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EYE-BALL’s Guru on – Wayne Swan’s “Treasury Mistakes” – The Evidence of Incompetence – a Ponzi expert in the making.

May 12, 2013
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Latest GURU Posts:


– 10th May – Wayne Swan’s “Treasury Mistakes” – A Follow-Up


– 29th Apr – Wayne Swan’s “Treasury Mistakes” – Heads must roll – Swan and Bradbury must accept responsibility’ –


– 23rd Apr – Wayne Swan’s – “Investment pipeline” – disappearing before his eyes – where does he go for his next ‘bunny excuse’ –


– 21st Apr – Wayne Swan’s legitimacy – He Says … ‘high A$ causes $7.5b hole since Oct ’12’ – He’s a unique type of idiot  –


– 14th Apr – The Debt Clock ticks … Tic Toc … – Gillard just spent another $3,000 – counting the real cost of this ALP Disaster –


– 5th Apr – Superannuation 2013-14 –  the Government’s new Slush Fund – Proposed Changes show SWAN and SHORTEN’s stupidity –


– 4th Apr – Australia’s Parliamentary Remunerations –
– Part III – Superannuation – The Future Fund –


– 3rd Apr – Government not happy about its tax collect – Claims Tax Minimisation deserves ‘Naming and Shaming’ –


– 31st Mar – The Cyprus Bail-out


– 31st Mar – Australia’s Debt – and the idiots Managing the Treasury –


– 20th Feb – Australia’s Parliamentary Remunerations – Part II – Entitlements and Allowances –


– 13th Feb – Australia’s Public Sector Remunerations Part I – Parliamentarians “Base-Salary” and “Additional” entitlements –


– 31st Jan – The Devil is in the Detail, there is none – Gillard chooses shock, awe & Spin over Policy –


– 23rd Jan – The Turmoil is Already here – We just have to accept what is coming –


– 22nd Jan – The Turmoil is beginning – Japan’s Economic Stimulus to tip the scales –


To see more GURU posts: – click here …


Title:
– Wayne Swan’s – “Treasury Mistakes” –
– The Evidence of Incompetence –
– A Ponzi expert in the making –

| Author: EYE-BALL Guru | 12th May 2013 |
Link to all Post in Series:


This post has been edited 13th May 2013.

The RBA produce a spreadsheet of Federal Budget expenditures and revenues  on both a monthly, and annual basis.  Link to these spreadsheets provided here.

Extensive extraction of the data allows a full disclosure of the 2012-13 Swan budget.  That research is further produced below.

Financial analysts working for media outlets have the same information as do the countless Bank and other Financial Institution Economists.  These ‘plebs’ or would be discoverers number crunch every day looking for the dark holes in financial reports.

The Federal Budget is the biggest game in town – and yet the void of challengers prepared to call Treasurer Swan out as fraud and liar number so few.

The collective voice has been to allow the Government to sell its ‘revenue write-down’ message whilst those who would and should oppose appear content.

As with the 2013-14 and every other Budget before, Journalists are locked away in the days before the Budget speech with their expert number crunchers and given free rein to do their analysis ahead of the Treasurer speech.

Nobody pays any attention to the full Financial statements – all the attention is on the cash flows and the bottom headline line number outlining whether it be a surplus or deficit.   The tweaks within the budget impacting taxpayer ‘gives and takes’ are the other half of the story.

This author has skills in this type of research and the data represented hereto is an honest appraisal of the facts available, and with the use of some basic logic, and applying some human instinct, and behavioural expectations, the summaries and outcomes made hereto have foundation.

Up first – Treasurer Swan deliberately mislead the House in his 2012-13 Budget forecasts.   He stood and announced a set of numbers he knew to be false – i.e. revenue expectations, and all to a purpose to allow the Government to live the fantasy they delivered on the 2010 promised budget surplus for 2012-13.  The House jeered Mr Swan when he made his speech – see YouTube link here.

Treasurer Swan gave an increased revenue forecast of 11.23% over the previous years than unconfirmed growth of 9.11%.   The 2010-11 forecast number was an overreach as well missing its target by some $12 billion – see Revenues Table below.

Trend growth before these numbers and since 1997 was 6.6%.   Why would Mr Swan predict revenue growth year on year above a 15 year average trend growth?

The only other time since 2000 where revenues have increased anywhere near or above the forecast 9.11% predicted in 2011-12, happened in Howard’s term during 2005-06 when the forecast was 10.48%, and again in 2007-08 when it was almost 27%.

That 27% remains double any previous years best performance.  See link here to see Table to prove these numbers.

New Revenue and Expenditure Tables below compare ‘actuals’ and ‘forecast’ budget numbers.

Revenues:



[Note – the 2012-13 ‘Actual’ number – i.e. $17,000 – is derived from Finance Minister Penny Wong’s statement during last week that the budget revenues will be down by $17 billion. This has been taken at face value and used to provide a 2012-13 number for the series.]

This Table presents Forecast Budget Revenues as declared every May for the following Financial year, and then measures that forecast against the actual reported result.  These results report from 2001.

As can be seen, under Howard revenues always exceeded forecast, but under Labor, revenue forecast always exceeded actuals except for the 2009-10 year.

In fact – during the Howard years the forecast verses actual provided windfall revenues of $88.8 billion from 2001 to 2008.  Yet – the ALP record since 2009 shows revenue shortfalls in the same context of  $59.2 billion.

Swan has overestimated revenues every Budget he has delivered and wants us all to believe the 2012-13 failed surplus is yet again because of revenue writedowns because of the high $A and the effects of the GFC.

Mr Swan excels in his magicians ‘rabbits in a hat’ and ‘jokers’ he pulls from his deck of card trick.  He often confuses himself with his interchangeable reasoning.

Expenditures:

Under this ‘Expenditure’ Table extraction – both Howard and the ALP Government’s allowed actual expenditures to exceed their forecast values.

In Howard’s era from 2001 the total spend excess value was $56.7 billion, and under the ALP since 2009 the value is $46.5 billion to the end of the 2012 year.  The 2012-13 number is not available but according to announcements, it is expected to be near forecast values.

The Carbon and Mineral Rent Resources Taxes:

Carbon Tax:

The Carbon Tax came into law as the Clean Energy Future Legislation in Dec 2011.   See Legislation link here

This new Tax had the following agenda – and as paste from AustralianPolitics.com – [Note … this resource has publicly advised that it is closing down and all links used from the source will be broken.  In that light, the text in the above link is pasted below. The media statement referred to is no longer available on the Greg Combet Media Release statement library.]

Carbon Tax Legislation Becomes Law Dec 09, 2011

Royal Assent has been given to the Gillard government’s Clean Energy Future legislation.

The legislation, a package of 21 bills, introduces a carbon tax and associated measures.

Text of media release from Treasurer Wayne Swan, Climate Change Minister Greg Combet, and Families Minister Jenny Macklin:

Clean Energy Reforms Receive Royal Assent

The Gillard Government welcome the Royal Assent of a further 21 bills of the Clean Energy Future Legislative Package and the proclamation of their commencement dates.

The completion of this process means that the Government has the central legislative pieces in place to deliver a clean energy future for Australia.

The Clean Energy Act 2011, Clean Energy (Household Assistance Amendments) Act 2011, Steel Transformation Plan Act 2011 and Australian Renewable Energy Agency Act 2011 and 17 related bills have all now received Royal Assent.

The Carbon Farming Initiative and Australian National Registry of Emissions Units commenced operation yesterday, after those acts received Royal Assent in September of this year.

The administrative provisions of the Clean Energy Act 2011 will commence on 2 April 2012, meaning that the Clean Energy Regulator can start operations to prepare for the introduction of the carbon price on 1 July 2012.

These laws will drive a fundamental transformation of the Australian economy and provide support to low and middle income households as we cut pollution and continue to grow our economy.

With the formal commencement of the national registry, Carbon Farming Initiative and the certainty provided by these acts, clean energy investment and the further development of carbon markets in Australia can begin in earnest.

Australia’s Clean Energy laws will deliver the following:

  • A carbon price of $23 per tonne will apply to around 500 of the nation’s biggest polluters from 1 July 2012;
  • The carbon price will transition to a flexible price cap-and-trade emissions trading scheme on 1 July 2015, linking Australia to international carbon markets;
  • The tax free threshold from 1 July 2012 will be tripled from $6,000 to $18,200, freeing up to a million people from having to lodge a tax return;
  • There will be payment increases for pensioners, equivalent to a 1.7 per cent increase in the maximum rate of the pension. There will also be similar increased payments for other government payment recipients, including eligible families, self-funded retirees, students and job-seekers. These payments will total around $7 billion in the period to 1 July 2015;
  • The Jobs and Competitiveness Program will support our emissions-intensive trade-exposed industries and help them to reduce their carbon and energy intensity;
  • The $300 million Steel Transformation Plan will support our steel industry;
  • The Energy Security Fund will provide assistance to the most emissions-intensive coal-fired generators, support energy security and help transition to cleaner energy;
  • An independent Climate Change Authority will be established on 1 July 2012 to advise on pollution caps and climate change policies, taking into account Australia’s legislated reduction target of 80 per cent below 2000 levels by 2050.

These measures will drive substantial reductions in the carbon pollution of the sectors they cover. The Government expects reductions by 2050 of 90 per cent of expected waste emissions, 76 per cent of expected electricity emissions, 62 per cent of expected fugitive emissions and 53 per cent of expected industrial process emissions.

The first household assistance payments will be made in May and June 2012, to help households get ready for the modest impact of a carbon price.

The initial Clean Energy regulations covering the landfill waste prescribed distance and applications for the Energy Security Fund have now been made.

The provisions of the Climate Change Authority Act 2011 to formally establish the Land Sector Carbon and Biodiversity Board commenced today.

In 2012, the Government will add the Clean Energy Finance Corporation (CEFC) to this legislative framework. The $10 billion CEFC will invest in commercialising clean energy projects, unlocking significant new private investment in renewable energy, low pollution and energy efficiency technologies.

… can still be read on-line at: Wayne Swan’s Media Release library

Noise … Noise … Noise …

You read the ‘Clean Energy’ promised spends right … Greg Combet believed in everything he was saying on that night and would never have entertained a view would turn out to be mostly fairy tales, all made up to sell a new tax to create a revenue illusion.  A tax that has no direct benefit in the global warming hoax,  a tax that was hatched on the back of the alarmist theory to the global climate change phenomena engulfing the globe.

Combet is now knee-deep in his own ICAC inquiry into his relationship to disgraced former NSW Resource Minister Ian MacDonald.   Combet’s demons are coming back to haunt him.  see story here …

The forecast Carbon Tax  revenues were estimated as: Source linked here

  • 2012-13 = $4.010 billion
  • 2013-14 = $6.640 billion
  • 2014-15 = $7.340 billion
  • 2015-16 = $6.750 billion

The forecast revenues from the Carbon Tax across the forward estimates amount to almost $21 billion from 2013-14.   Mr Swan is now using these numbers to justify revenue writedowns across the forward estimates.   Talk about floating a boat …

The forecast MRRT and PRRT revenues i.e. Resources Rent taxes were estimated as:  Source linked here

  • 2011-12 = $1.463 billion
  • 2012-13 = $5.400 billion – MRRT commenced.
  • 2013-14 = $6.400 billion
  • 2014-15 = $5.630 billion
  • 2015-16 = $6.620 billion

These forecast revenues from the Rent Resources taxes across the forward estimates amount to almost $18.5 billion from 2013-14.

Combined with the Carbon Tax forward estimates, this makes a total of $40 billion of lost revenue across the forward estimates.   That represents 50% of the $80 billion Mr Swan claims has gone missing across the forward estimates.

Can it be said that the forward estimates were inflated in the first place?

That Mr Swan was creating a false set of numbers so he could deliver a promised budget surplus?

And if that be so – that then leads to the allegations that Mr Swan mislead the House on Budget night in his Budget estimates and deliberately so… the only other explanation can be that gross incompetence was involved – and yet he is still the Treasurer.

The Carbon emissions trading scheme was to be introduced with a floor carbon price of $23/tonne.  In the last week Combet announced the abolishment of the promised tax concession worth $1.4 billion that came attached to this scheme.  Link to media release

All the future promises made as outlined in the Clean Energy Bill media released published above are all now doubtful, with exceptions for those already paid, and/or already locked into future benefits payments.

With all the ‘mendacious’ pomp and ceremony Combet used to promote the Carbon Tax and its Emissions Trading scheme, and the ‘mud-in-you-eye’ slurs aimed at the Opposition, will Combet now eat his ‘humble-pie’ and line up for the free shots aimed at him?

Budget Forecasts:

Let’s face it – crystal ball forecasting is all Treasury estimates can offer given the global economic turmoil we and the rest of the world are dealing with.

That is not to diminish the Government’s responsibility in any way to deliver honest Governance.  How dare they hide behind what they do not know.

If the future is uncertain on any scale where revenues are circumspect, surely the prudent and responsible thing to do is the practice restraint and try to encourage the same with the electorate.   You do remember the 40% pay increases the Federal Government all voted themselves after Gillard ousted Rudd in 2010?

Previously Rudd had imposed a freeze on Parliamentary pay increases.

Decades of Government’s getting into power based of election promises and once there,  applying a different set of policies and rules to stay in Government is the cause of the GFC in the first place.

Prime Ministers come and go as do Treasurers and the like, their mistakes remain for the next lot to fix and the likes of Gillard and Swan get to walk off into the sunset on lifetime pensions we can only dream about.

If the Government were to have the same accounting and prudential standards as public listed companies, and the electorate were the shareholders, the shareholders would have receive no dividends since Labor took office.  In addition they would have had to top up their shareholdings with new equity to cover the ‘deficit(s)’ and the new debt created  as a result.

Under Howard’s 11 years in office – those same shareholders would have received dividends each and every year.

This is the measurement of the competence of this ALP Government in a business like assessments.  They SUCK!!! 

In fact – the laws Swan and his minions have broken in corporate fraud terms would see them off to serve some serious time.   The reality – $300 billion of gross incompetence … that’s 300 times what Madoff ripped from his clients.

Many of the projected offsets from the Carbon Tax have been implemented before the revenues came home or were verified.

The same with the MRRT and as those mistakes came home to roost, and became a reality for Gillard and Swan to deal with, all that could be done was to inflate the revenue numbers as a fraud to cover up the broken promise of a budget surplus for 2012-13.

Those who understood what was afoot mostly stayed silent or were no heard, and that would have included many Treasury bureaucrats who were a part of the number output.  They would have known every time Swan fronted the media he told porkies, as did every other Minister, MP, and Senator trying to sell Swan’s fanciful reasoning about revenue writedowns.

Technically – to say there were revenue shortfalls as measured against the forecast revenues is correct – but in the context of a larger responsibility, a forecast revenue inflated so as to justify expenditures, and election promises,  is as big a fraud as there is.   Swan has facilitated a climate where they have run the Nation into the ground with expenditures they knew could not be paid for from existing revenue collections.

The MRRT:

See ‘Guide to MRRT’ published by Hawker Britton here.

Treasurer Swan and his fellow Ministers have presented the shortfall in tax collections from the MRRT as a result of an economic slowdown.  He claims that the tax is a ‘profits based tax’ and that the mining industry is facing harder times then the Government expected.

Poppycock!!!

The MRRT was a tax grab to fund expenditures – the States own the mining royalties and the Federal Government wanted a slice of the pie.   There is still a legal challenge before the High Court on the validity of the MRRT and whether it has purchase up against the States constitutional entitlements.

The forward estimates from this Tax have been shown to be a sham from the first quarter collect in Sept 2012.   Already this year,  [2012-13] the shortfall looks like being $2-3 billion against the budget estimates.

It has been revealed that to placate the Mining Industry campaign against MRRT mark 1 under Rudd, Gillard used the issue to oust Rudd and did a deal with the miners that made the tax collect impotent.   It was doomed by the Legislation from the outset yet the Government kept the forward estimates in place.

What would be the Government’s Motives to lie:

The revenue table above proves that the ALP have overstated their budget and forward estimates well above trend growth of 6.6% for the period 1996-2008.

The reasons are obvious – from 2010 Gillard and Swan made promises about returning the budget to surplus by 2012-13, and when the new Carbon and MRR taxes failed to provide the forecast buffer revenues needed to fulfil those promises – they had to make a decision to either come clean about the promised 2012-13 surplus, or fudge the revenue numbers to create the illusion of a budget surplus.

This is evidence by the increased revenue forecast growth year on year from 2011-12 at 8.74%, itself well above the trend growth of 6.6%, to 11.23% for 2012-13.   With this growth forecast, Swan was able to announce the small $1.5 billion surplus in May ’12.

That decision created a fraud about the budget revenue position and the Government used this lie to cover its promised budget surplus for 2012-13.  It was a fraud upon the Australian people.  That fraud is still on-going today and more will be added on Tuesday during Treasurer Swan’s 2013-14 Budget speech.

Some further evidence to support this theory is provided below.

The 2012-13 Budget Speech May 2012:linked here

Spending Savings:

A headline feature in Swan’s Budget preamble for the 2012-13 Budget was a forecast savings in expenditures across the forward estimates.  The chart used to highlight these savings in the Budget Papers appears below:

The commentary produced with this chart can be read in full here – but states in part:

Targeted spending cuts

In returning to surplus the Government has ensured the budget is in good shape over the long term while maintaining our commitment to fairness and improving skills, health and education services.

Ensuring balance

We are returning the budget to surplus through targeted spending cuts, which retain fairness, place the budget on firmer ground and achieve better value for taxpayers’ money.

Over $33.6 billion in saves have been identified in this Budget with less than half being tax. This builds on the over $100 billion of savings we identified over the last four Budgets.

In making these decisions we have applied our core values of protecting the most vulnerable in our community and the frontline services Australian families rely on.

We remain committed to providing the skills for tomorrow’s workforce and continuing to improve our health and education systems.

By focusing on fairness and value for money the Government has been able to prioritise spending to people most in need… continues …

Nothing in this statement makes any sense when comparisons with the forecast numbers produced in the 2012-13 budget are analysed.

If Mr Swan claims to have made $33.6 billion in saves … would that not generate an expenditure downgrade of a similar amount in the forward estimates?

The forecast expenditure growth for 2012-13 over the 2011-12 Financial years only reduced by 0.39%, or $1.466 billion.  That would mean that after having trimmed/identified $33.6 billion in savings, the Government went and spend all but $1.466 billion on other new policy initiatives.

What creditability can Swan claim after finding savings but decided to spend it elsewhere?

2012-13 Budget Overview:  linked here

This Overview is 40 odd pages of expenditure highlights and one or two pages of revenue explanations – a summary where revenues have been tweaked to pay for the expenditures.

This again provides evidence that Government’s focus is all on the expenditures trying to sell the electorate about the extra ‘goodies’ they will receive in their pay packets.

The ‘bad’ news in how those ‘goodies’ are to be paid for is something all Government’s want to play down.  This is the politics and as a factor in any equation, the factor used is what makes the formula look good or bad.

In this instance that factor used is the propaganda and it has become of greater importance than any reality attached to the hard numbers.

Tax Revenue as a % of GDP:

In the 2012-13 budget papers a chart was used to show Australia’s low rate of tax revenues to GDP ratio.  Linked here …

The linked chart appears below: – [click to enlarge in a new window.]

What the chart does not tell you is that all State and Local taxes imposed in this Nation are not included in this chart, a propaganda mis-direction that works every time because nobody asked the questions.  See reference here …

Nobody is ever going to paint themselves or use data that portrays them in a bad light.  One has to go looking for the mistakes, the holes, the cover-ups and that is what our Media are charged with.

We are a Nation of blind idiots and continue to accept what our Leaders tell us all the time.   Those who should know better have become apathetic to their responsibilities. This allows the likes of Swan and Bradbury to roll out their agendarised version of what the Government wants us to believe.

We deserve every thing that a Government does during its term in office – when is the watchdog watching the watchdog, who in turn is also watching the watchdog so to speak, going to expose the truth.

GDP Growth:

Another angle or perspective is to look at long-term GDP growth – see chart pack below – Source Trading Economics[click on charts to enlarge in a new window.]

Between the 1990 figure of $305 billion, and the 2004 number of $455 billion, we see a growth rate of near 50% over 15 years.   By comparison, we’ve seen GDP grow to $1.37 billion by 2012 according to ‘Trading Economics’ updates, and we know that the RBA has the GDP number at $1.45 billion at the end of 2012, that represents some 300% growth in the last 8 years.   That growth had to come from somewhere!!!

The only economic events of importance during that 2005-2013 period were the continuing resources boom, the GFC, and the stimulus supplied by the Federal Government post GFC.  Look to the growth acceleration post 2008 when the Governments stimulus started.

On this basis alone – it can be argued that this GDP growth as another example of how Government spending influences crucial and relevant economic indicators.

By comparison, the USA and other Trading partner GDP growth rates for the same period are exemplified in the following chart pack:

 

Canada:

About the only Nation with a similar chart structure, if not the same growth percentages.

The UK:

Japan:

China:

By far a chart with extraordinary growth numbers. No wonder Australia survived the GFC and then that poses the question – why the continued stimulus spend into 2010 and beyond?

EuroZone

These comparisons re all Northern Hemisphere verses Southern hemisphere, and explain the reasons how Australia survived the GFC – China’s growth alone provided us with GFC insulation.

No other western Nation has GDP growth like Australia and it is hard to fault the Government on that point.

Given the cost of the high A$ and its impact on revenues and economic downturns in all Industry, jobs, and infrastructure, where does one look to find reasons for the exponential GDP growth?

It can only be Government debt induced – and that is not what an economist would call genuine growth.

Inflation Index:

It’s been a long-held belief that the ‘inflation’ index as used to spike annual Government budgets,  is also used to ensure the economy moves forward in GDP terms.

Yet the inflation CPI index is the barometer used to measure the strength of the economy and what feeds from that drives every other economic indicator.

In other words it’s a ‘loop’ equation, without one i.e. the positive CPI – the economy would stall and all Government revenues would also stall and fall away – commonly referred to as ‘deflation’…

All commerce is a supply and demand equation – inflation indexing just gives the right to increase as a part of the loop equation.  If supply is abundant you would think prices would come down – this happens in produce in seasonal terms, yet in Labour terms when unemployment grows, the response should be cheaper labour costs.

When Government services are cut and staff laid off, those staff without jobs would surely work for the Government at a lesser cost then the staff who were not laid off.  This should bring wage cost dow in a true and free market.  But – the Unions enter the equation here and in coming years you can expect immense pressures on wage costs as Australia’s competitiveness with the rest of the world erodes further – another by-product of the high A$ policy.

The point being – the inflation index is not a true nor realistic economic indicator in free market terms.  Yet – the Government’s use of it to frame year on year Departmental Budgets creates the illusion they have to increase budgets, pensions, and the like in tandem to the CPI increases.

This view is truly a black and white view and not so much applicable or tried in any modern economy.     Modern economics is in disarray because of the GFC and its destruction to forecast modeling.

If the revenue side of Governments budget is derived from a multiplier of the targeted inflation forecasts,  then again multiplied out across the forward estimates using a variable multiplier, how can a forecast be treated with any accuracy?

Any public listed Company, or medium to small business who produced budgets like this would have their shareholders and Bankers sacking CEO’s and the Board.

Revenues are where all profit based business’ operate from.  Why is it different for Governments?

Opposition Creditability:

The research on display hereto is available to anyone interested in exposing Swan’s Budget lies, and to that point, why is the Opposition spokesperson Joe Hockey,  unable to land any real blows against Swan.

Me thinks that the Opposition Treasury understanding and knowledge base is challenged in theory and conditioned by the same Treasury modelling in trying to find real fault with Swan and his Treasury performance.

It might be because they don’t what to discredit Swan too early before the election and let some new Treasurer they don’t know run the show – hardly.

I can advise the Opposition there is nobody on the ALP side who could do the job, and if Swan is the best of them,  Australia deserves everything Swan leaves as an aftertaste when he exits.

Best Treasurer in the World – ha … a gong awarded by overseas investors who have had their siphon hoses plugged into Australia’s wealth for the last 10 years.

Swan lives in a fantasy land:

Swan gave an interview with Laurie Oakes Sunday morning.  That interview can be read in full here… and in part Swan responded as pasted below:

OAKES:

But a year ago you budgeted for a surplus of $1.5 billion.

TREASURER:

That’s right.

OAKES:

Now wwe are now facing a massive deficit, rather than a surplus. The Fin Review says $17 billion. Is that close?

TREASURER:

Certainly $17 billion [write-down] in 2012-13, and the nature of the revenue write-downs do spread across the forward estimates. But I was faced with a choice, the government was faced with a choice. We could turn around in the face of those revenue write-downs and cut to the bone, slash spending right now and hit jobs, and push up unemployment. Or, stand up and explain to the Australian people that our number one priority is to support jobs and growth, and that’s what I’m doing…

OAKES:

Just about everybody said a year ago that you were mad, that you couldn’t achieve it.

TREASURER:

I’m sorry, that’s not right. There is no credible economic forecaster who predicted this nature of revenue write-down for this year, or across the revenue estimates. Can I just explain why? What we have had happen in our economy in the last three quarters of last year is that nominal GDP growth for the first time in 50 years has fallen below real GDP growth [for three quarters]. We also had a situation where the Australian dollar remained high, when the price of our exports fell – something that has never happened before. The combination of those factors is what has hit all of the profit-based taxes in our revenue lines, and are resulting in these revenue write-downs. And Laurie, that wasn’t predicted by any serious economic forecaster last year.

OAKES:

Joe Hockey predicted it.

TREASURER:

Well Joe Hockey’s always always out there preaching doom and gloom…

OAKES:

He’s been proved right.

TREASURER:

No, he hasn’t been proven right. Our economy is among the strongest in the developed world. But what has happened in the past year is that our revenues have been hit. The responsible course of action when faced with that is to support gobs and growth. So I stood up last December and said it would be unlikely that we would come back to surplus in 2012-13. At that stage, the revenue write-down from the mid-year budget update of $4 billion had been achieved over the first four months of the financial year. And as we’ve gone through this year, the revenue write-downs have got larger and larger, and at every stage of that process I’ve informed the Australian people about what has been happening, and I have taken the responsible course. I’ll take my medicine; I’ll accept the politics of this are very uncomfortable. But getting the big economic decisions right to support Australian jobs is what people expect of me, no matter how uncomfortable that is politically.

… continues …

Oakes nailed him, skinned him, all but pissed on him … and Swan sat there and kept telling lies … and they say there is no crime in a Politician telling a little white lie …  Oakes … you are over and need to get a new gig …

Summary:

To offer up some mitigation – Gillard and Swan did try to plug the revenue gap with the Carbon and MRR Taxes.   Neither came near forecast predictions and are now in tatters with the collapse of the Carbon Price in Europe, and the end to the mining boom from Australia’s perspective upon us.

Swan and the Treasury should have known tax collections would be down after the GFC because of the equity and other GFC writedowns carried forward.  Also the property investor with negative gearing assets has been able to offset their payee tax with property writedowns because of the lackluster property markets.

All the revenue forecasts took none of the GFC aftermath into account. That is all on Swan.

Next Tuesday 14th May ’13 is Budget night and Swan will put on his magicians cloak yet again and try to mesmerize Australia with his own brand of magic numbers.

Unfortunately – this little Aussie battler will have to be content with throwing rotten tomatoes at the TV because he can’t be at Parliament House to do it personally from the public gallery.

Believe what Mr Swan has to say at your peril …

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The EYE-BALL Guru …

  1. Paul
    May 14, 2013 at 8:03 pm

    Phew!!

  2. May 14, 2013 at 8:09 pm

    Lol … it is heavy man … real heavy …

  3. May 14, 2013 at 8:36 pm

    … and the big fat fraud about revenue writedown begins … who is buying it …

    Listening to Penny Wong on ABC 24 try to sell the lie and I just want to turn her off … have to force myself to listen … burns my ears …

  4. May 14, 2013 at 8:38 pm

    I listen to Swan on 24 beforwe Wong and there is no doubt – McTurd has told them all to tell the lie and to do it agressively and the journo’s I’ve heard so far have no had a go back … where is the question about the people wo do the forward estimates and have got ot so wrong …

  5. Herman
    May 15, 2013 at 9:46 am

    Now that the ink is dry on the budget, there is so little to say.

    The only aspect I am pondering is the thinly capitalised multi national paying excessive tax deductible interest to lower tax regimes. Profit shifting is the scourge of the world. Taken at face value, a $7.5bn drop in corporate taxes, this is nothing more than big stick. Corporates set budgets based on inflation plus Required Rate of Return. Total rate of return means gearing, and balance sheet management. They can’t help themselves. It is existential yet governments can’t stand up to them.

    The fact that tax on superannuation rorting remains no go, means that the ALP feels there is more value in attacking baby bonus. Trusts and Super Funds will now remit tax monthly rather than quarterly PAYG. So what! Higher administrative workload.

    Not attacking spending is probably right given economic uncertainty. This is why some say it is a missed opportunity. It is also why this site and this scribe have advocated lower deficits when the economy was stronger, more resilient.

    Last word, is most commentators are spot on. Go to the polls get thrashed, leave it to the next mob. I most particularly agree with John Hewson, they don’t know who they are. Are they Keynesian or Social Democrats, or what?

    My crystal ball is somewhat murky, due to the fact that I can’t foresee the opposition post election. The cross benches will be irrelevant. Gillard and Swan both gone. An opposition lead by Rudd or Shorten or Combet with Albanese as deputy. The internal crap remains. The new governments’ honeymoon will be well into 2014. Getting over the anxiety of the elongated polling period will take its toll. The electorate is already in disconnect. The only question – is there any alternative. Can Abbott and Hockey do something incisive or will it be wait til next budget. The Mid Year accounts will just be Hockey explaining how bad things really are. His version of simple truth.

    No matter where I look in the world, the unforeseeable option remains the great hope

  1. May 12, 2013 at 10:01 pm
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