THIS week we marked the fifth anniversary of Kevin Rudd's solemn declaration that the Howard Government's "reckless spending" must stop. Made in the final lap of the 2007 election campaign, Rudd's pronouncement was intended to buttress his self-proclaimed credentials as an "economic conservative".
Never mind that by April 2006 the Howard government paid off $96 billion in net debt left behind by Paul Keating. And never mind that by election day 2007 the Coalition had put $45 billion in the federal Treasury's coffers as a rainy day fund for the Commonwealth.
Kevin Rudd's words bore no relationship to reality, but that didn't stop his glib lines from playing very well. And his slick rhetoric helped to reinforce the belief of too many Australians that voting in Labor would be cost-free.
It's an iron law of finance that what has been borrowed will one day have to be repaid. By driving Australia into almost $150 billion in debt, Labor has committed a monumental act of intergenerational theft, writes Tony Smith.
Cynics have suggested that the investment strategies of the best Wall Street experts will be outperformed by a chimpanzee throwing random darts at a billboard posted with the New York Stock Exchange Index.
Yet that proverbial chimp is a master sniper by comparison to Wayne Swan and his wild budget forecasts.
Less than two years ago, the treasurer predicted that the Gillard government would run a $12.3 billion budget deficit for the 2011-2012 financial year. (See here, p 322.)
And when the final 2011-2012 figures were tallied up just last month, it turned out that Canberra was $43.7 billion in the red. (See here, p 100.) That's a projected deficit of $12 billion to almost $44 billion over only 21 months.
TWO weeks ago, the House of Representatives standing committee on economics canvassed questions about governance within the Reserve Bank of Australia arising from what has been described as the ‘‘banknotes bribery scandal’’ involving two of the Reserve’s subsidiary companies that produce Australia’s banknotes. These firms are Securency and Note Printing Australia (NPA).
Since May 2009, The Age has published a series of stories alleging that some agents retained by these companies may have used part of their commissions to bribe foreign government officials. I am a member of the House economics committee, the body tasked with parliamentary oversight of the Reserve Bank.
HEAVY-HANDED TAX OFFICE NEEDS CULTURAL CHANGE
The system needs to be fair, stable and predictable
THERE'S the bully pulpit and then there's just plain bullying. And while governments at their best lift us up through inspiration, governments at their worst cast us down through intimidation. For months, the business community has been awash with horror stories about hyper-aggressive and ultra-erratic enforcement strategies employed by an Australian tax office on steroids.
Of course, taxes are the price we pay for civilisation. A taxless world would degenerate into the state of anarchy described Thomas Hobbes in his famous passage from Leviathan: "no arts; no letters; no society; and which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short".
Yet for a tax system to be constructive, it must be fair, stable, efficient and predictable. And it must be remembered that governments generate no wealth, and thus have no money of their own. The dollars in public coffers have all been taken through the coercive power of the state from the businesses and individuals whose hard work and innovation generates wealth, jobs and technological progress.
TONY SMITH MP
SHADOW PARLIAMENTARY SECRETARY FOR TAX REFORM
FEDERAL MEMBER FOR CASEY
Michael Kroger’s comments this morning are very regrettable.
Peter Costello gave our party and our country everything he had in his nearly 20 years in Parliament.
Peter’s economic record and his contribution to the national interest are beyond question.
So too are his character and his honesty.
11th May 2012
Swan's untold story 2012 a space oddity:
Tony Smith says the Federal Treasurer can no longer brush over his past failures with bluster.
In just over a month, Wayne Swan will enter parliament to deliver his fifth federal budget amid a chorus of hallelujahs from the Labor caucus. And on that day, the so-called world's greatest Treasurer will extol the virtues of the so called world's greatest budget produced by the so-called world's greatest government. And if you don't believe it, just ask him.
Yet whenever I hear Wayne Swan big-noting himself, I'm reminded of that famous scene from the Clint Eastwood movie Dirty Harry, with a slight adaptation: "Do you feel better than you did five budgets ago? Well do ya?"
Treading water in sea of red ink as tsunami builds
ONE of my earliest Christmas memories is of the havoc wrought by Cyclone Tracy upon Darwin in 1974.
Trying to make sense of it all, I asked my dad the most pressing question in the mind of any seven-year-old boy -- how could Santa have made his rounds in the midst of such gale-force winds. After assuaging my anxieties about St Nick's safety, my science teacher-father explained the structure of cyclones, placing particular emphasis on the illusory calm within the storm's eye.
We're now in the midst of a different sort of tempest. The financial crisis of 2008 constituted the leading edge of an economic storm that engulfed the entire globe. But then, in Australia at least things appeared to stabilise.
From afar, we have calmly observed a Europe convulsed by riots as debt-ridden governments attempt to stave off insolvency through harsh austerity measures. We have complacently taken long-distance notes on the gridlock in Washington as Republicans and the Obama administration battle over the response to US budget woes.
But it now appears that Australia may have simply been moving through the eye of this ongoing economic typhoon. We may have thought ourselves immune, but we aren't, and it's likely we will soon be engulfed by a second bout of financial turbulence that could threaten the very world as we know it.
Taxing duties put delegates to sleep on the job at Swan's slumber-fest forum.
They came, they saw, they conquered their insomnia, that is. The Tax Forum that Wayne Swan never wanted has ended, not with a bang, but a snore-fest.event.
The televised scenes of slumber were a direct reflection of the Forum's real world significance or lack thereof.
The community and business leaders in attendance out of sheer good manners were doubtless aware of the Forum's futility.
No wonder some participants felt free to catch up on their beauty sleep. But not everyone was going through the motions.
Independent MP Rob Oakeshott appeared quite enthusiastic about the whole event. But then it was his idea.
A funny thing happened on the way to the forum – Wayne Swan's tax forum that is.
After all, the tax conclave that's scheduled to convene on October 4 isn't anything the Treasurer really wanted. It was forced upon him by Rob Oakeshott as a condition for the independent MP's agreement to support the Gillard Government.
Of course, the Treasurer talks the talk of openness and inclusivity. In a recent ministerial statement he hailed the summit as: "An important opportunity for a broad group of Australians to help chart the next steps forward in Australia's tax reform journey."
But actions speak louder than platitudes. While proclaiming his interest in soliciting a wide range of views, the Treasurer has gone ahead and stacked the tax reform deck through unilateral action.
JOINT MEDIA RELEASE
THE HON JOE HOCKEY MP, SHADOW TREASURER
SENATOR MATHIAS CORMAN, SHADOW ASSISTANT TREASURER,
THE HON TONY SMITH MP, SHADOW PARLIAMENTARY SECRETARY FOR TAX REFORM
28 July 2011
SWAN NOT SERIOUS ABOUT TAX REFORM
Wayne Swan’s belated tax summit – now downgraded to a forum - falls short of addressing the critical taxation issues facing Australia and our future international competitiveness.
Mr Swan has been dragged kicking and screaming to establish the long-awaited tax summit, that he had earlier promised the independents would be held by the middle of this year.