On the subject of...

Budget

27
Sep
2016

Ken Henry on Budget Problem, Aleppo Highlights US Failures Under Obama, Ban Muslim Migrants?

The Weekend Australian ran as the lead report an interview by Paul Kelly with former Treasury Secretary, Ken Henry, who is now Chairman of the National Bank. Henry said that more needs to be done to reduce the budget deficit instead of talking about it (see Ken Henry on Budget Deficit). This provided an opportunity to point out that the “times have changed” since Henry was the TS and advised Rudd to go for broke: indeed the advice to Rudd was, at best, highly questionable if not wrong (see my letter below). The Australian is to be congratulated for continuing its helpful advocacy today partly through publishing a swag of supporting letters and partly by having its Canberra Bureau Chief, Phillip Hudson, pen a separate article (see Everyone to blame for our budget spiral of hopelessness). Hudson points out that one of the problems is that “ Neither Labor or the Coalition, on their current trajectory, ­promise a surplus before the next election. Morrison hopes for one in 2020-21. Labor went to the last election with a plan that would leave the budget $16bn worse off over the next four years before making everything tickety-boo within a decade. These scenarios are based on Australia continuing on its growth path of the past 25 years. What happens if something goes wrong?”
18
Sep
2016

Budget (?) “Wins”, Immigration Policy

Although we had a long election campaign during which Parliament was not sitting, it now has another “break” until 10 October during which Turnbull and two other ministers (including Immigration Minister Dutton) will travel to the US. In this coming week Turnbull is scheduled to attend what his press release describes as “the biggest summit on the international calendar” - the UN General Assembly Leaders’ Week, which will include “summits on refugees and migration” hosted by Ban Ki-moon and a smaller one arranged by Obama. But, while discussions at UN General Assemblies rarely produce meaningful policies for use back home, the risk is that Turnbull may relax our refugees policy and, as Abbott did, agree to take more refugees. Given the tightening of border controls by European countries, and increasing concern about terrorists being amongst asylum seekers, Australia’s existing policy would seem justifiable.
6
Sep
2016

Turnbull & G20, Iran Threat, Andrews Poll Down; Obama’s Dr on Hilary

While Turnbull himself could not be blamed for the absence of three ministers and other Coalition MPs at the end of Thursday’s Reps session, he must have failed to emphasise to the whips and others the importance of attending the first session after an election result which he had publicised as providing a majority. The absence of 10 Coalition MPs allowed Labor (which had obviously planned to take advantage of any absences) to indicate that this is another example of Turnbull of mis-management. And this theme has been taken up in the media too, including one suggestion that Turnbull lacks a “wingman” to support him in Parliament. Perhaps the failure to sack the Chief Whip, Pyne, illustrates the problem.
31
Aug
2016

Turnbull Satisfies Electorate Less than Shorten, Enterprise Bargaining, Global Warming, Presidential Candidates’ Health

The first Newspoll since the election on July 2 shows only a slight fall in the Coalition’s TPP from 50.4 per cent to 50 per cent but a large drop in Turnbull’s net satisfaction ratio to the point where it is now less than Shorten’s (minus 18 cf minus 14). Late last year Turnbull was plus 38 while Shorten was minus 38. While Turnbull still has the Better PM rating, the gap has narrowed sharply. Importantly, the poll also shows that “Reducing debt and deficit” are strongly supported by both Coalition and Labor voters, almost as strongly as “Maintain border security”.
24
Aug
2016

Budget Savings, Protecting Voluntary Agencies, Clinton’s Health, Syrian War

With the imminent resumption of Parliament some warming-up is occurring. In The AustralianFinance Minister Cormann is reported as making new claims that the Coalition has already made large budget savings ($221bn over 10 years locked in) and that more could be made with Labor support. It appears Cormann refers to possible savings additional to those proposed by Turnbull to implement a miniscule $6.5 billion in budget savings said to have been agreed by Labor. But why hasn’t the Coalition detailed some possible additional savings?
19
Aug
2016

GST Shares, Budget Strategy, NT Royal Cn

In my Commentary on Tuesday I suggested that Turnbull’s announcement at the WA Liberal Party’s conference held last weekend that each State would now be guaranteed a minimum share of GST revenue was, once again, lacking in any serious analysis or any checking first even with senior ministers, let alone other states. It has subsequently emerged that the new arrangements, the calculation of which has not been stated, are first to be discussed with other states and that it is unclear when they might start (although WA Premier Barnett who has an election next March says he thought it would be this calendar year). The Australian also published an analysis on the assumption that the minimum share would likely be 75% and that WA (now receiving only 30%) might not receive any future benefit from any such arrangement. My letter to the Australian on the issue was published yesterday with four others (see GST Shares).
23
May
2016

Sloan on Budget Outlook

Recipients of my recent Commentaries will be well aware of my expressions of concern about the budget outlook in the last couple of weeks. Friday’s Commentary expressed additional concerns after the publication by the heads of Treasury and Finance in PEFO of their concerns, albeit expressed diplomatically (at the same time it was reported that Treasury head Fraser would resign after the election: he will be a serious loss and his successor under either party will find him difficult to follow). I also drew attention to the Spectator Article by John Stone, which not only savaged the Coalition’s budget but pointed out that neither Labor nor “independent” journalist commentators have (with one or two exceptions) drawn attention to the seriousness of the economic problem Australia now faces. I concluded by suggesting that the Coalition should acknowledge the problem and indicate that after the election it will start a program of reducing spending by at least 2% of GDP over the next three years.
18
May
2016

Will there be Real Budget Tests Available Publicly before the Election?

Today’s Financial Review has published my letter (see below) drawing attention to the importance of providing analysts with an accurate picture of the effects on the budget of policy announcements by both major parties. Separately, the AFR has reported (also shown below) that the Treasury will actually publish its assessment of the budgetary effects on Friday. But one question is whether sufficient detail will be provided to allow a meaningful analysis of for example the extent to which Federal government expenditures are drawing on national resources and further adding to the higher tax burden which the 2016-17 budget already proposes. Similarly, will we be provided with revised estimates of the deficit and (the likely) higher debt levels?
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