Labor Waste

For all its flaws, there is one thing this Labor Government can be proud of – a cohesive ability to ignore the reality of its spending addiction. 

I applaud every Labor Member of Parliament who has successfully stood in front of a camera and said with a straight face that Wayne Swan is a good economic manager. 

It must be tough, because a close look at the Budget’s spending column clearly proves otherwise. 

If you believe Labor, they have done all they can to rein in spending.  The Prime Minister claimed there would be a “tight rein on spending” and Wayne Swan said there was a “very tight fiscal policy in place…” 

The obvious contradiction between this rhetoric and reality is the budget’s worsening debt and deficit position.  Labor blames it on a steep fall on revenue.  But revenue forecasts alone cannot explain why debt continues to increase (rising to $107 billion by 2014/15) and why the forecast deficit in 2011/12 has blown out by $9.6 billion to $22.6 billion. 

At the height of the financial crisis, Treasury predicted a $170 billion fall in revenue over the forward estimates, outlined in the 2009-10 Budget.  This fall in revenue was going to impact heavily on the bottom line, resulting in deficits totalling $191.3 billion. 

But looking at figures documented in last month’s budget, it is clear revenue fell $121.7 billion over these years, an improvement of $50.3 billion. 

Despite this improvement in revenue figures, the accumulation of deficits has reduced by just $37 billion, to $153.8 billion.

In other words, the improvement in Government revenue is not reflected in an improvement in deficit numbers. 

Why? Because spending has increased.  Labor is addicted to spending and the figures outlined in the budget’s spending column prove it. 

Labor has increased spending by $85.7 billion since the last year of the Howard Government.  By 2014, this will increase to $134 billion. 

For all of Labor’s rhetoric, spending will still be higher as a percentage of GDP in 2014-15 than it was in 2007-08.  Currently it is almost 2 per cent higher. 

Just in the last six months, projected spending for 2011-12 has increased $3.8 billion, from $362 billion to $365.8 billion. 

In fact, spending has increased by $17 billion since May 2009.  This is after Labor’s stimulus packages are included. 

Clearly, this ‘tight fiscal policy’ claim does not match the reality of these figures. 

Furthermore, of the $22 billion in savings Labor claims to have made, a third of it is made up of new and increased taxes and they will spend $19 billion of it on other things.

In fact one of the biggest ‘savings’ of all was the $1.7 billion flood levy. 

The debt and deficit situation is not because of the financial crisis or crippling revenue streams.  It is not because the government inherited some terrible budget situation – actually quite the contrary.  It is because Labor has spent too much money and continues to spend too much money. 

Labor’s wasteful spending programs – pink batts, school halls, green loans – are well documented.  There are no better examples than these programs to demonstrate how well Labor can waste money. 

But even after these programs are accounted for, the Government continues to increase its spending. 

They continue to make bad policy decisions (think border protection) that make matters worse. 

We have seen the greatest growth in real spending under this government since the disastrous Whitlam years.  That is the reality. 

Despite the rhetoric, they cannot make hard decisions.  They have failed to rein in spending.  It is time Labor started taking responsibility to the ever increasing figures in the spending column.

Do you have your own story of Labor's waste, inefficiency and mismanagement of taxpayer's money? Hold them to account and tell us on the Tip-Off page.