Wong, wrong … Swan, goosed

I just heard Finance Minister Penny Wong being interviewed on ‘her’ ABC by Labor shill Fran Kelly. The balderdash and spin was off the Richter scale, yet Kelly just let Wong get away with it as usual. The biggest baldfaced lie was that, and I paraphrase here, “No economist predicted such an income shortfall and slowdown in the economy as we have had in recent years.” I nearly ran off the road.

I guess that’s what happens when the blind lead the blind. There is no one in Labor that has ever managed or ran a business of any sort. Oh, except maybe Peter Garrett when he was the front man for the band “Midnight Oil”.

Catallaxy Files, a blog made up of economists has said no such thing. They have been close to 100% correct on all their columns on finance and the budget, predicting the current state of affairs with unnerving accuracy. Yesterday Samuel J posted this: A tale of (mis)forecasting

Read it all but this excerpt is worth a second look:

[…] My take on all of this: the Rudd and Gillard governments have been a traditional Labor tax and spend government. They have not had a large revenue shortfall – indeed revenue has increased. Their forecasting has been pathetic as is shown by the large parameter variations. But there is no doubt that the Gillard Government is enjoying more revenue (in real terms) than any other Australian government in history. Its trouble, and the reason the Budget is in deep deficit, is that it – the Gillard Government – cannot cut its spending cloth to meet its revenue.

It has gone about the business of government by assuming revenue would increase much more than it actually has and has spent that fictiuous revenue.

In a business, this would be called gross mismanagement and cause for the CEO and executives to be sacked. It is like a CEO thinking that sales would increase five fold when it only increases two-fold. On the basis of that false premise, the CEO decides to spend a large amount on a massive factory expansion, only to find that most of his equipment lies idle.

The budget is in deep structural and actual deficit because of the gross incompetence and mismanagement of the Rudd and Gillard governments. They were left with a strong budget position which they have squandered. If the Rudd and Gillard governments had acted responsibly, the budget would be in structural surplus and probably in actual surplus. But in any case, it would be in a considerably stronger position that it is today.

With apologies to Sir Winston, never before in the course of human history has so much been spent for so little on so few. […]

The spin from Gillard, Wong and Swan on the economy, just goes from ridiculous to absurd. Economics Professor, Sinclair Davidson: Swan’s rivers of gold

The Australian is reporting that the government will announce today that revenue this financial year will be $12 billion down on forecasts last October (i.e. the MYEFO).

In a speech in Canberra today, Ms Gillard will reveal that tax revenue forecasts will continue to slip for the rest of this financial year, leaving tax revenue growing more slowly this year than had been forecast.

On today’s update, federal tax revenue will be about $340bn in 2012-13, down from the forecast of $352bn last October but up about 7 per cent on tax revenue in 2011-12 of $316.8bn.

“The bottom line for the budget bottom line is this: the amount of tax revenue the government has collected so far this financial year is already $7.5bn less than was forecast last October,” the Prime Minister will say.

“Treasury now estimates that this reduction will increase to around $12bn by the end of the financial year.

“This unusually low revenue, which wasn’t forecast even a few months ago, creates a significant fiscal gap over the budget period.”

On Twitter Adam Creighton is sceptical:

Revenues are not “unusually low” when they are still growing 7% a year; rather, foolish spending and forecasting.

Anyway, I thought I’d update the graphic of revenue over the Howard era and Rudd/Gillard era.

Latest Receipts April 2013

I’ve calculated this figure by reducing the MYEFO receipts figure by $12 billion. I’m not sure where the numbers reported in the Australian come from.

On today’s update, federal tax revenue will be about $340bn in 2012-13, down from the forecast of $352bn last October but up about 7 per cent on tax revenue in 2011-12 of $316.8bn.

In October last year the MYEFO was reporting an expected $339 billion in tax receipts and $28 billion for the 2012-13 financial year.

Written by Sinclair Davidson

Andrew Bolt adds a whole lot more here: There will be more taxes under a government I lead and Gillard’s latest mega-debt:  out of money, out of excuses

image: the australian.com.au

About Tom Harley

Amateur ecologist and horticulturalist and CEO of Kimberley Environmental Horticulture Inc. (Tom Harley)
This entry was posted in comedy, media, Oz politics, Resources and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s