Former Treasurer Wayne Swan has accused the Abbott government and Commission of Audit head Tony Shepherd of “trashing” Australia’s record internationally “for base political motives”.
In a bitter attack Swan - who delivered Labor’s last budget a year ago – declared that “sooner or later this runs the risk of spilling into offshore financial markets”.
With the government asserting it has inherited a fiscal disaster from the previous government, Swan insisted Labor had left the budget “in sound shape” and that its cumulative fiscal consolidation meant spending had been kept in check, including in the family payments system.
The present government were “fiscal vandals”, who had doubled the deficit by some $68 billion. They were also “fiscal fabricators”, Swan said at the launch of the Chifley Ideas Circle in Melbourne.
“They have been absolutely intent on falsely demonising our record - by fiddling the forecasts, manufacturing a sense of crisis and of course the appalling politicisation of the Treasury secretary,” he said.
“But one undeniable fact remains - Australia’s public finances are among the healthiest in the developed world, envied by most of our competitors.”
Swan’s attack came as government sources confirmed that Tuesday’s budget will bring back petrol indexation. It will operate on a twice-yearly basis, costing motorists about a cent a litre. The decision was immediately attacked by Queensland Coalition MP Ken O'Dowd, who told the ABC it would put all costs up and “I guess it could be a broken promise”.
Swan said the government’s “survival of the fittest mentality” was about shifting the balance towards corporations and away from working people, via less corporate tax and a higher GST.
He did not mind the cut and thrust of political combat. “What I take exception to is the trashing of Australia’s record internationally for base political motives. That is exactly what Mr Abbott and Mr Hockey have been doing, along with Mr Shepherd”.
Abbott had co-opted his mates in the business community “into a conspiracy to trash our record”.
The “radical right wing manifesto” that the government had Shepherd compile was “simply one more plank added to the mythical ‘budget emergency’ - providing the rationale for the savage cuts they want to carry out against vital services like health and education,” Swan said.
He insisted that in all Labor’s budgets from 2008-09 onwards, including last year’s budget, it had faced up to the challenge of finding hard savings.
“But we delayed the return to surplus because the economic conditions demanded that we do so. That was because the revenue side of the budget did not hold up as strongly as we would have liked, not because spending increased unsustainably,” he said.
Labor had not shirked its responsibility to find savings to keep the budget in a strong position despite the continuous revenue write-downs it was hit with.
“We were Keynesians on the way down and remained Keynesians when growth returned.”
He accused the government of “petty, spiteful and infantile behaviour”. It was guilty of an excess of partisanship, particularly on economic policy; attacking key institutions including Treasury’s independence; undermining important conventions of government; a litany of broken promises, and an obvious culture of vindictiveness.