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18 April 2015
by Kaye Lee

The financial management of the Coalition

In August 2013, a journalist asked Joe Hockey “Should you win the election, at what stage will you own the economy and at what stage will it no longer be Labor’s fault?”
Hockey responded “We will own the economy from day one, whether it’s Labor’s fault or not. I’m not afraid to accept responsibility and I’m not afraid to be accountable. We will own it from day one. We will be responsible for the Australian economy.”

Every month, the Minister and the Secretary of the Finance Department release an updated financial statement.

Mathias Cormann’s first offering was published on October 11, 2013, showing the state of the books at August 31, 2013, a week before the election.

“The underlying cash balance for the [2013-14 financial] year to 31 August 2013 is a deficit of $10,563 million. The net debt of the General Government sector is $161,253 million at 31 August 2013.”

By May 31, 2014 the deficit for the 2013-14 financial year was $37,747 million and the net debt of the general government sector was $190,232 million.

When Hockey and Cormann held a press conference in September 2014 to announce the final budget outcome for the 2013-14 financial year, Hockey began by saying “The Minister for Finance and myself today are releasing the Final Budget Outcome for the last Budget year of the Labor Government. The Final Budget Outcome for the last year of the Labor Government is a deficit of $48.5 billion.”

A journalist pointed out that the Coalition had been in government for 9 months of the financial year and then asked “So this is it? This is the final line in the sand?” to which Cormann responded “Well this is Labor’s final Budget.”

It’s getting to be a bit of a concern when “bad government” is still supposedly running the show 9 months after losing an election and “good government” doesn’t begin until half way through their term in office.

So now that the adults have taken over finally, how are we doing in 2014-15?

Two months into the 2014-15 financial year there was already a deficit of $12,327 million and the net debt had grown to $217,550 million as at 31 August 2014

The latest figures, released on March 31, 2015, show that the underlying cash balance for the 9 months of the 2014-15 financial year to 28 February 2015 was a deficit of $40,481 million and net debt is $254,964 million.

At that rate, the final deficit for the 2014-15 financial year could end up around $54 billion.

The net debt has risen by almost $94 billion since the beginning of September 2013 to the end of February 2015, over $5.2 billion a month under the Abbott/Hockey/Cormann stewardship.

Despite Tony Abbott’s ridiculous claims to have halved Labor’s debt, those, my friends, are the facts from our own Department of Finance, signed by our not so trusty Minister for Finance.

In December 2012, Hockey told us he did not accept “all the excuses that Wayne Swan talks about – falling commodity prices, a high Australian Dollar, nominal growth not being up to standard. Somehow the GFC is ongoing all the time.”

By December 2014 he was saying “We have faced some significant headwinds this year. Obviously the global economy has come off a bit, iron ore prices have dropped dramatically and we have had some opposition in the Senate that has made it harder.”

Hockey has started the national conversation about taxation reform saying everything is on the table (except sugar of course) while Tony has taken basically everything off the table except GST before we even get a word in.

It should be an interesting budget followed by a cosy COAG leaders retreat.