Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
The 1990-91 budget report card



Download PDFDownload PDF

t //3

Peter Reith

D E P U T Y L E A D E R of the O PPO SITIO N PRE S S RELEASE SH A D O W T R EA SU R ER

THE 1990-91 BUDGET REPORT CARD

The report card on Australia's economic performance that came with the National Accounts this week showed that the Hawke Government failed nearly every subject.

The rosy picture the then Treasurer, Paul Keating, painted in last year's Budget of an Australian economy "in the right financial shape as we enter the 1990's" could not have been further from the truth.

Mr Keating told Australians in his speech last year that!

"In other words, we will succeed in doing what we set out to do— to slow the economy without impairing longer-run growth prospects or jeopardising the economic and social advances of recent years.

"This year...employment will pick up.

"In short, the kind of outcome the government was seeking, delivered without the misery and despair of high unemployment and a savage recession."

Those words, and the monumental miscalculation, and blatant incompetence that they reveal will hang around Paul Keating's neck for the rest of his political career.

But let's take a look at the report card in detail.

ON THE BUDGET OUTCOME

The Government predicted a surplus of $8,107 Billion.

WRONG

The Government delivered a surplus of $1,895 billion.

ON UNEMPLOYMENT

The Government predicted "the number of people in work is expected to increase over 1990-91".

WRONG

The Government forced more than 240,000 people out of work pushing the unemployment rate to 9.8%

COMMONWEALTH P A R L IA M E N T A R Y LIBRARY MICAH

2

ON GROWTH

The Government predicted growth of 2.0%

WRONG

The Government delivered three out of four quarters of negative growth. Overall, the GDP result for the year stands at minus 0.9%

ON INFLATION

The Government predicted an average inflation rate of 6.5%

WRONG

Courtesy of the most savage recession in sixty years, the Government delivered average inflation of 5.3% for the year.

The last Budget speech that Paul Keating delivered as Treasurer (see attached quotations) makes for interesting reading.

It is full of confidence, but nothing else.

The contrast with his successor, Mr Kerin, could not be starker.

Picture the scene: The chamber in the House of Representatives falls into silence as the clock strikes 3 o'clock. Government and Opposition members all lean forward in anticipation, as John Kerin reluctantly gets to his feet for the 1991-92 Budget Speech. He glances nervously over his shoulder at a dark gentleman in a double-breasted suit on the way to the dispatch box, and says:

"We should be alright folks.

"Your guess is as good as mine."

HASTINGS

17 August 1991

D103 Contact: David Turnbull 06£77 4277

WHAT MR HAWKE'S TREASURER SAID IN LAST YEAR'S BUDGET

"...we are emerging from this phase in fundamentally better shape having succeeded in this transition."

"Economic policy has worked and is working"

"...as the economy adjusts to a sustainable rate of growth without a catastrophic collapse."

"This year...employment will pick up"

"In short, the kind of outcome the Government was seeking, delivered without the misery and despair of high unemployment and a savage recession."

"Mr Speaker, the Budget will deliver in precise terms, a surplus of $8,107 billion."

"This Commonwealth surplus will ensure that Australia's public sector as a whole is in balance."

"Now that the economy has paused for breath, unemployment is expected to rise a little."

"Even so, the number of people in work is expected to increase over 1990-91."

"In other words, we will succeed in doing what we set out to do - to slow the economy without impairing longer-run growth prospects or jeopardising the economic and social advances of recent years."

"This Budget will more than uphold its end of the bargain."

"As I said at the beginning of my speech, it is a Budget that will keep us in the right financial shape as we enter the 1990's."