Garth’s posterous

Bent in a kinda straight way 
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May 19, 2009

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.
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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.
 

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Filed under  //   federal budget   government debt   Ken Henry   Kevin Rudd   the deficit   the treasury  

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May 2, 2009

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.
 
 

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Filed under  //   finance   Kevin Rudd   Peter Costello   the deficit  

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April 24, 2009

I'm a defence hawk, but...

How exactly are we going to pay for Australia’s biggest military build-up since World War II, now that we have blown the surplus and gone so far into debt already?
 
"Kevin Rudd has already announced $100 billion in extra spending, just when his tax revenues have gone through the floor and the national debt will exceed $200 billion."
 
I fear that if we keep going like this, we'll end up like Great Britain. A country who's own central bank has said has effectively run out of money.
 
"After the budget laid bare the country's record pound stg. 175 billion ($360billion) level of debt and introduced a 50 per cent top rate of tax, a think tank said yesterday it would take more than 22 years for the public debt -- which Mr Darling forecast would balloon to nearly 80 per cent of national income -- to drop back to 40 per cent. The Institute for Fiscal Studies warned that the country should brace itself for "two parliaments of pain" as the Government scrambles to repair the damage caused by the financial crisis and the resulting pound stg. 90billion-a-year black hole in its coffers."
 

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Filed under  //   defence   finance   the deficit  

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