A damning new report out overnight has torpedoed the Liberals’ economic credibility less than three weeks from Malcolm Turnbull’s make-or-break Budget. 

The IMF Fiscal Monitor shows that government debt as a percentage of GDP has blown out substantially in Australia under the Liberals, but has fallen as an average among advanced economies.

General government gross debt as a percentage of GDP has climbed in Australia under the Abbott-Turnbull Government but decreased in other advanced economies, including the United States, New Zealand, Canada, Germany and the G20 as a whole.

It’s no wonder the Liberals no longer talk about a Budget emergency when, on their watch:

• net debt has doubled since 2013
• gross debt has crashed through half-a-trillion dollars for the first time ever with no peak in sight, and
• both kinds of debt are growing faster under this Liberal Government than under Labor.

When it comes to the Budget, the Government has benefitted from far better global conditions compared to Labor, which had to contend with the sharpest synchronised downturn in the global economy since the Great Depression.

With these big blowouts in debt, the worst thing to do is give tax breaks to the top end of town, including a $65 billion tax cut for multinationals and the big banks.

The IMF made it clear in the report now was the time for “strengthening fiscal buffers” to prepare for another downturn, and urged:

“All countries should promote inclusive growth to avoid excessive inequality that can impede social mobility, erode social cohesion, and ultimately hurt growth.” (p. xi)

Labor has a plan to structurally repair the Budget in a fair and responsible way by cracking down on tax breaks for those who need them least.