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EYE-BALL Guru on – The Great Big Financial Swindle – Part 1 – The ‘Budget Surplus’ Backflip – Swan serves up SenatorWong

December 22, 2012
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Latest GURU Posts:


– 14th Dec – The Walls are crumbling – Government admits High A$ policy is hurting –


– 4th Dec – Retailers and bureaucrats don’t understand – high A$ value responsible for off-shore purchases –


– 19th Nov – Government Expenditures Part I – Department of Prime Minister and Cabinet – DPMC – STAFFING –


– 3rd Nov – Shareholders – Holding back the world – scared money – scared boss’s –


– 31st Oct – Finally – RBA bubble head opens his mouth – He says – $A intervention not needed –


– 25th Oct – Foreign Minister Bob Carr & Wife – An Australian asset –


– 25th Oct – Communications Minister Stephen Conroy – one of Gillard’s Lap-dogs – untrained and unleashed –


– 24th Oct – Climate Change Minister Greg Combet – The Carbon Tax – emissions Trading scheme –


– 24th Oct – Treasurer Wayne Swan – Mini Budget Part 3 – The Clangers keep coming …


– 23rd Oct – Treasurer Wayne Swan – Mini Budget Part 2 – Mortgaging Australia’s Future to appease his ego


– 22nd Oct – Treasurer Wayne Swan – Mini Budget Part 1 – paints a false mirage to protect his legacy –


– 21st Oct – Penny Wong – On the mid-year accounts –


– 16th Oct – The First Home Owners Grant – the fallout and a reflection on a stupid stupid Government policy …


– 10th Oct – Tony Abbott Talks the Talk – but he is on empty when it comes to detail –


To see more GURU posts:

click here …


Title:
The Great Big Financial Swindle -Part 1-
The ‘Budget Surplus’ Backflip – Swan serves up Senator Wong
| Author: EYE-BALL Guru | 22nd Dec 2012 |
INTRODUCTION:

Treasurer Wayne Swan and Finance Minister Senator Penny Wong are currently presiding over the biggest financial swindle in Australia history.   Late last week – some 5 days before Xmas, the Government decided that enough is enough and decided to give themselves an early Xmas gift.

After 2 odd years where Ministers and the like have come forward and stated ‘on the record’ some 200 times that they would return the 2012-13 budget to surplus, it s now revealed it was all another hoax.

They were given many opportunities to back away when the economic data required the Government to reassess – but Gillard and her crowd of misfits sayed the course – this was one policy promise they would not break.  Every other promise had failed and that made this promise all the more important.

It was stated emphatically, it was locked in, they offered to stake their whole Government on this ‘surplus’ pledge – and on the 20th Dec 2012 the Gillard Government rolled over on their promise to deliver a budget surplus in 2012-13.

It was only the previous week when Treasurer Swan fronted the media and swooned over the OECD economic outlook for Australia.   He again repeated the locked-in budget surplus would arrive despite everybody saying is was impossible.

Economist were saying why deliver a surplus when it would generate so much pain to the economy.   This was sense talking and despite all the markets advice – the Government still had the temerity to judge all other wrong because the Government would deliver on its promise of a budget surplus.

This is a monster deal in the Government’s creditability stakes and needs to be fully bought to account – not buried over the Xmas break in an attempt to bury its significance. It is another Gillard broken promise and her Government Ministers who lined up like ducks in a row to sell the surplus who are yet to fully deliver on any promise made since Gillard took over in Jun 2010.

I love tables, charts and stats … when structured correctly and in the context that brings out the honesty in numbers – it becomes the financial ‘gob-smack’ that excites all financial market operatives.

Proving something to yourself that others have tried to gloss-over, hide, distort, or deliberately lie about is the challenge – and what you are about to read is the exposing of this Government, the RBA, and the Treasury Department, and their collusion with one another to produce political outcomes, rather than financial outcomes that serve the Nation.

THE BUDGET SURPLUS:

Senator Wong went on the ‘7:30 Report’ last Thursday night [20th Dec, 2012] – and bold-facely lied to the Nation.

Wong’s performance as the finance Minister handed the ball by Swan to explain about the backflip died a thousand cuts.

[See Wong’s interview in full at the ABC ‘7:30 Report’ website – link here –  link also provides a full transcript of the interview.]

They weren’t lies that you could hang her over – just little white ones used to mis-direct the interviewer and convince viewers that the Gillard Government still had some idea what it was doing in managing the economy.

Using the direct text of the interview – Senator Wong responded –

CHRIS UHLMANN, PRESENTER: “Back in the black come hell or high water by 2013”, “on time”, “as promised” – take your pick. The last three years are littered with Gillard Government pronouncements that it would return a budget surplus this financial year. Question it, even as late as last week, and you were slapped down. Today, five days out from Christmas, the Treasurer announced it was unlikely the financial surplus would be met. It came with the release of Government financial statements that show another $4 billion wiped from revenue projections.

The Finance Minister is Penny Wong and she joins me now from Adelaide.

Welcome.

PENNY WONG, FINANCE MINISTER: Good to be with you, Chris.

CHRIS UHLMANN: Will the Government deliver a surplus or a deficit this financial year?

PENNY WONG: Well as the Treasurer’s made clear today, given the writedown again in revenue in the monthly financial statements that I released today, we’re unlikely to deliver a surplus in ’12-’13. We’ve been upfront about that today, we’ve been very clear about that and we’ve made this decision to be clear as to the state of revenue because we have to put jobs and growth first and we want to continue the responsible economic management that’s seen Australia weather the GFC with a relatively low unemployment rate and continued jobs creation.

CHRIS UHLMANN: But minister, until today, the measure of responsible economic management was whether or not you delivered this budget surplus and this was your measure. Nobody else made you live up to this and you’ve broken it and by that measure, are you not – is your economic management now not in tatters?

PENNY WONG: I disagree. The key to this decision today is responsible economic management. The key to this decision today is jobs and growth. And I think it’s important to remember how we’ve got to this place.

[The 1st Lie …]Since mid-2009 this government has offset every cent of new spending decision – every cent. We’ve taken savings to ensure we could make those spending decisions.

[The 2nd Lie …] We’ve also been confronted by substantial revenue downgrades. Some $160 billion over five years. I mean, just as an example, in the ’12-’13 year alone, if you look back at the 2010 budget when we said we would be coming back to surplus in this year, the revenue downgrade in this year alone is $20 billion.

Now, we have continued to make savings to offset that, but with the release today of this new data, what we’ve said to the Australian people is we’re seeing further revenue downgrade. We don’t believe it’s responsible for us to continue to make cuts to offset this revenue downgrade if that is bad for jobs and bad for growth and that is why the Treasurer’s made the announcement he has today.

OK … dealing with the first lie – the Table 1 below sets out the revenues and expenditure of the Federal Government Budget as presented in the excel spreadsheets from the RBA website – [linked here – monthly datayearly data …]

Data from these tables used with the latest October release of the Australian Government Monthly Financial Statements Oct 2012 – linked here – paint the picture that makes Senator Wong’s statements naive at best, and deliberately misleading at worst.

TABLE 1: Federal Government Budget Revenues and Expenditure growth:

[Click on table Image to open and enlarge in a new window.]

  • Link to Data Table 1: Australian Government Monthly Financial Statements – October 2012
  • Link to data table 2: Table D10: (page 367) – Australian Government accrual revenue, expenses and fiscal balance by institutional sector ($m)

Now in analysing the above Table the following is known –

The Revenue/Expenditure Growth Trends:

  • The PM Howard years – 1996-2007 – showed a growth over the period of 90.15% in revenues, and some 70.18% in expenditures.
  • The PM Rudd years – Nov-2007 – Jun-2010 – his revenue growth factored 21.1%,  against a 51.06% growth in expenditures.  This was the GFC period where the stimulus packages were introduced.
  • THE PM Gillard years – June-2010 – current shows revenue growth of 18.2% and expenditure growth of 11.35%.

Senator Wong in her 1st lie highlighted in the ‘7:30 Report’ text above states …

“…Since mid-2009 this government has offset every cent of new spending decision – every cent. We’ve taken savings to ensure we could make those spending decisions…”

… to counter this statement – to off-set a spending initiative with savings elsewhere to provide the neutral impact on the budget bottom line as Wong highlights above, requires forward estimates on gross revenues and expenditures to be accurate and fulfilled.  To claim that there has been a $20 billion shortfall in revenue estimates is political jargon for ‘we fucked up’ … and in that ‘fuck-up’ the Gillard Government and the Cabinet decided to push ahead with the expenditures.

Nowhere in the Corporate world are budgets worked from a position of expenditure and a perspective that revenues will take care of themselves.   All budgets work from a revenue base and dictate spending based on that revenue – not forecast but actual.  Why can a Government operate any differently …

It is understood that the feast and famine debate allows Governments to run surplus’ in good times and fund the Nation’s needs in tough times.  But in the aftermath of the GFC bailouts – why did the Government continue to rack up record debt in 2010 [$57 Billion] – in 2011 [$51 billion], and in 2012 [$47 billion]?

In answer … Gillard/Swan and their Cabinet team are just political animals trying to impose their socialistic mantra on the rest of the Nation.

If the rest of the world thinks Swan is the ‘Best Treasurer in the World’ – it gives rise to the viewpoint that the ‘rest of the World’s’ money managers are dumber then he – and thus the reason for the GFC to begin with.   Kid you not – we are headed over the same cliff and the time for action to prevent this has passed if this Governemnt is not removed.   Wilkie, Oakeshott, and Windsor are to blame for allowing it to continue and they need to be pressured more than ever between now and the New Year resumption.

As for the 2nd Lie – the reality is that for the period Wong mentions in her statement …

“…We’ve also been confronted by substantial revenue downgrades. Some $160 billion over five years. I mean, just as an example, in the ’12-’13 year alone, if you look back at the 2010 budget when we said we would be coming back to surplus in this year, the revenue downgrade in this year alone is $20 billion…”

… this is fabrication – from 2010 onwards the revenue grew by 7.8% in 2011 and 9.6% in 2012.  Both these numbers represent 6th and 3rd highest in annual revenue growth since 1996.  How can Senator Wong claim that revenue growth was short of expectations without providing evidence from previous budget estimates to verify her claims.  The physical evidence above decry Senator Wong’s statement as an outright fabrication.

The $160 billion downgrades in revenue forecasts – where did she get that number … forecasts are not locked in numbers that allow you to go on spending sprees and incur debt in the expectation that the presumed revenues will take care of the physical expenditure.

Look to the deficit over 2011 and 2012 – some $51 and $47 billion – that represents an $100 billion overspend … and Senator Wong some two years later may say that $160 billion of expected revenues did not eventuate – but that just makes her as dumb as Treasurer Swan …

What fu_kwit goes out there and runs up new policies creating new debt when they know the revenues have stalled … how can Senator Wong say the new policies were revenue neutral … this is almost criminal in its intent, and the only thing that save them from being criminals is that they are too dumb to understand what it is they have done wrong.

Even housewives have a better understanding of income and expenditure and the debt created if one does not dictate spending based on actual income.   All the education degrees and lawyer work history has not taught these dumbfu_k’s a thing.

The Government knew its revenues were growing in 2011 and 2012 – it just spent more than it earned … to cover the new policy expenditures, the growth in revenues for 2011 and 2012 would have had to be 27% in 2011 ans 26% in 2012.

There has only been one other year where revenues grew by that type of number – it was 2008 and that is the only other growth year exceeding the 10.4% in 2005.

In other words – Gillard and her Government were looking for ‘hail-mary’ tax collection to cover their spending policies – i.e. the Carbon Tax and the MRRT.  As financial modeling goes when Treasury assisted with these forecasts – they had to have been blind or wanted to serve their masters to keep their bureaucratic employment.

The Government trusted the forecast numbers and went on a spending spree based on the expected windfalls these new taxes were supposed to generate.  The revenue equation failed and that makes this Government accountable for major frauds on the Australian people.  That fraud has generated a large portion of the $300 billion new debt created since Rudd took charge in late 2007.  That measures about $13,600 for every one of the 22 million people who call themselves Australian.

Have you received $13k worth of benefits from this Labour Government over the last five years?

The rest of Senator Wong’s interview was similarly full of mis-truths in how the Government has arrived at its current position … the doctoring of the reasoning, and political management of the fallout is wrapped up in a Santa Clause gift and his hoped for distraction.

Gillard in her Xmas message mentioned ‘happy holidays’ – not a word about Xmas.  She is an atheist and that sets her us having something else that most Australians will disagree with.   I have no problem with religion and its separation from state – but when Gillard pledges her oath to the Nation every day the House sits – she is being a hypocrite.   The following prayer is read every day the house sits – linked here.

Prayer and acknowledgement of country

The President, on taking the chair each day, shall read the following prayer:

Almighty God, we humbly beseech Thee to vouchsafe Thy special blessing upon this Parliament, and that Thou wouldst be pleased to direct and prosper the work of Thy servants to the advancement of Thy glory, and to the true welfare of the people of Australia.

Our Father, which art in Heaven, Hallowed be Thy name. Thy kingdom come. Thy will be done in earth, as it is in Heaven. Give us this day our daily bread. And forgive us our trespasses, as we forgive them that trespass against us. And lead us not into temptation; but deliver us from evil: For thine is the kingdom, and the power, and the glory, for ever and ever. Amen.

The President shall then make an acknowledgement of country in the following terms:

I acknowledge the Ngunnawal and Ngambri peoples who are the traditional custodians of the Canberra area and pay respect to the elders, past and present, of all Australia’s Indigenous peoples.

Whatever Gillard is – she is not someone that many Australians are able to identify with … she does not believe in marriage – prefers to sleep with married men, motherhood is something she shunned because she wanted to be a politician … well after the AWU scandal – how could she ever have imagined that the AWU heavyweights would support her into the position?

She has a foul mouth, has hijacked the integrity of Parliament by her insistence in refusing to answer questions about her past – the list of oddities with Australian culture and how we see our Leaders is endless from my and many others perspectives … how did she even get to become our Prime Minister?

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Have your say where it counts: – contact your Local Federal Representative via the links below and let them know how you feel about this, or any other topic that you feel strongly about – or you can just post a comment below and let off some steam.


The EYE-BALL Guru …

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  1. Barry M
    December 23, 2012 at 12:13 am

    Thanks for highlighting all of the above. I have been asking commentators at Sky to challenge the Govt over their bullshit story that revenues are down. They are not down on past years, they are down on their ‘guestimates’. I never get a response from Speers or any other muppet in his team. They do not want to know about it because it does not fit their ‘agenda’.
    Anyone can write a budget that shows a profit, Wayne the goose can even do that. It takes a competent organisation that understands and can read the market and then cut its cloth to fit to ‘deliver’ an actual profit.
    It makes you wonder if these current clowns understand the difference between ‘budget’ and ‘actual’
    Rudd, then Gillard and Swan have been hoodwinking the Australian public from day one and the media has aided and abetted them. Along with the so called financial experts, (who are not much better) they have not challenged the Govt face to face or openly over their lies and performance.
    Why are they all scared of this red headed, foul mouthed ratbag and her sycophant Treasurer.

  2. December 23, 2012 at 8:37 am

    To clarify and misconception over the data in Table 1 in the above post – the revenue and expenditure results does not equate to the end of year surplus/deficit … there are cash balances and other end of year type balancing numbers in the RBA data linked above that give the final budget position as appears above.

  3. December 23, 2012 at 8:39 am

    Thanks Barry M – yes I know all about the media and their want to ignore any information that does not suit their agenda …

  4. December 23, 2012 at 12:28 pm

    MP Rob Oakeshott perhaps made one of his most infamous comments last Friday … his comments appear below as reported by Sky News:

    Independent MP Rob Oakeshott wants the government to loosen the purse strings and start a third round of stimulus now Labor has all but abandoned its promised surplus next year.

    Treasury had forecast in October a $1.1 billion surplus for 2012/13, a turnaround from a $43.7 billion deficit the previous year.

    The Finance Department’s latest monthly statement released on Thursday showed cash receipts for 2012/13 so far totalled $111.6 billion at the end of October, down almost $4 billion on expectations.

    The main factor was company tax revenue, hit by profit declines.

    Treasurer Wayne Swan on Thursday said he’d rather ditch the surplus than tighten fiscal policy further and risk local jobs and growth.

    Mr Oakeshott applauded this move but wanted the government to go further.

    ‘Unless there is a bumper summer, unless we really can see some increase in consumer confidence and consumer spending I do think the conversation in the first quarter next year will be one about whether to stimulate the economy with a third round of stimulus,’ he told ABC radio on Friday.

    Labor backbencher Doug Cameron cautioned Australia needed to learn from Europe, where austerity drives had taken many countries’ economies backwards.

    ‘We should not be out there arguing fiscal austerity when there are major parts of the economy still in recession and still not recovered from the global financial crisis,’ he told the ABC.

    Oakeshott’s electorate did really well in Federal funding terms after he did the deal with Gillard – however after the comments above and a willingness to again open stimulus packages he has missed the whole point as to why the GFC hs impacted on Nth Hemisphere Nations … Government debt is killing them and to follow thta path under an Oakeshott cry for more stimulus makes him another dumb motherfu_ker politician with no idea …

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