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Former head of government sounds alarm on potential credit downgrade
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Former treasurer of the association stated that all organisations involved should have been equally responsible.
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Former political leaders John Howard and Peter Costello have strongly criticized the Albanese government for its financial mishandling as the country struggles with an ongoing cost-of-living emergency.
The former Prime Minister and Federal Treasurer delivered a critical assessment of the country’s current government after the release of the 2004 Cabinet papers, grading them poorly on their stewardship of the national finances.
Former Prime Minister of Australia John Howard expressed concern over the worsening financial situation, explaining that the Budget had spiralled ‘out of control’.
He cautioned that although the threat to Australia’s credit rating is not presently severe, investors are likely to become increasingly cautious.
‘A credit rating downgrade is inevitable as a consequence, even if it doesn’t happen immediately,’ Mr Howard said in a statement to The Australian newspaper.
Mr Howard pointed out the current government’s willingness to accept a long-term debt program is in stark contrast to the budget balance focus of previous Labour governments.
A former federal treasurer, Peter Costello, has questioned the current Treasury’s priorities, stating that it is not adequately focusing on the interests of taxpayers.
‘Taxes will no longer be protected by the Treasury,’ Mr. Costello noted.
They’ve staked their futures with this major government and large expenditure policy. I think the Treasury department itself, as an institution, has been detracted or belittled by this process.
Former leader Peter Dutton criticised the economic management of current Prime Minister Anthony Albanese and Federal Treasurer Jim Chalmers.
“Unfortunately, the current government made a serious financial and political mistake by delivering a couple of surpluses and not taking steps to ensure they continue as a priority in this challenging economic period,” Mr. Howard said.
It likely is the opinion of the government that the general public lacks concern, which I believe is an incorrect assumption.
Mr. Costello acknowledged the situation and attributed the critical state of Australia’s financial ledger to a shared responsibility of both parties.
He contended that the Budget should have returned to surplus following the additional spending necessitated by the 2008 financial crisis and the 2020-21 pandemic.
“There’s an escalating concern in Australia, as both tax per person and government expenditure per person are witnessing a notable increase,” Mr. Costello stated.
We’re heading towards a nation with a higher tax burden, greater public expenditure, and growing debt, which contradicts the trend of decreasing productivity levels.
‘Realistically regaining productivity will require taking action in two key areas – effectively reducing the financial strain of taxes on businesses and the economy, as well as tightening spending controls – with a significant impact coming from addressing this substantial issue.’
Australian Treasurer Peter Costello stated that the country had fallen behind other nations in lowering interest rates, as others had already taken this step.
He attributes this delay to a government known for excessive spending and taxation, which has led to the budget returning to a deficit state.
“The rest of the world is in a phase of decline – the British, the Europeans, the Americans, the New Zealanders,” he said.
So far, there are no signs of relaxation in Australia.
Mr. Costello attributed responsibility to government spending.
It’s undeniable that government spending has capped interest rates at a higher level in Australia longer than necessary. If it had reined in spending in the last budget or one prior, we would likely see a period of easing interest rates by now.
Mr. Howard and Mr. Costello also voiced worry about the contentious trade policies announced by US president-elect Donald Trump.
“I must say I’m extremely anxious about President Trump’s discussions of tariffs,” said Mr. Howard.
Arriving at this point, we should remember that trade has effectively lifted millions of individuals out of poverty. However, unilaterally imposing tariffs of this nature without proper justification is undoubtedly detrimental to global trade and the overall performance of the global economy.
Mr. Costello expressed disapproval of tariffs and believes they would be detrimental for the Australian economy.
“I firmly believe it doesn’t align with the spirit or even the literal terms of the free-trade agreement, and we should make every effort to persuade the Americans of that,” he stated.
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