Despite repeated attacks on Labor’s ‘debt and deficit disaster’, the Liberals have quietly admitted they have no plans to reduce government debt, according to economist Stephen Koukoulas.
For at least the next 40 years, the Abbott government plans to keep borrowing at current levels (13 per cent of GDP), meaning that government debt would eventually reach $1.6 trillion, up from the current $365 billion.
The eagle-eyed Mr Koukoulas noticed the numbers “buried” in the recent Intergenerational Report and reported it on his blog.
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This arguably clashes with the government’s mantra that it is ‘fixing Labor’s mess’, and adds to the confusion about the Liberal Party’s budget message.
In 2013, then-Shadow Treasurer Joe Hockey proclaimed his party was “ready to pay back the debt”.
“We are ready to climb this mountain,” he said in parliament.
“We are ready, on behalf of the Australian people, to do the hard yards.
“It starts on the basis that we have to live within our means before we ask the Australian people to suffer more at the hands of Labor.”
This speech can still be found on Mr Hockey’s website.
Far from being alarmed, economist Stephen Koukoulas (a former advisor to Prime Minister Gillard) claimed this sustained growth in government debt was a good thing.
“Government debt is an essential element of financial markets,” he wrote on his blog.
“Government debt is needed to underpin the futures market and to provide a source of capital for the banks.
“It is an essential element of any good fiscal management.”
But Mr Koukoulas criticised the “hypocrisy” of the government’s “deceitful” rhetoric.
“It will be interesting indeed to see how they deal with questions relating to their new-found appetite for government debt,” he wrote.
The contrast between the Abbott government’s words on the economy and its actions have been noted many times before.
For example, ABC Fact Check has previously confirmed the first-term Liberal government has doubled the budget deficit.
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