15 Dec 2014

Joe Honkey and Mathias Conman are still selling us a pup, blaming the Labor puppy for every mess doesn't wash anymore.

THIS PUPPY JUST CAN'T KEEP GIVING

Hockey's modified budget is nothing but a con and its as audacious as the proposed medical research future fund.

We've all heard about the accounting tricks perpetrated by the Gillard government, but now it's the Abbott government's turn.

During last year's election campaign, the heads of Treasury and Finance signed off on a deficit estimate for 2013-14 of $30 billion then we had Joe Hockey and Mathias Cormann pop up with their review claiming the deficit they'd inherited would be closer to $47 billion.

Well this higher number was largely the result of Joe and Mathias indulging in a little creative accounting. $7 billion of the $17 billion increase since the election was explained by Treasury revising down its forecasts for employment and wage growth and, therefore tax collections.

All well and good however most of the remaining $10 billion involved some strange transactions that these two boys claimed were forced to include because Labor had left them hanging.

The biggest was a transfer of $8.8 billion to the Reserve Bank – this figure was not an amount the Reserve didn't even ask for, in fact Treasury had recommended against.

This of course was to make Labor's last deficit look bigger and to make it easier for the Reserve to pay higher dividends into Hockey's subsequent budgets.

In this year's budget Hockey announced the GP co-payment and various other cuts in health spending, he explained that these savings would be put in a new medical research future fund.

That is once the money in the fund reached $20 billion, the annual interest on the money in the fund would be used to pay for medical research. However under the changes announced last week, these payments from the net interest earnt would instead begin in 2015-16.

You would have to be student of government accounting rules to see it. People think that since the savings are being spent building up the fund, there won't be any net saving to the budget until after the $20 billion target has been reached.




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