Turnbull Government's economic plan in tatters

19 Dec 2016

Today’s mid-year Budget update has confirmed Malcolm Turnbull and Scott Morrison’s economic plan is in tatters, leaving Australia’s gold-plated AAA credit rating at real risk.

Today’s figures confirm that debt and deficits are continuing to blow out, at the same time as the economy is shrinking and full-time jobs are disappearing.

MYEFO shows:

  • Deficits over the forward estimates have blown out by another $10 billion.
  • Since their first budget, the budget deficit for 2017-18 has blown out ten-fold - from $2.8 billion to $28.7 billion.
  • The projected surplus in 2020-21 has shrunk and is now wafer thin leaving us in the danger zone with it comes to the AAA credit rating.
  • Net debt has blown out by $100 billion since the Liberals took office, up to $4,500 for every Australian.
  • A weakening economy that has delivered more than $30 billion in revenue write-downs.  

This is an alarming set of numbers.

While the Turnbull Government is riven with division and dysfunction, Australians are losing confidence in the economy because they’ve lost confidence in Turnbull and Morrison.

The most galling news is that the Government has deliberately refused to lock in Australia’s AAA credit rating and deliver a credible surplus in 2020-21 by rejecting $80 billion of additional savings to the Budget bottom line.

Once again, today the Government refused to drop its $50 billion tax handout to big business or accept Labor’s sensible reforms to negative gearing.

We have an extraordinary situation where Treasurer Scott Morrison is openly telling his colleagues he does not have confidence in his own ability to maintain the AAA credit rating.

The Treasurer is wrong - we haven’t lost the AAA rating yet.  If he accepted an additional $80 billion in savings, it would help lock in our AAA credit rating and deliver more credible pathway to surplus.

If Australia loses its AAA credit rating, there are only two people to blame: Malcolm Turnbull and Scott Morrison.

If family budgets are smashed by higher mortgage repayments following a rating downgrade, mums and dads from across Australia will have the weak Prime Minister and hopeless Treasurer to blame.

Malcolm Turnbull and Scott Morrison are so out of touch they have chosen to give $50 billion to big business rather than protect families from higher mortgage repayments.

The Liberals have failed the tests they have set for themselves: the economy is shrinking, full-time jobs are disappearing and the deficits are blowing out.

They promised “jobs and growth” – but the economic scorecard this year under this government just continues to get worse:

  • A negative quarter of growth, the second worst growth performance in 25 years
  • 46,000 fewer full-time jobs since last December
  • Overseen record underemployment
  • Record low wages growth
  • And they’ve now downgraded their own “jobs and growth” forecasts

In the face of several warnings about the surplus timetable, the projected surplus is now wafer thin in the government’s budget papers, something that keeps us in the danger zone when it comes to our AAA credit rating.  

At a time when it should be working overtime to save our AAA credit rating, the Government has simply waved the white flag on Budget repair.

Labor has led the way when it comes to Budget repair and will continue to display the fiscal and economic leadership Turnbull, Morrison and Cormann have proven incapable of.

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