So who’ll take responsibility for this latest budget blowout, revealed by Treasurer Joe Hockey in the Mid-Year Economic and Fiscal Outlook this afternoon? Anyone? Hello …?
Much more importantly, will the current government accept responsibility for fixing it? And we mean really fixing it?
Australia’s economic performance remains superior to that of most of the rest of the developed world. But recovery from the global downturn remains sluggish. What Tony Abbott has actually inherited — the politics of debt and spending programs aside — is an ongoing structural balance problem with the budget. The Commonwealth is living beyond its means — Abbott also has the same poor nominal GDP growth that Labor faced and the same significant revenue shortfall. There are no easy fixes around the corner.
What Abbott and Hockey must start talking about — the Treasurer was still speaking at the Press Club as we hit deadline; Bernard Keane will dig into the numbers on the Crikey website later — is where the cash will come from. There will be cuts (probably not where they should be, like scaling back the government’s prohibitive parental leave scheme), but there needs to be more raised.
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The first 12 months of a new government — as free of campaigning as politics as ever gets — would be a great time to talk about tax reform. Maybe — the horror! — even looking at expanding the base of the GST.
Because there’s only so long Abbott can peg this on Labor. Eventually he’ll have to roll up his sleeves and do the serious work.