Images of Australian Prime Minister Tony Abbott listening to the Opposition's Budget Reply

I give you this commitment. Labor will never, never give up on Medicare. We shall fight this wicked and punitive measure to its ultimate end. That is a promise...
This Prime Minister’s cuts trespass against the nation’s covenants with pensioners...
I make this solemn pledge to Australia's pensioners. Labor will not surrender the security of your retirement. We will fight for a fair pension. And we will prevail...
This Prime Minister’s vicious, victim-blaming policy will create a lost generation of 
Australians—shut out of the workforce. And Labor will have no part of it. 
If you want an election, try us. If you think that Labor is too weak—bring it on. But remember: it is never about you or me, Prime Minister. It is about the future of our nation and the wellbeing of the Australian people. [Opposition Leader Bill Shorten, 15 May 2014]

Prime Minister Tony Abbott is a man clearly not liking what he is hearing. He maintained a defensive posture for much of Opposition Leader Bill Shorten's Budget Reply.

See Australian House of Representatives Hansard 15 May 2014 at 17:59 to 20:03 
YouTube video of Budget Reply at http://youtu.be/TrxAlX6aOy8

Mum! Mr. Eleventy is trying to scare me again!

This was Australian Treasurer Joe Hockey tweeting at 3.41pm on 6 May 2014:

Sixteen per cent! *shock, horror, gasp* Must agree with every funding cut, tax increase or punitive welfare measure in the Abbott Government's first federal budget!

Or do I?

What is this 6-year projection up to 2018 actually telling me about the state of national economies in those countries included on this graph.

Take the USA for instance, which Joe Mr Eleventy Hockey appears to be saying is doing so much better than Australia.

In 2013 in US dollar terms federal government spending totalled $3,454.6 billion, federal debt reached $16,719.4 billion and its gross domestic product (GDP) was $6,618.6 billion. Therefore US federal government spending was 52.1% of GDP and gross debt was 100.6% of the country's GDP. Based on White House data, US net debt was 28.5% of GDP and the federal deficit was 6% of GDP in that year.

While in Australia in 2013-14 federal government spending totalled $409 billion, gross commonwealth government debt reached $311 billion (on 31 March 2014) and our gross domestic product (GDP) was $1,577 billion. Therefore federal government spending in 2013-14 was 25.9% of GDP and gross debt was an est.19.7% of GDP (as of 31 March 2014). According to the current Minister for Finance, federal net debt will be an est. 12.4 % of GDP and Treasurer Hockey's own MYEFO projects a federal deficit of 2.98% of GDP for the 2013-14 financial year.

Clearly Mr, Hockey's tweeted graph means little when one compares the word's largest economy with Australia's better economic profile. 

Muuuum! Make him stop!

Note: Australian data drawn from The Treasury, Dept. of Finance, Australian Office of Financial Management and Australian Bureau of Statistics.

During Prime Minister Tony Abbott's alleged 'debt and deficit disaster' Treasurer Joe Hockey went on a borrowing spree

Based on Australian Government Office of Financial Management data:

•  In November 2007 the Rudd-Gillard Labor Governments came to power
• Federal Labor Government: In August 2013 the gross government debt was $271.57 billion – if total Commonwealth guaranteed state debt (NSW & Queensland) is included the total gross debt was $293.43 billion.
• On 18 September 2013 the Abbott Liberal-Nationals Government was sworn in after winning the federal general election
• Federal Coalition Government: By 2 May 2014 gross government debt was $319.56 billion - if total Commonwealth guaranteed state debt (NSW & Queensland) is included the total gross debt is $319.58 billion

What this shows it that, on behalf of the Abbott Government, Australian Treasurer Joe Hockey has borrowed an additional $47.99 billion over 208 days or an est. average of $23 million dollars a day – and he is still trying to blame the former federal government for the entire gross national debt in 2014.

For the sake of $16.41 billion the Abbott Government is going to start a class war?

In the 20 years since the last ­thorough review of the Commonwealth government, budget spending has more than tripled. [Chair of the National Commission of Audit Tony Shepherd writing in the Financial Review on 2 May 2014]

It seems Chairman of the Abbott Government’s National Commission of Audit, Tony Shepherd, likes to compare the last twenty years when explaining the recommendations of the 2014 national audit made public on 1 May.

So what is the actual comparison? Well it breaks down like this.

In 1994 the Australian population was an est. 17.93 million. By May 2014 the population grew by 23.62 per cent to an est. 23.47 million.

In May 1994 there were 8.71 million people in the Australian labour force. In 2014 this had risen to 12.26 million people.

In 1994-95 all industry multifactor productivity was 108.5. In June 2013 it was 104.9 - a 3.6 point difference.

In 1994 Australia’s nominal Gross Domestic Product (GDP) was an est. $323.41 billion and is an est. $1,577 billion in 2014.

Australian Government net debt reached 24.2 per cent of GDP in December 1994. Net debt reached an est. 11.7 per cent of GDP in 2013-14.

In 1994-95 the Federal Government had receipts totalling $113.45 billion and in 2013-14 total receipts were an est. $392.59 billion.

In 1994-95 Australian Commonwealth government outlays totalled $128 billion and in 2013-14 government outlays totalled $409 billion, which represents a threefold increase over the two decades spanning the last half of the Keating Government, the Howard Government, the Rudd & Gillard Governments and the beginning of the Abbott Government.

In May 2014 the Australian Government total combined net debt and spending is an estimated 38 per cent of GDP.

Basically, Australia’s population has grown and so has federal government spending, while multifactor productivity is lower. However, the gross domestic product has also grown along with the amount of taxes paid and the number of people of workforce age, while net government debt has fallen. 

I honestly cannot see that the $16.41 billion shortfall between money coming in and money going out in 2013-14 is a valid reason for dismantling universal health care and forcing aged pensioners into a below the poverty line standard of living after 2016-17.

Especially if one looks at the numbers Mr. Hockey considers valid.  In 2013-14 Federal Government total payments (spending) are 25.93% of Australia’s Nominal Gross Domestic Product (GDP). By 2023-24 total payments are projected to be 26.50% of GDP. That expenditure growth is less than 0.57% over a decade, while the GDP is projected to grow 5.1% annually over that period.

When one factors in the possibility that reducing corporate ‘welfare’ grants, rebates and concessions would over time reduce the $16.41 billion, it makes the government’s position incomprehensible  to say the least.

However, the Abbott Government attack on the welfare system apparently has less to do with economic reality and more to do with ideology and, no amount of media management by the government will be able to disguise this reality.

Note:

Dollar amounts and percentages are based on data found in Australian Bureau of Statistics tables, Australian Parliament briefing papers and Abbott Government documents and reports.

Welcome to the world of Hockeynomics - Part Two

This was Australian Treasurer Joe Hockey reported on ABC News, 24 April 2014:

The Treasurer Joe Hockey is talking tough on welfare measures in the lead up to the Federal Budget, saying means testing will become more important into the future, and Australians should keep working for as long as they can.

He's revealed some of the findings of the Commission of Audit, which shows that at $39.5 billion, Australia spends more on the age pension each year than it does on defence, hospitals, or schools.

"It is our single biggest spending program," Mr Hockey said.

"So the policies must be changed, either now or more dramatically in the future." [my red bolding]

According to Mr. Hockey in less than twelve months the Age Pension has gone from being the Federal Government’s third highest single recurrent expenditure item (approximately 10% of the Commonwealth Budget) to the highest at $39.5 billion.

Up an est. $2.5 billion since June 2013 and leaving Health expenditure at $62 billion and Goods and Services Tax transfers to the states at $48 billion miraculously way behind Age Pension costs using that mysterious method of accounting - hockeynomics.

Commonwealth government recurrent expenditure, 2012-13 

Grattan Institute analysis of Commonwealth budget papers

Grattan Institute 24 January 2014

In 2012-13 Defence as a recurrent expense was estimated to cost the federal government $30.8 billion and Education (minus the research component) was estimated at $27.16 billion, according to the Grattan Institute’s Budget Pressures on Australian Governments.

This is what Treasurer Hockey was waving in front of Spectator Magazine on 23 April 2014:

Again using hockeynomics, it appears that Defence as a recurrent expense has reduced in size by an est. $5.5 billion in less than ten months -  and this despite the Abbott Government spending many millions searching for the missing Malaysia Airlines plane since early March 2014 and increasing naval border surveillance since September 2013.

While Health expenditure is only shown as three discrete items in his Commission of Audit data and, is therefore reduced by $19.7 billion in under 10 months to make it appear as though the Age Pension is by far and away the largest contributor to the federal government's recurrent expenditure.

Education expenditure has $7.16 billion off its bottom line in less than 10 months in order for it to also fit into Hockey's universal-safety-nets-are-bad narrative.

If one looks at Mr. Hockey's chart; in 2013-14 Federal Government total payments (spending) are 25.93% of Australia’s Nominal Gross Domestic Product (GDP). By 2023-24 total payments are projected to be 26.50% of GDP. That expenditure growth is less than 0.57% over a decade, while the GDP is projected to grow 5.1% annually over that period.

Whereas, by comparison, in the United Kingdom (which also has a universal safety net policy covering health, education, employment, pensions and welfare payments) public sector spending was 42.2% of its GDP in 2013-14.

As for Australia's national public debt which is often quoted by the Abbott Government as a reason for taking the razor to government programs - the International Monetary Fund (IMF) in 2013 clearly stated that: Australian general government gross debt is expected to peak at around 32 percent of GDP in 2015 and is among the lowest in advanced nations.[International Monetary Fund. Asia and Pacific Department, Australia: Staff Report for 2013 Article IV Consultation-Staff Report]

While Mr. Hockey is trying to talk up his budget 'emergency' and demonise age pensioners (despite the fact that only seven per cent of Australia’s recent increase in health-care costs is due to aging, only 5% of people over 65 years require residential care as they age and more older people are already chosing to remain in the workforce longer), he remains almost mute on the subject of the new Abbott version of the Paid Parental Leave scheme.

This scheme will cost $14 billion in the first three years, or $4.66 billion a year. Costing taxpayers over $1 billion to meet the employer levy shortfall in its first year alone - in order to pay out up to $75,000 $50,000 (plus superannuation component) per non-means tested 6 month leave application granted.

The motivation behind this new scheme is not hard to find as it is based on feathering the nests of right-wing politicians' families and presumably the families of their political donors.

Here is Prime Minister Tony Abbott reported in The Sydney Morning Herald on 5 March 2014:

Mr Abbott said he opposed paid parental leave as a minister in the Howard government, but his views changed after considering what would be best for his daughters.

NOTE:

On 1 May 2014 at 2pm. the Abbott Government is finally releasing its first National Commission of Audit report. On May 13 full details of the Abbott Government's first federal budget are due to be released.

"Nothing is free - someone always pays" says the Australian Treasurer Joe Hockey

In The Canberra Times on 24 April 2014 Australian Treasurer and millionaire Joe Hockey is quoted as saying that proposed new co-payment charges; would "encourage moderation in demand for services", noting that "nothing is free - someone always pays" in a discussion of a possible Medicare co-payment fee for GP visits, possible increased PBS prescription charges and increased co-payments for aged care.

Yes Mr. Hockey, somebody always pays. Every living person who has ever paid tax has contributed to the funding of government services.

In 2014 even people on pensions and benefits pay tax on life’s essentials. They probably pay more if they live alone and have no savings or assets .

The Federal Government’s Goods & Services Tax (GST) would likely take an estimated non-refundable 8% to 14% out of the weekly incomes of single pension/Newstart recipients when they rent the cheaper range of accommodation and live modestly.

According to the Australian Bureau of Statistics (ABS), in 2009-10 there were an est. 3.8 million people across Australia receiving either an age, service, widow, wives, partner, disability, disability support, pensions or partners allowance or Newstart.

This number represents a great deal of consumption tax and indirect taxes paid into federal government coffers. In fact it probably represents billions of dollars annually.

So there is virtually no-one left in Australia who is receiving anything from the federal government for free. 

In 2011-12 the ABS estimated that 2.2 million people were in the lowest income decile (before and after computing rent) and 22.3% of these were 65 years of age or over.

Time for the man eligible for that taxpayer funded super-sized parliamentary pension, with additional perks, to come up with a new argument for ripping the safety-net welfare system to shreds.

Time also for the Treasurer to look to the breach in the Medicare system which costs the federal government millions of dollars each year - fraud perpetrated by both individual GPs and medical practices.

In April 2014 the Auditor-General delivered Audit Report No.26 2013–14: Medicare Compliance Audits which clearly showed that the Dept. of Human Services was not seriously pursuing debt recovery. 

The audit report states that between 2008–09 and 2012–13 there was a $128.3 million shortfall in the savings achieved by the department, when it came to monies actually recovered as a result of Medicare compliance audits of doctors and medical practices.

In fact the amount recovered to date is verging on the pitiful:

Yes, it seems that Mr. Hockey would rather turn low income earners, the unemployed, those with a disability and pensioners into beggars - rather than address a known flaw in the universal public health care system.

Perhaps because doctors have a powerful union of their own which might campaign against the Abbott Government in 2016 and, Hockey believes those voters with little money or power are easy to bully into submission.

UPDATE

As for the 'hidden' taxes low income families, Centrelink & Veterans Affairs pensioners, self-funded retirees and the unemployed pay........

The Sydney Morning Herald 3 May 2014:

Figures from the Australian Tax Office and federal government show the average Australian can expect to pay about $4600 in indirect taxes this financial year....

The Henry Tax Review, which reviewed Australia's taxation system after the global financial crisis, found Australians pay "at least" 125 taxes each year.

Of these, 99 are levied by the federal government, 25 by the states and one by local government (council rates).

Welcome to Hockeynomics - Part One

Hockeynomics - noun

1. Economic calculations having little or no rigour 2. Economic reports in which truth or fact is whatever the Australian Treasurer wants it to be

The Sydney Morning Herald 27 April 2014:

Treasurer Joe Hockey's claims that his wealthy constituents enjoyed some of the highest bulk-billing rates in the country are looking a little washed out.

Mr Hockey said last week the cost of Medicare is growing at twice the speed of the economy and that co-payments are ''certainly something that is in the mix'' for the budget.

''Now I want to emphasise my electorate of North Sydney has one of the highest bulk-billing rates in Australia and I have one of the wealthiest electorates in Australia,'' Mr Hockey told ABC radio. ''To me there is something wrong with that.''

In fact, Mr Hockey’s electorate had Sydney’s fifth-lowest bulk-billing rate, 70 per cent, according to 2010-2011 Department of Health data, the most recent available. This is below the national average.

A spokeswoman for Mr Hockey declined to provide any data to support the Treasurer’s comments, saying only: ''The electorate has a high rate of bulk-billing for affluent areas.''

The government’s expenditure review committee has reportedly approved a $6 co-payment, capped at 12 GP visits, meaning patients would pay a maximum of $72 extra each a year.

Future Fund Board of Guardians spends $12,000 on two Christmas parties while Abbott Government takes budgetary razor to Australia's most vulnerable

Last week was another public relations fail for the Abbott Government as went about selectively hinting at the range of cuts it intends to introduce to funding for Australia’s most vulnerable people and communities.

Herald Sun 26 April 2014:

Former treasurer Peter Costello’s Future Fund spent $8000 of taxpayers’ money on a Christmas party at a venue called La Di Da that offers burlesque evenings; but it insists there were “absolutely not’’ any strippers….

Mr Costello, Australia’s longest-serving treasurer, established the sovereign wealth fund in 2006 and was appointed as chairman by Joe Hockey in February.

No other candidates were considered for the $198,000-a-year part-time job. According to documents tabled in Parliament, a second Christmas party was then organised for the fund’s seven board members and 75 staff at an extra catering cost of $4000.

Since Tony Abbott was elected the Future Fund has spent nearly $5000 a day on airfares, $900,000 on ­recruitment costs and $15,500 for “human chemistry” consultancies….

Australian Treasurer and millionaire Joe Hockey photographed after a Spectator Magazine function at the somewhat luxuriously appointed Doltone House in Sydney on 23 April 2014, during which he gave a scaremongering speech on the need for us all to live within our national means.