Labor’s Date With Fate

3 May

On February 24th 2010, Barnaby wrote an article for The Australian (published 12:00am Feb 25th), wherein he uttered nine words that now serve as both the tagline for this blog, and a stark reminder to the nation of Barnaby’s wisdom and foresight:

If we keep borrowing at this rate Australia and all who rely on the government to provide a basic service of health, defence, subsidised medicine, childcare, unemployment benefits, pensions, are all going to arrive at a point of reckoning. Stresses will be placed on the government budget because we did not manage the debt at a point where it was manageable.

If you do not manage debt, debt manages you.

Prophetic.

Precisely 12 months to the day from when Barnaby penned those fateful words, Julia Gillard announced to the nation that the government she leads would introduce a carbon (dioxide) tax:

Yesterday Gillard announced the architecture of her pricing plan, but it was only foundations and scaffolding. Floorboards have yet to be laid or walls erected.

As Abbott quickly pointed out, her plan is a blatant breach of Gillard’s election promise not to introduce a carbon tax.

What would possess Labor to take such a huge political risk, on a policy that has (so far) cost the jobs of four political leaders?

Simple.

They have blown hundreds of billions on botched roof insulation.  Unwanted and overpriced school halls.  Rorted “green” schemes.  The Nation Bankrupting Network.  And many more EPIC FAIL thought bubble policies.  Now, with an Interest-on-debt cost of more than $10 billion per year, and no discipline to simply stop borrowing and spending, they need the billions in extra revenue that a carbon dioxide tax would raise:

MYEFO 2010-11, Appendix B, Note 10: Interest Expense

A week from today, the Goose will hand down his fourth budget.  His fourth unbalanced budget. And a new record budget deficit.

If pensioners are targeted, Family Tax benefits slashed, childcare rebates cut, or any other essential service that you rely on is affected, now you know why.

Labor’s debt is out of control.

If you do not manage debt, debt manages you.

Barnaby is right.

UPDATE:

Your business suffering thanks to the AUD exchange rate?  Michael Stutchbury says the deficit is driving up the dollar:

Wayne Swan complains that the soaring dollar is blowing out his budget deficit by crunching non-mining company profits.

But the more fundamental story is that Canberra’s structural budget weakness is helping to drive the Australian currency to its new post-float high of $US1.10…

Instead of being close to $50bn in the red, the budget already should be building up a solid surplus buffer to stabilise the mining boom economy.

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