From the ABC:
LEIGH SALES: You keep talking about Australia’s need to live within its means. You’re forecasting deficits of $85 billion over the next four years. How is that living within our means?
SCOTT MORRISON: Well, within four years we’ll have the deficit down to $6 billion: 0.3 per cent as a share of the economy.
And the projections – and I stress they’re only projections – have the budget back in balance in 2021. Now, that’s the trajectory we’re on, based on our commitments, both on revenue and on expenditure.
The Labor Party, though, have a very different trajectory because they’re spending more and they’re taxing more.
LEIGH SALES: Well, let’s stick with your trajectory for the time being.
SCOTT MORRISON: Sure.
LEIGH SALES: Last week’s pre-election economic and fiscal outlook says that the timetable you’re talking about – the trajectory – for the return to surplus is “very sensitive to underlying assumptions”. I think in non-economic boffin speak, that’s: “Tell him he’s dreaming”?
SCOTT MORRISON: No. What that means is that it’s a sensitive economy that’s out there. And the forecasts that are in the budget and were confirmed in the PEFO statement, confirmed by the secretary of Treasury, confirmed by the secretary of the Ministry of Finance: they confirmed those forecasts.
Now, they’re the forecasts they provided to me as Treasurer and they’re the forecasts that are in the budget.
Now, it is a sensitive time, Leigh. But I stress that in the MYEFO document at the end of last year we revised down our projections on growth. And I still think we have very modest expectations of growth and consistent with where the rest of the world is.
LEIGH SALES: But to give you an idea of how tenuous those assumptions are and what they’re pointing out in PEFO: the timetable for the return to surplus relies on revenue surging as a proportion of GDP to a ratio we’ve only seen twice in the past 40 years. That’s the sort of luck you’re relying on?
SCOTT MORRISON: Well, no. What we’re relying on is growth returning to three per cent. Now, we actually had a three per cent growth rate last year. We had one of the largest years of growth in employment – 300,000 last year – that we’ve seen since the Howard days. So we are seeing growth in our economy.
The forecasts that we have are what is provided to us by Treasury, unaltered. And they’ve confirmed those in the PEFO document that are there. And they are well below what the long-run averages have been for growth. So that’s where our figures are.
If others have different views about what the growth forecasts are – and particularly if the Opposition has a different view about what the growth forecasts are – well, obviously then they would also have to accommodate that into how they’re projecting forward their expenses and their revenues.
LEIGH SALES: The PEFO document, though, is also making clear that if Australia wants to achieve the 10-year budget projections, what is required – and I quote – is: “Renewed vigour in encouraging and delivering structural reform across all parts of the economy.” Is that code for: “You’re not doing enough”?
SCOTT MORRISON: Well, what it’s code for – I don’t think it’s code at all, Leigh. It’s saying that you can never rest on the job of ensuring that our economy is growing and doing the things that you need to do to ensure the economy is growing.
LEIGH SALES: So are you saying, therefore, that you accept that you’re not currently doing enough?
SCOTT MORRISON: No. What I’m saying is: we have a national plan for economic growth and we’ve set it out in the budget. We’re setting it out in this election.
And that starts with our national innovation and science agenda. It’s our defence industry plan, supporting high-tech jobs for generations. It’s the tax cuts for small- and medium-sized businesses and hard-working middle-income families. It’s the export trade agreement: some 19,000 specific opportunities.
It is living within our means to ensure we have a budget where we can guarantee funding for roads and schools and for hospitals. And it’s ensuring we raise the revenue measures we need to by cracking down on multinational tax avoidance and better targeting our superannuation tax concessions.
You’re a liar and a bad one, Scott, with iron ore collapsing $10 below your outlook and futures $22 below:
Everything else following in its wake:
- dwelling investment to grow 2% when we already know it has peaked in ABS data;
- business investment is expected to fall -5% when hard ABS data is already measuring it at -18%;
- wages and demand growth based on 1.6% productivity gains and 2.5% wages growth when the current trend is sharp falls and 1.6% wages growth in the last quarter (and still falling);
- nominal growth is supposed to be 4.25% but when you add the right outlook it falls to 2.5%, the same as this year, at best.
Leading to a burgeoning budget deficit:
And ballooning net debt:
And a sovereign downgrade.
Lying to people’s faces is a great way to run a real estate agency but it doesn’t lead to long term prosperity for a country.
