Mr Hockey’s Budget Knowledge Exposed

 

It is a pity that Mr Hockey squibbed on his own challenge for a bet that the return to surplus in 2012-13 would “come from higher taxes instead of genuine savings.”

Here is the background: http://www.marketeconomics.com.au/1917-mr-hockeys-offers-up-a-bet-but-will-he-follow-through

A pity for me that is because the Budget last night embarrassingly exposed Mr Hockey’s misunderstanding about how the government is handling its finances in delivering the surplus.  In terms of “genuine savings”, one only has to look at the following facts:

• Real government payments (spending) will fall by 4.3% in 2012-13.  In nominal dollar terms payments will fall by $7.1 billion.  In terms of “genuine savings”, the 4.3% fall in real government spending is the largest ever recorded, ever; and the fall in nominal spending is the first such fall ever record.

Blind Freddie can see that these savings in the Budget are quite massive.

• On another level, the spending to GDP ratio falls to 23.5% in 2012-13, some 0.7% of GDP lower than under the Howard government and down from 25.1% in 2011-12.

See?  Genuine savings here.

I don’t know what facts Mr Hockey is looking at in making his claims – or is he just making up a story as he goes along?