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Labor's debt time bomb exposed



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THE HON ANDREW ROBB AO MP Shadow Minister for Finance, Deregulation and Debt Reduction Chairman of the Coalition Policy Development Committee Federal Member for Goldstein

M E D I A R E L E A S E

Sunday, 11 November 2012

LABOR'S DEBT TIME BOMB EXPOSED

The Gillard government has lost control of its record debt, and Labor's calculated deception of Australians about its ability to pay it off has been exposed.

Based on explosive new independent budget analysis, led by a former Treasury and Finance official at Macroeconomics, and obtained by the Coalition, Labor's net debt will hit an extraordinary $214.2 billion in 2015-16.

Yet according to the government's latest budget update (MYEFO), net debt will be reduced to $138 billion in 2015-16, before "returning to zero in 2020-21", which is totally unbelievable.

Shadow Minister for Finance and Debt Reduction, Andrew Robb, said: "Just two years ago in the lead up to the 2010 federal election Labor claimed net debt would peak at just $94.4 billion or 6.4 per cent of GDP. This analysis shows that net debt will be in fact 12.4 per cent of GDP in just three years time.

"Time and again this government has forecast rosy revenue levels and prudent spending outcomes, only to be subsequently found to be way out. This forecasting deception is a very deliberate political tactic.

"It explains the calculated nonsense from the likes of Penny Wong about Labor's so-called ‘fiscal discipline’ as government spending continues to far outweigh revenue and undermine the budget’s underlying structural health. In fact over the last five years Labor has spent $172 billion more than revenue raised."

Under Labor's current settings Macroeconomics found that the budget will be in deficit each and every year through to 2021-22, including this year (2012-13) by $7 billion, followed by deficits of $17 billion (13-14) and $23 billion (14-15).

Mr Robb said under this scenario Labor’s net debt will just keep rising leaving us increasingly vulnerable in an uncertain global economic environment.

"Labor's debt time bomb is the dead cat on the table and confirms the unacceptable risk a re-elected Gillard government presents to Australia's economy," he said.

Media Contact: Cameron Hill on 0408 239 521.