World’s greatest treasurer …

Peter Costello gives an insight into the performance of the world’s best in the Sydney Morning Herald, the article is well worth reading in full.

Wayne Swan originally announced the 2012-13 budget surplus on May 11, 2010. He has heralded it in each budget and midyear review since. Which makes Monday the sixth time he’s announced it. It’s a forecast surplus of $1.1 billion. Never before in the history of budgeting has so little been promised so often.

We will not know until September 30, 2013 whether this surplus has been achieved. And if it is …

Over four budgets from 2008, deficits have cumulated 12.8 per cent of gross domestic product. Taking this year and the following three budgets, this will be followed by cumulative surpluses of 0.8 per cent (provided the economy grows at trend). Four years of surplus will pay back 1/16th of the four years of deficit. At that rate it would take half a century before we get to the stated goal of “surplus on average”.

As well as the promised “surplus” another of the government’s stated ambitions …

… is to “improve the government’s net financial worth over the medium term”. This measure includes government debt and its superannuation liabilities. Since it decided to set this goal, net financial worth has plummeted. You see, it is not just that the government has racked up debt. The Commonwealth does not even pay the full cost of its staff. It is not paying the superannuation component of public service entitlements. Nor does it count this as a cost in its budget. If a private employer tried to do this they would be prosecuted. It’s the kind of thing that drives the private sector wild. While the government is telling employers to lift superannuation contributions for staff, it is not funding its own superannuation schemes.

Personally, I think Wayne has got Buckley’s of delivering any surplus at all … he’ll be spinning like a top all the way to an election held just early enough to keep the populus from learning the true state of our finances.

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