Labor has asked the Auditor General to look into the Commonwealth’s debt management, in a bid to shame the Coalition for doubling its gross debt since taking office in 2013.
Shadow finance minister Katy Gallagher has written to Australia’s National Audit Office asking for a review and noting the “financial implications” of the debt and the Coalition’s previous rhetoric about burdening future generations.
Labor is on the right track in criticizing the government’s handling of the budget ahead of the Covid-19 economic contraction, set to be the worst since the Great Depressionat the same time as he calls for the expansion of support programslike the $130 billion wage subsidy for employees.
On Thursday, the Senate committee investigating the government’s response to Covid-19, chaired by Gallagher, will examine Treasury officials as well as the Australian Taxation Office and the Australian Federal Police, who are both responsible for any fraud against recovery programs.
To a hearing on April 28 Labor targeted the Treasury about the fact that more money had been withdrawn from retirement savings by workers than had been spent by the government on stimulus at the time.
On Thursday, officials will be questioned about jobkeeper underutilization of $1,500 per fortnight the wage subsidy, which reached 4.7 million out of a total capacity of 6 million workers.
Since March, the federal government has announced $214 billion in direct stimulus and economic support in addition to $90 billion in Reserve Bank loans and separate packages in each state and territory.
In his letter to ANAO, Gallagher called for an audit of the effectiveness of debt management “given the large and rapidly rising debt levels of the Commonwealth Government as a result of the Covid-19 pandemic. “.
Gallagher noted that the government had raised the debt ceiling from $600bn to $850bn to fund stimulus packages and since changes in 2013 there has been less parliamentary oversight over raising the ceiling.
Gallagher said the debt was “already historically high by national standards before the Covid-19 pandemic”.
Net debt was $403 billion in December and rose to $430 billion at the end of March, while gross debt was $562 billion in December, reaching $607 billion as of May 1.
Gallagher told the Guardian Australia that gross debt is now “more than double the level of debt inherited by the government when it took office in September 2013”.
“Labour recognizes that additional borrowing has been necessary to support Australians through this crisis, but we believe an independent review of how the government’s growing debt is being managed as it should be,” she said. .
In the letter, Gallagher said debt management “will have financial implications for years to come” and argued that taxpayers wanted reassurance about how the debt is being managed.
Treasurer, Josh Frydenberg, indicated that the Coalition will aim to reduce the debt over time by developing the economy instead of raising taxes.
In fact, the The coalition has suggested lowering corporate tax rates and using industrial relations reforms to revive Australia’s economy, prompting shadow treasurer Jim Chalmers to accuse him of using Covid-19 to “dust off his ideological obsessions”.
Chalmers said Labor’s top priority was to ‘save as many jobs and communities as possible’, and questioned whether the government had learned the lessons of the 2014 budget and the need to avoid lockdown measures. austerity.
But on April 29, Chalmers told an Australia Institute video conference on post-crisis economics that he still believed “debt matters,” even though it’s not the most important factor in the depths of the crisis.
He said that “over time” the Commonwealth should repay the debt. “Even before this crisis, the Commonwealth was paying $17 billion to service this debt, and I think we can all find better uses for $17 billion of taxpayers’ money.”