Friday, 27 December 2013

Australia's fiscal deficit has been a long time coming

Ross Gittins in Blame for budget woe widely shared makes the point that our structural deficit is the result of policies of the Howard, Rudd, Gillard and Abbott Governments:
With Hockey busily shifting all the blame for this daunting outlook onto Labor, it's worth examining its political antecedents. Since we've known we had a long-term ''fiscal gap'' problem at least since the first intergenerational report of 2002, the blame for making things worse must be shared not just by the former Labor government, but also by the Howard government and even the Abbott government.

The Howard government probably did most to add to the existing problem by the way it frittered away the proceeds of the first phase of the resources boom, which it treated as a permanent rather than temporary boost in tax collections.

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