The Australian government's financial missteps during the pandemic have been exposed, with a new report revealing that Jim Chalmers' economic policies would have plunged the nation into an even deeper financial crisis. The report highlights how Chalmers' approach, if implemented, would have led to a staggering $14 billion increase in the deficit over just two years, a stark contrast to his claims of managing debt levels below Morrison-era projections.
One of the most concerning aspects of Chalmers' economic strategy was his proposal for a $300 vaccine incentive, which would have cost the taxpayer an estimated $6 billion. This incentive was deemed unnecessary, as Australia already achieved a 97% full vaccination rate without any such incentive. Furthermore, the Labor Party's call for free rapid antigen tests for all Australians, estimated to cost $5 billion, adds to the financial burden.
The report also uncovers the Labor Party's demand for a $1.4 billion taxpayer-funded loan to bail out Virgin Airlines, a move that could have further strained the nation's finances. Chalmers' push to expand JobKeeper to two million visa holders and short-term casuals, and his opposition to tapering it off in late 2020, while demanding an extension in March 2021, are also highlighted as significant financial missteps.
According to the Coalition's modeling, Chalmers' suite of taxpayer-funded subsidies and policies would have added over $80 billion to the debt and deficit. This, combined with the $337 billion in spending supported by the Morrison government, would have resulted in a staggering $1 trillion in debt, a figure that Chalmers claims to have delayed compared to the Morrison government's 2022 projections.
However, experts, such as UNSW Scientia Professor of Economics Richard Holden, argue that Chalmers' large spending proposals could have exacerbated the nation's debt burden. Holden states that Labor's approach would have made matters worse for little economic gain, as the Coalition's pandemic response was already effective.
The irony of Chalmers' claims is not lost on the Liberal Party. Deputy Liberal leader Jane Hume criticizes Chalmers for forgetting Labor's record of demanding more spending during the pandemic, highlighting the potential consequences of their policies.
Despite the financial implications, Industry Minister Tim Ayres dodges questions about Labor's pandemic-era spending goals, focusing instead on the government's recent surpluses and lower deficits. The report concludes by emphasizing the need for fiscal responsibility, as public spending remains high, with government debt as a share of GDP at 34%, and the 2025-26 budget deficit projected to be $36.8 billion.
