Below is a graph of the blow-out in Australian Government Debt.
The idea that the budget should be in deficit for the next four or five years when the economy is at near-full employment, should be laughable. But Rudd and Abbott would prefer to test the electorate’s mendacity than complete our rise as a world-beating economy by paying our own way in recovery.
But the article makes an interesting observation related to Hauser’s Law.
In a speech last year, Treasury secretary Ken Henry identified a little known fact. Government spending exploded under Gough Whitlam, from 18.9 per cent of GDP in 1971-2 to 24.8 per cent in 1975-6. And it has stayed at about that level ever since, through Fraser-Howard, Hawke-Keating and Howard-Costello.
“In the 3 1/2 decades since, while there have been significant annual fluctuations, the average level of spending by the Australian government has changed little, to be around 25.25 per cent of GDP.”