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Howard and Costello's billion-dollar week.

Howard And Costello's Billion-Dollar Week

 

Kim Beazley, Leader of the Opposition, and Simon Crean, Shadow Treasurer

 

Joint Media Statement - 18 April 2000

 

Last week the Government punched a $1,600 million hole in the Budget. This means that, since the release of the 1999-2000 mid-year review last November, this Government has eroded over $2,000 million from the bottom-line over the next four years.

 

This nails once and for all any claims by this Government to be responsible economic managers.

 

The additional commitments in the Government's billion-dollar week were as follows.

 

Measure

$m (1)

Petrol grants

500.0

Alienation of personal services income

440.0

FBT charities and non profit organisations

455.5

Families package

240.0

John and Wendy no worse off commitment

Uncosted

Postgraduates no worse off commitment

Uncosted

TOTAL

1 635.5

 

Much of the spending listed above is the result of problems created by the imminent introduction of the unnecessary and unfair GST - such as the petrol grants and the compensation top-ups.

 

The derisory 'families package' announced at the weekend is a piecemeal and inadequate attempt to trick the public into forgetting the $5,000 million of cuts to social spending imposed by this Government. Once again, the Government's ability to do anything serious to restore funding for families has been limited by the colossal cost of the GST.

 

Before this latest spending spree, respected economic commentators were raising serious concerns about the state of the Budget at this stage of the economic cycle. In their Budget submission, the Business Council of Australia, using the work of Access Economics, put the structural budget deficit in the order $3,000 million in 2000-2001.

 

This is a very fragile position to have the economy in after nearly nine years of growth.

 

The GST package is the biggest domestic threat to inflation, with interest rates already rising and wiping out John Howard's promised income tax cuts for thousands of Australians before they've even received them. We all know that prices are already rising, and are set to rise further from 1 July. The Government's fiscal loosening at this stage of the economic cycle can only add further to inflationary and interest rate pressures.

 

Since the savage and poor quality cuts of this Government's first Budget we have seen a series of policy decisions that have caused a $6,000 million deterioration in the bottom line in 1999-2000 alone.

 

John Howard and Peter Costello are fond of talking up their fiscal performance, but their record falls apart on examination.

 

This last week, with Mr Howard and Mr Costello showing all the fiscal responsibility of two drunken sailors, typifies the Government's haphazard and panicky approach to fiscal policy and puts the lie to their claims to be sound economic managers.

 

Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.