Peter Costello gets it wrong

Peter Costello recently criticised the Government for running a budget deficit and increasing debt to pay for it and suggesting that Australia may soon end up having similar problems to Europe.

Stephen Koukoulas in Peter Costello Needs to Read the Budget Papers compares the ratio of Government spending to GDP during the period of the Howard Government and the Rudd/Gillard Governments. He writes:

• Government spending to GDP averaged 24.2% of GDP during the 12 Budgets that Mr Costello delivered between 1996 and 2007.
• Government spending rose as a result of the stimulus measures during the GFC and peaked at 26.0% of GDP in 2009-10.
• It since fell to 24.7% of GDP in 2010-11.
• Government spending to GDP is projected to be 23.6% of GDP in 2012-13.
• This will be around 1.5% of GDP below the average government spending to GDP ratio of the last 30 years and obviously below the average spending to GDP ratio in the Budget’s the Mr Costello delivered.

Whoops!

And for the record, in only in 3 years out of 12 Budget delivered by Mr Costello was the government spending to GDP ratio lower than the Gillard Government is projecting for 2012-13.