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Defecit not structurally sound, Mr Keating

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Prime Minister Keating has now conceded (Sun Herald, 30 June 1992) that the $10.5 billion budget deficit for 1992/93 is now no certainty. In typical Keating style he is preparing public opinion for a further deficit blow-out.

Mr Keating should now publicly admit that the budget is not 'structurally sound" and he should revise and publish the One Nation budget deficit projections for the four years leading up to 1995/96.

Indeed, it would be interesting to see whether Mr Keating stands by his One Nation forecast that the budget will move into surplus in 1995/96. The massive deterioration in the budget deficit over recent months makes that projected surplus highly unlikely.

Mr Keating is reported as saying, yesterday, that:

‘ This time of year the estimates for the Commonwealth Budget are notoriously unreliable but wefve already published a starting point of $10.5 (billion) and no doubt mil be around that, it could be a little... greater than that."

This is the first clear admission by Mr Keating that the $10.5 billion figure is in doubt. People can be sure that the figure is more likely to be exceeded rather than less.

The budget deficit for 1992/93 is more likely to be at least $12 billion than $10.5 billion.

Further, Mr Keating said:

‘ When the good times come it goes back into surplus, but during the bad times ms in deficit, as it should be, to help all those people with unemployment benefits."

Mr Keating published the figures in One Nation. If he still believes that the budget will return to surplus in the foreseeable future he should publish the numbers.

The bottom line is that a major budget problem has developed over the last two years and that it would be irresponsible to proceed with a further election spending spree in the August budget.

A continuation of the spending spree would be completely the wrong course. It would provide no long-term benefit to the unemployed because higher government borrowings would result in higher interest rates - and that means less jobs.

30 June 1992 Hastings


Contact: David Turnbull (06) 277 4277 D109/92