Joe Hockey to deliver gloomy mid-year economic statement
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Version 0 of 1. Joe Hockey will deliver a gloomy mid-year economic statement next Tuesday and the major parties are already arguing about who is primarily to blame for the bad news. The treasurer told parliament the statement – to be made at the National Press Club – would confirm in “graphic detail” that Australia is experiencing below-trend growth and rising unemployment, “illustrat[ing] to the Australian people that [Labor was] the most reckless government in modern Australian history … a government with absolute disregard for Australian taxpayers' money”. Hockey points to the $30.1bn deficit for this year that the Coalition inherited, as well as the savings that Labor is now opposing, including $2.3bn in higher education cuts it had itself announced in government, and its refusal to back the Coalition’s cuts to measures funded from the carbon and mining taxes. According to calculations circulated by Hockey these decisions by Labor in opposition add almost $2bn to the budget bottom line this year and more than $18bn in the four years of the budget estimates. But Labor points to Hockey’s own decision to grant the Reserve Bank $8.8bn and says move together with decisions to water down Labor’s changes to tax breaks for high-income earners’ superannuation will add at least $9.2bn to the budget deficit for 2013-14 – which was forecast at $30.1bn in the pre-election budget statement delivered in August. The government will also have to announce $1.2bn in savings to pay for its decision to backflip and reinstate full funding for the Gonski schools package over the next four years. According to the pre-election economic and fiscal outlook, the deficit was going to be $24bn in 2014-15, $4.7bn in 2015-16 before the budget returned to a small $4.2bn surplus in 2016-17. On Tuesday Labor and the Greens combined in the Senate to block the government’s plan to repeal the Clean Energy Finance Corporation. The Coalition sought to abolish the corporation, which has a brief to lend $10bn over five years to renewable and clean energy projects as part of its package of carbon tax repeal bills. It labelled the organisation the “Bob Brown bank” and tried to direct it to stop lending money. But the corporation argued vehemently that it could help the Coalition implement its Direct Action greenhouse gas reduction plan and that it would generate a return for taxpayers at the same time. The corporation says it is legally required to continue lending money while its legislation is in place. The September quarter national accounts recorded annual GDP growth at 2.3%, or 0.2% lower than Treasury's final forecast for the financial year of 2.5%. Our editors' picks for the day's top news and commentary delivered to your inbox each morning. |