Recent surveys of voters strongly support governments cutting spending rather than increasing taxes as the best way to reduce the federal deficit. The Commonwealth budget has been continuously in deficit since 2008-9. There has been a massive growth in Commonwealth spending and debt over the last two decades. Total social spending (health, education and social security) increased from $106 billion in 2002-3 to over $354 billion in 2022-23. Net debt has risen from $33 billion to $715 billion during the same period. The pandemic accounts for about half of these increases. The rest were driven by governments responding to electoral demands and political priorities.
Net debt is not the appropriate metric. Gross is. The difference between net and gross is almost entirely the Future Fund. It's earnings are reinvested and not set off against interest payments. It is also an equity portfolio not well counter-correlated with a debt portfolio. Don't by the Treasury/Treasurer spin. If the market crashes, the future fund will crash. The debt balance won't.
There is also insufficient intellectual ballast in the Treasury or RBA to undertake such a review. Plus the incentives are completely screwed. Canberra has grown so much as have the public services, a Treasury review would result in them making their friends and neighbours redundant. According to the ABS, there are over 250K Commonwealth public servants costing over $25 billion per annum. That's half the total population of Canberra. Deduct kids and probably 2 in 3 working people work for the Commonwealth.
Hi Scott. If an old policy wonk may add ...
Net debt is not the appropriate metric. Gross is. The difference between net and gross is almost entirely the Future Fund. It's earnings are reinvested and not set off against interest payments. It is also an equity portfolio not well counter-correlated with a debt portfolio. Don't by the Treasury/Treasurer spin. If the market crashes, the future fund will crash. The debt balance won't.
There is also insufficient intellectual ballast in the Treasury or RBA to undertake such a review. Plus the incentives are completely screwed. Canberra has grown so much as have the public services, a Treasury review would result in them making their friends and neighbours redundant. According to the ABS, there are over 250K Commonwealth public servants costing over $25 billion per annum. That's half the total population of Canberra. Deduct kids and probably 2 in 3 working people work for the Commonwealth.
Bureaucratic review deliver what is required.