
Indeed, the forecast 2006-07 Future Fund budget contribution was yesterday increased from $1.8 billion to $2.2 billion and the 2007-08 forecast rose from $2 billion to $3.1 billion – almost 40% of the overall budget surplus.
This money should simply remain in the Future Fund rather than artificially inflating the claimed election year surplus before finishing up back where it started.
ASIC would be all over Woolworths if it refused to pay for staff super, lifted its profit by $2 billion and then claimed a special $2 billion dividend would be going to the Woolies super fund. That’s what Peter Costello is getting away with and nobody says boo about it.