Portfolio Media Releases

GOVERNMENT ANNOUNCES BIGGEST BUDGET DEFICIT IN MODERN AUSTRALIAN HISTORY

29th September 2009

GOVERNMENT ANNOUNCES BIGGEST BUDGET DEFICIT IN MODERN AUSTRALIAN HISTORY

29 September 2009

Today the government announced the final outcome of the 2008-09 Budget which showed an underlying cash deficit of $27.1 billion.  This is the biggest federal budget deficit in modern Australian history.  It represents over $1,200 for every man, woman and child in Australia.

The $5 billion improvement in the underlying cash balance since the May Budget papers was primarily due to stronger company income tax receipts.  It was not in any way due to spending restraint on behalf of this big spending government.

Contrary to Wayne Swan’s claims that the global financial crisis has taken a “wrecking ball to revenues” year on year revenues are down $4.8 billion out of a total revenue base of around $300 billion, representing a decline of just 1.6 per cent.  This is in contrast to expenses which are up $44.5 billion, an increase of around 16 per cent over the year (see table attached). 

It is the government’s reckless spending that has delivered this massive deficit.

The Reserve Bank has indicated that interest rates will soon begin to rise.  Given the better than expected economic circumstances, it is clear that the Rudd government could reduce the need for interest rate rises by showing some spending restraint.

This government is not prepared to do this.  They are spending to benefit their own political interests and not for the economic benefit of all Australians. 

Australian household and corporate borrowers will pay higher interest rates because of this government’s reckless spending.

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