Chris Bowen promises a future of big surpluses, pity Labor’s history is one of deficits
Chris Bowen reckons the Turnbull government is not doing enough to cushion our economy against future shocks. National Press Club, yesterday:
The whiff of a surplus, not reaching at least 1 per cent of GDP until 2026-27, does not adequately protect Australia against the potential rolling seas of international uncertainty. Australia needs bigger surpluses, sooner than the government is scheduling … I can confirm (that) … Labor will go to the next election achieving budget balance in the same year as the government, delivering bigger cumulative budget surpluses over forward estimates as well as substantially bigger surpluses over the 10-year medium term, and the majority of savings raised from our revenue measures over the medium term will go towards budget repair and paying down debt … The greatest failure of the government’s official “fiscal strategy” has been the persistent watering down of its 2013 commitment to get to a surplus of at least 1 per cent of GDP by 2023-24.
Stirring stuff from the opposition Treasury spokesman, but history indicates scepticism. Paul Kelly, The Australian, February 17:
… what does Bowen represent …? Where might he fit in the Labor pantheon of treasurers from Bill Hayden to Paul Keating and Wayne Swan?
Bowen’s book-length survey of treasurers, The Money Men, gives a hint. Troy Bramston, The Australian, August 3, 2015:
(Bowen) is generous about Swan’s handling of the global financial crisis but notes his mixed record on reform, including flaws in the mining tax and poor handling of carbon pricing. He is defensive about Swan’s broken promise to return the budget to surplus and is too forgiving on spending. Bowen offers faint praise for (Peter) Costello, the longest serving treasurer, describing him as “competent and solid”. He implemented the GST, improved prudential regulation and delivered nine budget surpluses. Bowen discounts Costello’s achievements because of the mining boom.
Has Bowen learned the lessons of Wayne Swan as boastful treasurer? Swan’s budget speech, May 8, 2012:
The four years of surpluses I announce tonight are a powerful endorsement of the strength of our economy, resilience of our people and success of our policies. In an uncertain and fast-changing world, we walk tall — as a nation confidently living within its means. This budget delivers a surplus this coming year, on time, as promised, and surpluses each year after that, strengthening over time … Tonight we make a forceful statement that ours is one of the world’s strongest economies and fairest communities. Not even a sovereign debt crisis in Europe or unprecedented natural disasters here at home could deny Australia this substantial achievement. The deficit years of the global recession are behind us. The surplus years are here.
No, they’re not. The Australian, December 21, 2012:
Labor’s budget strategy is in disarray with the prospect of deficits for at least the next two years and Wayne Swan conceding that he cannot meet his self-imposed target for returning to surplus … Tony Abbott seized on the statement as proof Labor could not be trusted to run the economy … The concession means all five of Mr Swan’s budgets will have returned deficits. Ralph Willis, who was treasurer the previous time Labor was in government, also failed to record a surplus, from 1993 to 1996.
Last treasurer to deliver a surplus:
Costello, 2007-08.