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Labor busted fudging the numbers



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THE HON JOE HOCKEY MP

Shadow Treasurer

THE HON ANDREW ROBB AO MP

Shadow Minister for Finance, Deregulation and Debt Reduction

Monday, 24 September 2012

LABOR BUSTED FUDGING THE NUMBERS

The Final Budget Outcome released today shows Labor has been busted fudging the numbers.

The Australian National Audit Office has belled the cat on Labor’s cook the books game played in the 2011-12 MYEFO and the 2012-13 Budget.

The Government has been forced to move a $500 million special dividend from the Reserve Bank of Australia to 2011-12 from 2012-13.

Labor was also ordered to change the timing of the Australian Reinsurance Pool Corporation dividend to be counted in 2011-12 as opposed to being apportioned over the forward estimates.

Today’s release shows the Government’s fiscal position continues to deteriorate - confirming this Government is the most addicted to deficit and debt in our history.

Joint Media Release - Labor busted fudging the numbers Monday, 24 September 2012

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The Budget position has been further undermined by Labor’s $120 billion Budget black hole of unfunded promises.

The underlying cash deficit for 2011-12 was $43.7 billion - a number Wayne Swan was too embarrassed to mention in his press conference. This is Australia’s 3 biggest Budget deficit on record.

Over just four years this Government has run cumulative deficits exceeding $173 billion.

This Government in five short years has converted $70 billion of money in the bank to $147 billion in net debt.

Net debt has blown out by another $5 billion in just seven weeks, which is an extra $90 million a day on the nation’s credit card.

Wayne Swan described this as a “small increase” - but $5 billion is the equivalent of five world class hospitals or half the annual cost of the National Disability Insurance Scheme.

Furthermore, this deterioration is even before the Government takes into account its $120 billion great big Budget black hole - arrived at through Labor’s reckless and unfunded promises in defence, disability services, education and border protection.

Underlying Cash Balance forecasts for the 2011-12 Financial Year have blown out. In the 2011-12 Budget Papers Labor estimated a deficit of $22.6 billion for 2011-12. The Final Budget Outcome saw this deficit for 2011-12 blowout to $43.7 billion. This is a total deficit blowout of over $21 billion in just 15 months.

Underlying Cash Balance

Year Budget Year

Estimate ($m) Final Budget Outcome

($m)

rd

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Net Debt

Year Budget

Year Estimate ($m)

Final Budget Outcome ($m)

2008-09 (44,987) (16,148)

2009-10 53,700 42,283

2010-11 78,520 84,551

2011-12 106,646 147,334

2012-13 143,345 ?

Net Interest

Year Budget

Year Estimate ($m)

Final Budget Outcome ($m)

2008-09 21,703 (27,079)

2009-10 (57,593) (54,750)

2010-11 (40,756) (47,746)

2011-12 (22,618) (43,740)

2012-13 1,536 ?

In the 2011-12 Budget Papers, Labor estimated a net debt of $106.6 billion in 2011-12. The Final Budget Outcome saw this debt blowout to $147.3 billion - a blowout of over $40 billion. This blowout increased Australia’s yearly interest payment in 2011-12 by $1.1 billion to $6.6 billion.

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2008-09 (2,166) (1,196)

2009-10 1,464 2,386

2010-11 4,633 4,608

2011-12 5,536 6,609

2012-13 7,001 ?

Payments

Year Budget

Year Estimate ($m)

Final Budget Outcome ($m)

2008-09 287,764 316,046

2009-10 336,644 336,900

2010-11 352,253 346,102

2011-12 362,078 371,032

2012-13 364,209 ?

Spending as a percentage of GDP in 2011-12 was higher than at any point under the Howard Government, coming in at 25.3%. Labor is still spending $100 billion a year more than the last year of the Howard Government.

Today’s results cast significant doubt on the 2012-13 promise of a surplus that the Prime Minister claims has already been delivered.

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This year the Government expects to collect an extra $39 billion in revenue - taking them from a $43.7 billion deficit in 2011-12 to a $1.5 billion surplus in 2012-13. This is even before a further deterioration of Government revenue is factored in, as foreshadowed by Wayne Swan’s own Treasury Secretary Dr Martin Parkinson and the former Treasury Secretary Dr Ken Henry.

This Government is fiscally incompetent - not only do they have a $120 billion great big Budget black hole, but today is further confirmation that you cannot even trust the Government’s numbers contained in the Budget papers.

This is a Government without a plan, fudging the numbers as they go along. They cannot be trusted with managing the nation’s finances.

[ENDS]

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