AUSTRALIANS could be sitting on a $300 billion sovereign wealth fund to rival the oil-rich nation of Kuwait if we had banked the budget windfall of the now deflating mining boom.
Instead, exclusive modelling for News Limited reveals successive federal governments have squandered the lot – and then some – in tax cuts, handouts and stimulus spending.
Most economists are tipping Labor’s fifth budget will reveal a budget still deep in deficit – by as much as $10 billion in 2013-14 – as revenues continue to disappoint.
This is despite the mining boom delivering a $290 billion boost to the budget bottom line between 2003/4 to 2016/17, according to modelling by Canberra-based forecasting group Macroeconomics.
The figure represents the difference between actual revenues and the revenues that would have been raised if there had been no commodity price boom.
“That’s money that could have been banked,” according to Stephen Anthony, a former Treasury official now head of budget forecasting at Macroeconomics.
Both sides of politics are to blame for the dire state of the budget today, Mr Anthony said.
“First you have the Howard government which was fiscally a very good government until its final five years when it became the blue ribbon profligate government. It really set a new record for fiscal irresponsibility.”
In its last five years, the Howard government spent $250 billion, including $133 billion in new spending and $117 billion in tax cuts.
The Rudd/Gillard government has drained the budget of a further $81 billion, including $153 billion in new spending ($70 billion during the GFC) offset by tax increases of $72 billion.
Veteran budget forecaster and director of Deloitte Access Economics, Chris Richardson, said the global financial crisis had blown a hole in government revenues, but Australia’s budget crisis had been a decade in the making.
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