SM,

An austerity budget at a time of high unemployment is vacuous. It damages growth, so revenue falls, so the budget still doesn't balance and meanwhile the people are much worse off.

Balancing the budget for its own sake is populist – it sounds far more sensible than it actually is, and politicians prefer to exploit the public ignorance than explain the truth (though in most cases that's probably because they don't understand the truth themselves).

Running tight fiscal policy to control inflation and/or interest rates is neither vacuous nor populist – this will sometimes involve running surpluses but there's nothing magical or special about the zero point. But right now Australia's inflation is low, and though the economy could do with an interest rate cut, the RBA is scared to provide one because of the likely effects on house prices.

Your statement that "there is not an economist in the world that thinks a country can continue spending 10% more than it receives in revenues without severe consequences" is rather dubious, as the deficit is neither desired nor forecast to stay at 10%. I'd prefer to see a bigger deficit now and a return to surplus sooner. However there are some economists who do advocate continuous deficits. Bill Mitchell is one.

The interest bill you refer to is Australia's not Labor's. And the real problem, which there's been a bipartisan failure to address, is that too much of our money is sourced from overseas instead of the RBA. Commercial banks have borrowed in foreign currencies and bought Aussie dollars, and foreigners have bought Aussie dollars to buy government bonds. If Australia had sourced more of its debt from the RBA, and made it easier for the commercial banks to do so, our dollar wouldn't have risen so unsustainably high, hence our manufacturing industries would be in much better shape and we'd be receiving more interest, balancing out what we pay.

Aidan, of cause it's labors debt, because unless you were on another planet when Kevin 07 arrived, we had billions in the bank, and zero debt. What's worse, is that this debt was accumulated in boom times, apart from the GFC, which by the way has been suggested to have had minimal impact. So not only did labor waste the spoils of that boom, but they also borrowed on top of that, and wasted the borrowings as well. You can't change history, it's black and white.

As for our manufacturing, a strong dollar hurts out man industries because of exports. It stands to reason that if one American dollar buys less than one Aussie dollars worth of goods, they shop elsewhere, which they are doing right now.

>>Successive governments, both Labor and Conservative have let big and small business avoid tax for far too long.<< As a small business operator I have been paying 30% tax... please tell me the secret to avoiding this.

On topic, it appears the PUPs are self imploding even more so, since this topic was raised. The Victorian elections will be the windsock for big Clive's future and the rest of the country's expectations for the PUPs.

rehctub,

"....apart from the GFC, which by the way has been suggested to have had minimal impact...."

It had a minimal impact in Australia - as opposed to many European countries who smartly implemented austerity measures - and then dived into recession.

One can fairly confidently expect that if the Abbott mafia had been in office in 2008 it would have adopted the same impoverishment policy (mincingly termed "austerity") as in Europe and the British Isles the moment the Global Financial Heist descended, and we would have gone the way of Spain, Ireland Italy, Portugal and Greece. Rudd's action and later Gillard's, which the Abbott mafia have never ceased whining about, allowed our people to dodge a devastating surrender to the foreign banksters.

We certainly have some very good posters on this one. Aidan has presented the reality so clearly, even the 'Usual Suspects' appear to be stunned into silence, no counter argument in defense of the Abbott Government what so ever.

ConservativeHippie, if you are paying 30% tax you can't be running a small business, you must be running a microscopic business. What I suggest is you open up 500 new stores, flogging crappy cheap furniture from Scandinavia, move your headquarters to the Cayman Islands, fudge the figures, and pay no more than 1% tax in Australia.

Hassy, when confronted with reality is that all you can come up with. Are you off your medication again? What, the facts are too much for you.

http://www.businessinsider.com.au/a-51-billion-dollar-hole-has-suddenly-appeared-in-joe-hockeys-budget-2014-11