Tim Harrington (Echonetdaily letters July 8) says that the previous government wasted hundreds of billions of dollars but doesn’t provide any evidence for this statement.
Just because Liberal supporters repeat this claim does not make it true.
I usually don’t spend my time justifying Labor Party policies, but here is what I understand most Australian economists are saying.
Labor responded to Australian treasury advice to increase government expenditure on a range of rapid stimulus programs and this was a major factor in reducing the impact of the global financial crisis in Australia.
The Labor Party was not perfect in its cost control of some programs (eg the NBN and asylum seeker programs), however the major reason that we currently have a budget debt is not increases in expenditure but a significant drop in government revenues. Government revenue went from approximately 25 per cent of GDP in the last year of the Howard government to a low of 21.5 per cent of GDP in 2010-11. Howard and Rudd are largely responsible for this through a series of tax cuts they supported.
Australia is one of the healthiest economies in the world, our debt is low in comparison with our peers, there is no budget emergency and the solution to long-term budget balance is both to reduce growth in expenditure and to increase government taxation revenue.
Australia, under both major parties, already has very efficient government – our total government expenditure as a share of GDP is the third lowest of all wealthy OECD nations, yet we invariably score at or near the top of almost every international measure of good governance, health and wealth.
Garth Luke, Mullumbimby
