The news just keeps getting worse for embattled Treasurer Joe Hockey.
Faced with a failure to deliver on the promise of better economic management and an inability to explain or, crucially sell, the narrative which drove last year’s budget, the Treasurer is assailed with a deterioration in Australia’s fiscal position as a result of further downgrades to commodity prices and taxes.
But despite negative feeling towards his proposed changes to Medicare and higher education – issues high on the list amongst those that nearly saw his leader Tony Abbott toppled on Monday – reports coming out of Canberra this morning are that Hockey told a meeting of Coalition MPs:
“If we junk unimplemented changes we will never get back to surplus.”
That’s a big step back from his promise to the Australian people that the nation’s fiscal position would be back in the black by 2017-18.
The SMH reports this morning that Deloitte Access Economics is now forecasting a further deterioration to the budget’s bottom line of $15 billion.
The total includes only the major measures held up in the Senate, among them the cuts to the Medicare rebate associated with the introduction of a co-payment for bulk billing ($3.5 billion), the cuts to higher education ($4 billion), the cuts to pharmaceutical benefits scheme ($1.3 billion) and the reintroduction of fuel excise indexation ($2.1 billion but now being pursued by administrative means that may themselves be disallowed in the Senate).
This news on the deficit is going to be a big hurdle on the road to restoring confidence in the Abbott Government and confidence in the consumer and business sectors.
It is also going to keep pressure on the Treasurer as he tries to balance the need for reform with what appears to have been a promise by the Prime Minister of a more populist budget in order to defeat Monday’s spill motion.