What Did We Get for Our $400 Billion Loan? (Part 1)

In 2006, the federal government had $45 billion in net assets (4% of GDP). Today, it has a cataclysmic $400 billion debt on the books, which is budgeted to grow to $480 billion within the next four years.

A $400 billion loan of itself is not a problem if there is value to show for it. However, the problem is that it’s impossible to find any such value. Ask where the money went and the best that even the most ardent Labor supporter can give you is a combination of blank stares, some vague references to ‘steering us through the GFC’ and the (incomplete) NBN. 

Let’s try and do a better job of solving the mystery of where and how our money was urinated away.

If you want to play along at home, try and guess which item was and still is the biggest contributor to our debt. Yes, welfare is always the biggest spending item in the budget, but which new or increased spending item since 2006-07 has been the biggest? I promise you that the irony will be delicious.

Overall picture

While you’re thinking, let’s have an overall look at the slow moving train wreck that has unfolded since 2006-07:

Budget3

The first two bars show Howard’s last years, with spending well within revenue. The next six belong to Rudd and Gillard (plenty more on that to come). The last two show the deadlocked waste of a parliament we currently have and a Liberal government that has so far been without the ability or the means to fix what Rudd and Gillard left. Politics just keeps lowering the bar to the point where Satan is probably getting worried.

Ok, let’s get to work. We start with number 18 on the list:

18 – Fuel Watch/Grocery Choice – $(tens of millions)

Fuel Watch was a pre-election thought bubble which was abandoned before it started. Grocery Choice suffered a similar fate when Rudd realised it could not be implemented.

Tens of millions of wasted dollars later, our groceries and fuel still look and cost the same as they were always going to. Enough said.

17 – Indonesian beef export ban – $0.1 billion (at least)

In 2011, the ABC’s Four Corners program showed some cattle in Indonesian abattoirs (alleged to have been imported from Australia) getting horribly mistreated. Labor’s knee-jerk response was to immediately ban all cattle imports to Indonesia – grinding a $318 million per year industry to a halt in the process.

Over $30 million was spent on ‘assistance packages‘ to compensate farmers who either lost or were put out of business. For good measure, a class action was also launched against the Federal Government in 2014:

Australia’s largest cattle company, Australian Agricultural Company, has already put its damages from the live export ban at more than $50 million.

16 – Green Loans and Green Start Schemes – $0.2 billion

Under this scheme, residents received a free household assessment for energy and water-saving measures. These assessments were then ‘checked’ by the government before allowing the resident to apply for an interest free $10,000 loan to pay for any of the recommended changes to the home. How could this possibly fail? Oh well, who needs $200 million anyway.

NB: the ‘Green Start’ program, intended as a replacement, was also a complete failure and ditched.

15 – Australia Network – $0.2 billion

If you travel overseas in the Asia-Pacific region and stay in hotels with cable TV, then this project ensures that there will be a dedicated Australian channel full of the garbage you were trying to get away from in going on holiday. In typical Labor fashion, Stephen ‘get some underpants on your head’ Conroy dispensed with proper tendering process and appointed the ABC to operate the network, even though the independent tender board had recommended Sky News:

In a report released this morning, Auditor-General Ian McPhee confirmed the government had ignored the “unanimous professional judgement” of the tender evaluation board to award the $223 million contract to a consortium led by Sky News, ahead of the ABC.

He found “perceptions, at least, of a conflict of interest“, arising from Communications Minister Stephen Conroy’s role as the tender approver while also having portfolio responsibility for the ABC.

The Australian reported today that government has been forced to hand over millions in compensation to Sky News after bungling the tender process and handing the contract to the ABC.

14 – Cash for clunkers – $0.4 billion

This scheme was based on giving owners of pre-1995 cars $2,000 to buy a new car – as long as the new car had a 6/10 ‘greenhouse rating’. Funnily, the ‘greenhouse approved’ cars included some four-wheel drives and pretty much half of all available vehicles on the market. As for whether the scheme achieved any ‘green’ aims, this comment on the similarly failed English experience sums it up best:

George Monbiot analysed the cost of carbon reduction under the proposed scheme. He observed “you’d get almost as much value for money by reclassifying £10 notes as biomass and burning them in power stations“.

Who would have thought that encouraging people to buy new cars would’t be efficient at helping the environment?

13 – Solar Homes program – $1 billion

Rudd intended to spend $150 million subsidising solar panels on people’s roofs – a scheme replicated by various state governments to the tune of about $14 billion in subsidies nationally. In the end, $1 billion was spent at the federal level before Labor realised what was going on and cancelled the scheme. When all was said and done, it was found that the cost of solar schemes such as this far exceeded the benefits.

More money down the toilet.

12 – General health administration – $2 billion

In 2006-07, annual spending on general health administration was around $0.75 billion. Today, the figure is $3.1 billion, which represents an average annual increase of a bit over 17% – and over 400% in total. To give you some perspective, total health spending increased by about 173% over the same period ($69.4 billion in 2015-16 vs $40 billion in 2006-07).

Of all the places to increase spending by 17% annually, having more public servants pushing pens would not have made it to any intelligent person’s short-list.

Sadly, this item is only the entrée to Labor’s main course of health waste.

11 – Roof batts program – $2.9 billion

Garrett and Rudd ironically managed to get people’s beds, batts and our budget burning. The $2.9 billion overall cost included $2.45 billion to start the harebrained scheme plus another $424 million to fix the catastrophe after four installers died.

Coming up in Part 2, the top 10 begins…

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