Cut Off Frydo's Credit Card

Governments should not give up on responsible financial management. Ever. In the past, this has been the dividing line between the parties of government, Labor and Liberal, and the reckless buy-now-pay-later parties like the Greens and One Nation. 

But on Tuesday night the Liberal Party declared a trillion dollars of debt was sensible and manageable. In Treasurer Josh Frydenberg’s own words it was “low by international standards”. This is the same Liberal Party that said a couple of hundred billion dollars was a “debt and deficit disaster”.

When the Liberal Government came to office gross debt was $257 billion, before the pandemic it had doubled to $568 billion and now it is forecast to be $1.06 trillion by 2023. Australia’s biggest debt. Ever.

West Australians have seen the Liberal Party give up on responsible financial management before. The results aren’t pretty.

Premier Colin Barnett dug the biggest debt hole in WA history. He inherited a government with no debt. In just 8 1/2 years he managed to leave West Australians with $40 billion of debt.

His former treasurer, Christian Porter, was the spender-in-chief. His 2012 Budget locked in years of big spending. In his Budget speech, Porter proudly declared, “The Government has so far invested an average of $6.7 billion per annum to rebuild the State; the previous government’s average spend was $3.5 billion.”

It worries me that Josh Frydenberg now sounds like Christian Porter. Back in 2012 Porter thought the mining boom would go on forever. Even the cleaners of mine site dongas knew that was rubbish.

Porter was living in a fiscal fantasy. That the Liberals decided to then send him to Canberra shows they were already on the way to giving up on their financial credibility.

The truth is this: Labor governments are the ones that clean up the financial mess of the Liberal Party.

The day after Labor’s landslide win in 1983, Bob Hawke woke up with a massive headache. It wasn’t caused by a hangover — he’d given up drinking years earlier.

It was caused by the briefing he received from Treasury officials. Hawke was informed that after John Howard’s five years as treasurer, Australia had been left with a projected deficit of $9.6 billion.

In WA it was left to Mark McGowan and Ben Wyatt to put together a robust plan of spending controls to pay off Barnett and Porter’s credit card debt.

We have seen the Federal Liberal Government’s creeping fiscal laziness for a while 

It is lazy to forecast the iron ore price at US$55 a tonne when you know it will be more.

JobKeeper gave payments to profitable companies while refusing to support employees who have been with a firm less than 12 months.

And the Government’s lazy approach to the vaccine rollout is only likely to further damage the labour market.

As a Labor member I’m often lectured by Liberal politicians that “eventually, someone has to pay”. That is true.

The problem is that the only debt reduction playbook the Liberals have is the one tested by Campbell Newman a decade ago.

The cuts will inevitably come. They will inevitably be bigger. And working families will be the ones that pay the price.

The WA Labor playbook has been much more sensible. Paying off debt slowly and carefully — like paying off a house.

Strongly managing recurrent spending. Retaining ownership of profitable government trading enterprises. Saying no more than yes.

This is the approach that Anthony Albanese and Labor will have to take in managing Morrison’s money mess.

While Australia does need spending to encourage economic growth, it needs to be carefully targeted and ensure as many Australians benefit as possible.

Only in this way will Australia get a real, lasting recovery.

One that ensures Australia’s economy is stronger, broader and more sustainable.

Unfortunately for Australians, we didn’t get this from the Government on Tuesday night. What we got was a shameless political fix.

Australia’s future is now indebted to this Government’s lack of vision.

Scott Morrison likes to pretend that when he became Prime Minister the Liberal Government was born again.

But Morrison has been a minister, the treasurer or the Prime Minister for every day of this Government’s eight long years.

He is the father of our nation’s debt baby .

We need to cut off the credit card for Morrison and Frydenberg and give Australians a Government that has a plan beyond simply spending. 

Patrick Gorman is the Labor Federal Member for Perth 
This opinion piece was first published in The West Australian on Thursday, 13 May 2021.