There will be no return to surplus, Mr Hockey

By Leith van Onselen

Treasure Joe Hockey appeared on ABC’s Insiders yesterday and played-down the prospect of the Budget returning to surplus:

JOE HOCKEY: We have consistently said Barrie that we want to have structural reform that helps to deliver a surplus as soon as possible…

BARRIE CASSIDY: But in the budget itself, will you be any more precise than that in terms of talking about a return to surplus, or will that be the language you use – as soon as possible?

JOE HOCKEY: In the budget you’ll see the numbers, you’ll see the numbers…

BARRIE CASSIDY: Will you be putting a date on a return to surplus?

JOE HOCKEY: We never put a date on returning to surplus. We just need to show we have a quality trajectory, a quality trajectory back to surplus and that we are getting the budget under control. Now, you will see that in the budget…

BARRIE CASSIDY: Are you then able to at least assure the electorate there will be smaller deficits over coming years, there will be increasingly smaller deficits?

JOE HOCKEY: That’s what we’re aiming at Barrie, absolutely.

BARRIE CASSIDY: It’s an aim?

JOE HOCKEY: We are consistently aiming at it.

Hockey’s comments are a far cry from the Coalition’s previous blustering over a Budget surplus. As noted in Fairfax today:

Coalition pledges before the 2013 election [said] that it would deliver a surplus in its first year in office and “every year after that”, based on budget numbers at the time.

The Coalition has since backed away from the claim, however, Prime Minister Tony Abbott told a Coalition meeting last month that the budget would be back in balance within five years.

The cold hard truth is that the Coalition’s pledges to return the Budget to balance were never achievable, for reasons explained on this blog two years ago.

Commodity prices and the terms-of-trade were always going to revert back towards their long-run norms, the epic mining investment boom was always going to unwind, and the population was always going to age. Since then, the car manufacturers have also announced that they would exit Australian production by 2017, making the Budget repair task even more difficult.

Unfortunately, the Abbott Government has shown little appetite for arresting the Budget’s slide through genuine reform. It has already avoided tackling the gaping tax expenditures blowing huge holes in the Budget and distorting the economy, such as superannuation concessions, negative gearing and capital gains tax concessions. It’s infrastructure spending decisions, which will affect the nation’s long-term productivity (and therefore tax revenues) have also been questionable, as evident by the East-West Link debacle.

Unless there is a concerted effort to both raise revenue and cut expenditures, as well as boost the economy’s productivity and growth, then achieving a Budget surplus will forever remain a pipe dream for the Coalition.

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  1. JOE HOCKEY: “We never put a date on returning to surplus”

    Truly just astonishing!!!!

    They must think we still live in an era without telecommunications and recoding devices

    • “They must think we still live in an era without telecommunications and recoding devices”

      It must be hard to keep track of all the lies when lying is so deeply embedded in your psyche and you’ve done so much of it.

      • Yeah, but the only bad lie (politically) is a Labor lie. Coalition lies are for our own good. Plus they’re the adults, they know what’s best for us.

      • Rent Seeking Missile

        ‘They must think …’

        Problem is they DON’T think. It’s all just verbal sludge which vaguely suits whatever message they want to give at the current moment.

        And they get away with it because the media people that they talk to aren’t bright enough or hard-working enough to do the research to catch them out.

  2. hockey claiming that measly 200 bucks a nite ‘allowance’ when his wife owns the property says a lot about his mentality

    also, the way he deflected on qanda about pollies with vested interests in property as a ‘cheap shot’ was pathetic

    a joke of a man


    There is always a section on the big white-water rivers where the kayaker realizes there is no more structures that can provide an ‘eddy’ and, if needed, temporary safety. At this point, skill becomes vastly more important than ‘luck’ and not surprisingly, those without the required skills can no longer pretend they possess them.

  4. ceteris paribus

    How can Joe achieve a surplus if the Senate won’t let him take down the poor, the lower income and the lower middle? You can’t expect him to give up his tax concession pork. He is hungry enough as it is.

    • Rent Seeking Missile

      Anyone who had paid attention to his career knew that this outcome was never in doubt. Never for a minute has he ever even looked like being up to the job.

      The Liberals really missed a golden chance to poleaxe him last December. Too late now. They and we are going to pay dearly for that lapse.

  5. Family Tax Benefits increased to ludicrous proportions under Howard/Costello, child care benefit increased to ludicrous levels under Rudd. In both cases these increases were predicated on sustained higher levels of revenue. Why on earth is the Coalition still intent on targeting Higher Education, health and pensions for reform when the true beneficiaries of the original erroneous revenue assumptions were Family/Child Care Benefits ? Roll them back to pre-2007 levels (and yes, trim the capital gains discount back to 30%, and roll back the generosity of tax on super back to pre-Costello levels) and we are a long way down a more sustainable path without going after investment in education and support for pensioners.

    • The gradual decimation of Tertiary Education funding by both major parties has been conveniently ignored by much of the Australian population and if allowed to continue will come back to bite us.

  6. He gives clowns a bad name.

    So much for a budget emergency. I guess someone can cancel that call for a waaaambulance then. LOL!

  7. Read it again, this time in Clark and Daws voice and its hilarious.

    “JOE HOCKEY: That’s what we’re aiming at Barrie, absolutely.

    BARRIE CASSIDY: It’s an aim?

    JOE HOCKEY: We are consistently aiming at it.”