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 Mining Boom Money... Just gone... I dont like it

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Posts : 38
Join date : 2013-03-30
Location : Australia

PostSubject: Mining Boom Money... Just gone... I dont like it   Sun Apr 14, 2013 2:36 am

This is a ridiculous - why are these people running our country? They squander so much money - no doubt they embezzeled half of the money from the mining boom as well - not that there would be any proof.

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.

"During the good times we spent up big and then during the bad times we spent up big," Mr Richardson said. "The budget is worse than people think it is and sadly for Australia it's worse than the politicians think it is."

The chief economist at HSBC, Paul Bloxham, said "best practice globally" would have been to set up a sovereign wealth fund to stash the temporary revenue boost, like Chile did in 2007 with its copper revenue and Australia advised East Timor to do with its oil and gas.

"We could have had better management of this very large gift of rising commodity prices we received from the rest of the world," Mr Bloxham said, adding this year's budget was likely to look "nasty".
The managing director of Market Economics and former economic adviser to the Prime Minister Julia Gillard, Stephen Koukoulas, expects the budget will reveal several years of deficits.

"There's just not the revenue coming through. We gave too much away, both sides. To build surpluses from here, things have got to be cut or taxes have got to be increased."

Mr Koukoulas is tipping a deficit of $10 billion in 2013-14 and about $5 billion the following year.
Norway has the world's biggest sovereign wealth fund, with $716 billion raised since 1990 from the country's rich oil reserves.

The Kuwait Investment Fund, established in 1953, is the world's seventh largest at $342 billion.
Australia's Future Fund ranks 13th at $83 billion. Combined with the $290 billion from the mining boom, we could have bumped Kuwait for seventh place.

Full Article: http://www.adelaidenow.com.au/news/national/australian-governments-have-blown-mining-boom-cash-say-economists/story-fncz7kyc-1226619834802
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