In his budget speech Treasurer Josh Frydenberg announced that under a Coalition government we will see a decade of surpluses that will “continue to build toward 1 per cent of GDP within a decade.”
A small part of the answer is that with the economy forecast to grow at 3 per cent a year, GDP is a fair bit bigger 10 years from now. And a 1 per cent surplus of a bigger GDP number is a bigger dollar surplus. This has a larger impact on net debt. The surpluses Frydenberg announced help reduce gross debt. So, the debt-disappearing act has to involve some assets getting bigger.
Don’t get me wrong, I’m fine with that. But to the extent that debt reduction is coming from the Future Fund, it has nothing to do with fiscal rectitude. The only other possibilities are even more remote. A massive increase in the value of the essentially defective National Broadband Network? A colossal spike in student loan repayments while future students pay their own way? Nope and nope.Another question altogether is whether it is wise to reduce government debt to zero in the coming decade.
Abracadabra 😂😂😂😂
They promised a surplus in their first budget, and every one after that, in Joe Hockey's own words. Instead they've doubled the debt. Their claims and promises clearly have zero credibility.