Tonight we dine in Hell!

I can't say I'm buying it either. Rather, I think the credibility of Ken Henry and the Treasury is starting to look very suspect. And now we have a way of understanding Labor's (and the Lib's effectively it seems) insane carbon tax - imagine a 25% increase in the GST spread across the entire economy.

 

Terry McCrann isn’t buying Treasury Secretary Ken Henry’s aggressive - even abusive - defence of the Rudd Government’s Budget - and its big claims that record growth will soon save us from its record deficit:

Henry & Co are ‘projecting’ growth zooming up to 4.5 per cent in that year, staying up there for the following year, then dipping a bit but staying ‘above trend’ - implicitly around 4 per cent - for the next four years out to 2016-17. That’s to say, six successive years of 4 per cent-plus growth.

 

This is a huge ask, almost unprecedented in the past 30-35 years. Indeed, yesterday Henry reached back - had to reach back? - all the way to the 1960s to justify its reasonableness…

 

There are three huge issues which shred the credibility - if that’s not too generous a word - of his and Treasury’s optimism.

 

Doesn’t he understand the trauma the world has gone and continues to go through? Yes, we might have a global upturn. But there is no way we can go back to sustained global growth of even the recent past.

 

Doesn’t he understand all the stimulus that’s been unleashed to try to mute the global slump and which will have to be unwound? The world faces exactly the same fiscal restraint - except much, much more harsh - that his own budget commits to.

 

And then there’s our own peculiar form of economic flagellation. The carbon tax. In 2012-13, the government is going to impose the equivalent of a 25 per cent increase in the GST, right across the entire economy.

From Andrew Bolt

 

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Just say $300 billion for Christ's sake!

Tony Jones on Lateline tries to get Rudd to say the words "three hundred billion dollars."

 

See how he gets on:

TONY JONES: OK. Let’s move on. What’s the peak figure of the projected public debt in terms of tens or hundreds of billions of dollars in the coming years? What’s the peak figure?

 

KEVIN RUDD: Well, these are clearly outlined in the Budget papers and they’re usually expressed in terms of a percentage of GDP. We peak, in around about 2013, at about 13.8 per cent of GDP.

 

TONY JONES: How much of that is in tens of billions or hundreds of billions of dollars; how much is that?

 

KEVIN RUDD: Well, let me step back in terms of the elements of this. First of all, 70 per cent of our overall position here is determined by a $214-billion collapse in tax revenue. That’s one slice of it.

 

TONY JONES: OK. I understand - we understand that. So what is the figure of peak debt in hundreds of billions of dollars? What is the actual figure?

 

KEVIN RUDD: Well, Tony, I’m about to come to that when I go to constituent parts. About $214-billion comes from a collapse in tax revenue and that is happening right across all the advanced economies across the world. That’s about two thirds of it. Then you go to the remaining third of it, which is made up of what we’re investing in infrastructure and other forms of temporary stimulus. And of that remaining one third of our total borrowings, the largest proportion is made up through infrastructure investment and the smallest proportion is made up through other forms of temporary stimulus. Put that altogether…

 

TONY JONES: But all I’m asking for is one figure.

 

KEVIN RUDD: Well, I’m about to come to that, Tony. I’m taking you to the constituent parts. Put all that together and you’ll see clearly outlined in the Budge papers, that we’re aiming to a gross figure of 13.8, which comes out at about $300-billio). The Liberals have said about $275-billion and then they’ve failed to nominate or to support $22-billion of savings in the Budget, which makes our positions virtually identical. That’s the point I was making.

 

TONY JONES: That figure is $300-billion, is that right?

 

KEVIN RUDD: As I said before, 13.8 per cent of GDP as described accurately in the Budget papers. There’s nothing new about that.

 

TONY JONES: Is there a political spin rule which says the Prime Minister must not say that figure? Because it seems very hard to get you to say $300-billion.

 

KEVIN RUDD: Well, Tony, there seems to be a political spin rule on your part to go back to this time and time again. The Treasurer made this absolutely plain in the Budget papers. I said before the figure was 300 as the Liberals’ was 275.

Jones then gives up. But in the transcript, Lateline adds “billion” after Rudd’s answer of “300”. Just in case you thought Rudd really did mean the $300 he seemed to suggest. 

 

Andrew Bolt

 

Not that K R Puff'n'Fluff ever really suggested $300. But gee, seeing him do everything he could to avoid saying $300 billion was amusing.

 

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St Peter ponders a holy mystery

Costello preys on St Kevin's miracle May 02, 2009   Peter Costello, launching Peter Hartcher's book To the Bitter End in Canberra this week, expresses amazement at The Australian Financial Review's naivety   I AM astounded that the Government, after $100 billion in new discretionary spending since the last election, is briefing to the effect that it is making really hard decisions to save money in the budget. I am even more astounded that this is being seriously reported.   One would think that if it was necessary to save some money then some part of that $100 billion would not have been spent in the first place.   But obviously I don't understand these things.   That realisation dawned on me when I read the front page of the Easter edition of The Australian Financial Review which read as follows: "Rudd's big Easter surprise -- spending and saving at the same time." You can both spend and save at the same time? This truly is a holy mystery. I thought of it over Holy Week. It is something that I will dwell upon for a long time.   http://www.theaustralian.news.com.au/story/0,25197,25414953-20261,00.html

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