The Treasurer Wants a Surplus Whether You like It or Not

The Treasurer Wants a Surplus Whether You like It or Not


“When government – in pursuit of good
intentions – tries to rearrange the economy, legislate morality, or help special interests,
the cost come in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active
player.” ~ Milton Friedman Josh Frydenberg, Treasurer of Australia, has
one obsession — to deliver a budget surplus at all costs — economy be damned! Yesterday he released the Mid-Year Economic
and Fiscal Outlook, the so-called MYEFO document, which shows that the Government are continuing
to promise surpluses over the next four years despite them having been revised downwards
since the April 2019 budget. Originally, Mr Frydenberg trumpeted $45 billion
in surpluses over the next four years in the lead up to the May 2019 federal election,
but now the forecasts have been slashed to almost half that falling to $23.5 billion. Of course, the excuses came spewing out. “Weak momentum in the global economy”,
“the devastating effects of drought and bushfires”. All of this is seen as being outside of the
Government’s control, so naturally, it’s not their fault, right? Right?! Mr Frydenberg commented, “Our devastating drought has already taken
a quarter of a percentage point off GDP growth and reduced farm output by a significant amount
over the last two years. Global trade tensions have weighed heavily
on consumer and business sentiment, with forecasts for global economic growth and that of our
major trading partners downgraded in today’s MYEFO.” Thanks to the reduced budget surpluses, the
Government had to abandon its pledge to wipe out net debt within a decade, but instead
expects debt to be around 2% of GDP by 2030. The forecast for GDP growth has also been
slashed from 2.75% to 2.25% going against the Government’s election pitch that they
would make the economy even stronger. Unemployment has been revised upwards from
5% to 5.25%. Wage growth has also been revised downwards
from 2.75% to 2.5%. Household consumption has really taken a hit. It has been revised downwards from 2.75% (which
is already below average) to 1.75%. If households don’t spend, the economy falters. We can also see that the forecasts for business
investment are way down, falling from 5% to 1.5%. That could only be described as a collapse. All these figures show one thing — the economy
is weak — as weak as we’ve seen since the early 1990s recession. But at least during previous times of economic
weakness, the Government have been willing to spend, but unfortunately the current Government
is obsessed with maintaining a budget surplus at all costs. As I said before, economy be damned! To keep this video fair and equitable, if
it hasn’t been already, let’s see what Shadow Treasurer Jim Chalmers had to say on
the recent MYEFO, “Growth downgraded, unemployment higher,
wages growth weaker, business investment dismal, government’s economic credibility destroyed
— that’s the mid-year budget update in a nutshell. Remember Scott Morrison and Josh Frydenberg
made a central part of their election pitch that they would make the economy even stronger,
but instead, as these numbers show, the economy has gotten substantially weaker on their watch. Mathias Cormann has been in the same job now,
he is in his seventh year as Finance Minister, in the third term of a Government. You would think by now this guy would finally
take some responsibility for the fact that net debt has more than doubled on his watch. The economy is floundering on his watch, growth
is slower since he became the Finance Minister when government changed hands.” Shadow Finance Minister Katy Gallagher added, “This is the seventh year, this is their
budget, their MYEFOs, their updates they put out. Gross debt has more than doubled and is now
at $556 billion. In this update, they have chucked away their
promise on eliminating net debt in 2029-30.” Of course, despite Labor not being in power
since 2013, the Treasurer still blames Labor for the debt that the Government has inherited. In last night’s episode of ABC’s 7.30,
he told Leigh Sales, “The budget surplus has never been about
a trophy for the cabinet shelf. What it has been about is paying back the
debt that we’ve inherited.” Leigh Sales responded, “It is not debt you have inherited. Debt has doubled since the Coalition took
office.” “Well, when the Labor Party came to government,
they were bequeathed the pristine balance sheet with zero government debt, then they
accumulated $240 billion of budget deficits. We inherited a situation where debt was growing
by more than 30% per year.” “And it’s grown, and it has doubled over
that time you’ve been in power.” “And it’s taken six years for us to get
that under control. So much so that we’ve now brought the budget
back into balance and we’ll deliver the first surplus.” Instead of chasing a surplus, many economists
suggest that the Government should be instead spending more on infrastructure in order to
boost the economy. Chris Richardson, a partner at Deloitte Access
Economics, commented, “If we went harder, for example, on infrastructure,
you would see unemployment lower, and wage growth faster than otherwise. But it would mean we would be cashing in a
degree of the recession insurance that both, from the Reserve Bank and Treasury, they like
to hang onto that in case the world throws something nasty our way.” With regard to wage growth, Secretary of the
Australian Council of Trade Unions, Sally McManus, spoke of the effects of stagnant
wages on the economy. She said, “If people don’t feel as though they have
got confidence that they’re going to be able to pay their bills into the future, because
their wages aren’t going up, they’re not going to spend. That flows through the whole economy, everything
from GST, revenues, retail sales, all of those things are affected if working people don’t
have confidence in their spending power.” EY Oceania Chief Economist, Jo Masters, spoke
on the economy more broadly. She said, “There are some clear challenges for the
Australian economy, including the narrow base for economic growth. The weakness in private domestic demand is
impacting government revenue from a broad range of sources and continues to face a variety
of headwinds with both consumers and business cautious, which is impacting their spending
patterns and intentions.” To be fair, I wouldn’t want to be the Treasurer
of Australia. It’s an unenviable job. People will attack you no matter what you
do. Whenever you assign money to one sector of
society, another sector will complain. But to focus all your efforts into maintaining
a surplus, despite the economy being in dire straits, I just can’t see the logic. And many commentators would agree with me. The economy needs a boost. It needs stimulus. But instead, Josh Frydenberg is clinging to
his surplus-at-all-costs mentality, which may just well be pushing Australia closer
to economic recession.

15 thoughts on “The Treasurer Wants a Surplus Whether You like It or Not

  1. Juice Media do a great job on covering the poor choices of our Government. Be sure to check them out if you haven't already.

  2. There was never going to be a SURPLUS it was always a election lie and never going to happen… ONLY A FOOL BELIEVED IT….we have been heading into a recession for the well over the last 12 months and Government revenue been plummeting … does anyone actually believe one single word that these professional liars and criminals say anymore?

  3. Chris Richardson just flip flops whatever some one should replay what he has said over the years. Another populists..Of course the economy is going to slow when the government has with drawn around 60 billion a year unless every one else decides to spend about 100 billion per year. Shows that we truly are really a socialist controlled state waiting for handouts and subsidies from the government. But Milton Friedman wasn't as correct as he thought, just look at the inequality that his money creation system has produced.

  4. Quiet Australians aren’t worth their weight in politician sausage.

    They mindlessly vote for policy leveraged against themselves and their loved ones.

    Fxck the pig politicians that run the farm. It’s time to make pork sausage and bacon.

    Eat the elite and make cannibalism great again.

    Only then will these self interested parasites learn the hard lessons.

  5. Government surplus = the government is taxing you so much they end up with more money than they can spend.
    Do we really want that?

  6. whilst i agree with the video's commentary, i wonder if the play of the current government is to setup for a surplus so that when there is a full recession, it can then spend to provide stimulus so that it is the saviour… not to unlike fire fighters setting fires to then put them out. with the attention span of Australians these days and the controlled media, it would not be that difficult to engineer.

  7. The only surplus this clown will get is a surplus of job rejections after he loses his seat, at the bankers table, if you know what I mean!

  8. Saw this coming from the ad man a mile down the road.. it’s buckle your seatbelts tighten them up put your head between your legs and brace for impact, I just put 2 years worth of meat in the freezer with a steer that I need to have a reliable generator tested and ready to crank because our electricity grid has been decimated by (outsourced) power providers deadset on providing dividends for their investors and bugger all for Australians.. but the food I’m eating, the water I’m drinking is what I invested in well over a decade ago.. try getting governments to do that today..I on my property have enough meat fuel water and animal feed to last me for years.. what’s Australia’s fuel capacity 3 weeks ? Veges as well and I’ve planned on climate change with nuts that live in extreme climates pistachios.. instead of air con.. utilising plunge pools.. which don’t need to be expensive just a 22 thousand litre water tank that costs $2400 sunk under a deck.. where you can use the water for vege gardens in the winter..solar powered sand filtration or even with a bio fish system.. and through a hydroponic set up..

  9. "Over promise and under deliver"

    – LNP, 2019

    We'll get a budget surplus come hell or high water. Just watch.
    In lieu of anything thing else- including the economy going well- we will a budget surplus dammit!

  10. Society is debt based, no country can ever pay it off and it goes the same for investors buying house their goal is to be positive cash flow and never pay the loan off.

    Only the poor pay off loans. (excluding personal and credit card debt ofc).

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