There are lies, damn lies and statistics.
And in the coverage of Wayne Swan’s first budget, there were some wild disparities in the figures, none bigger than the $100 billion discrepancy between what readers of Crikey and The Australian were told.
This is what I wrote yesterday:
Now Labor has turned off the tap on the Future Fund, leaving a $50 billion unfunded super liability, $50 billion in standard government debt and a government still not really worth anything despite this apparent avalanche of record surpluses and burgeoning special purpose capital funds.
And this is what George Megalogenis told readers of The Australian:
Peter Costello’s Future Fund is full … Mr Swan is the first treasurer in history with no commonwealth debt to cover. There is no borrowing to pay off, or public service super liability to meet.
This page from Budget Paper No 1 shows that unfunded federal superannuation liabilities are projected to be $108.11 billion at the end of next month, rising to $112.12 billion by June 2009.
If the Future Fund really is full, why does its website home page talk about having assets of only $59.6 billion. Presumably this means the unfunded component is still $48.4 billion, unless there is another $50 billion of unallocated cash sitting around.
On government debt, this page from the budget reveals that there will be $49.6 billion of outstanding bonds by the end of 2008-09.
I emailed Megalogenis the following yesterday but haven’t received a response yet:
Am I missing something here as I reckon that’s $100 billion of debt and unfunded super and you’re saying there is none. I just can’t find the $160 billion of cash or liquid assets on the government’s balance that would be required to say there is no liabilities on a net basis either.
The Australian followed up in its budget editorial today by repeating the Megalogenis line as follows:
The investment funds are made possible because of former treasurer Peter Costello’s success in eliminating commonwealth debt and fully funding the superannuation entitlements of federal public servants through the Future Fund.
Rather than super being fully funded, the liability predictions are actually getting worse. This is what the last three budgets have said about the size of the liability at the end of 2008-09:
2006 Budget: $106.8 billion
2007 Budget: $110.26 billion
2008 budget: $112.12 billion
Isn’t the real story here a blowout in super liabilities, which will require even more contributions to the Future Fund, rather than turning off the tap barely half-way to making it fully funded and instead going on a “nation building” spending binge?
Check out this video from the budget lock-up security fiasco