It’s time to get tough if Australia is to survive and prosper in the future

TREASURER Joe Hockey has embarked on the annual pre-Budget scare campaign, warning of dire consequences if steps aren’t taken to rein in government spending.

TREASURER Joe Hockey has embarked on the annual pre-Budget scare campaign, warning of dire consequences if steps aren’t taken to rein in government spending. Unlike his Labor predecessor Wayne Swan, he isn’t promising blue sky or rainbows in the future. At best, he wants to bring Australia’s economic outlook into line with other advanced economies. In the past, troops of treasurers have grimly warned of harsh budgetary measures and limply delivered flaccid and ­ineffective constraints. Hockey will be ridiculed ­unless he delivers the toughest of measures because the ­nation needs to recover from the past six years of Labor misrule and mismanagement. Thanks to the profligate spending and unlimited borrowing of treasurer Swan, ­unchecked by the hopeless former finance minister Penny Wong, our debt from 2012 to 2018 is forecast to grow more rapidly than the debts of nations like the US and Canada. We will, according to the IMF, experience the third largest debt increase (in per cent of GDP) among 17 advanced economies, over half of whom are expected to reduce their net debt over the next four years. Our debt is actually increasing, at the same time as the debt of many other countries is decreasing. According to the most recent Australian Budget update, the final report card of the former Labor government, we face a deficit of $47 billion this year, our third largest on record, with deficits to continue for at least the next 10 years. Unless the Abbott government acts, there will have been 16 unbroken years of commonwealth government deficits by 2024, the longest stretch of deficits in the underlying cash balance since World War II. As Hockey has warned, we are spending money we don’t have. Within a decade, unless action is taken, government debt will reach $667 billion, or almost $25,000 for every Australian, close to double of what it is today. The Commission of Audit report to be released on Thursday makes 86 recommendations. Not all will be accepted by the government but those which focus on the fastest growing programs in the big spending areas of health, welfare, education and defence will be taken extremely seriously. It is ridiculous that a co-payment is not exacted by the government from those who can afford to contribute to the cost of their medical care. University students should be expected to assist with the cost of their education (beyond racking up HECS debts which many will never pay) and universities should be able to price their courses without a fee cap if they are going to compete for the best students and provide the best tuition. The sheer volume of Australians claiming some sort of pension or concession now means only 14 per cent of older Australians receive no government payments at all. Four out of five Australians over the age of 65 receive a full or part pension and the numbers on disability support ­allowances has ballooned and the burden of the cost of these pensions is falling on others.