Labor has condemned Prime Minister Tony Abbott’s claim that Australia was heading for a “Greek-style economic future” as inflammatory, irresponsible and capable of harming economic confidence.
The prime minister should be far more responsible than this constant scaremongering which is having a clear impact on confidence in the community.
Mr Abbott pledged he would not fix the federal budget this year at the expense of households but predicted a “broad budget balance” within five years.
Prime Minister Abbott says his government’s second budget will be “dull” in terms of spending cuts.
“Under the former Labor government we were heading to a Greek-style economic future,” the prime minister said.
In 2012, the Organisation for Economic Co-operation and Development (OECD) showed Greece’s debt was 164 per cent of GDP, while Australia’s was 42 per cent.
OECD data also showed that, in 2014, Greece’s unemployment hit 26 per cent of the labour force compared with 6 per cent in Australia.
Alan Tudge, parliamentary secretary to the prime minister, says this is the constant argument from those who dismiss Australia’s debt as a problem: debt levels in places such as Greece are well over 100 per cent of gross domestic product while in Australia they are 15 per cent.
He says Greece may have higher debt levels than Australia but it didn’t start that way. Rather, it started with low debt but found it impossible to stop its growth (despite repeated warnings) until it was too late. This is the real context for our debate.
He says when Greece started to receive warnings about its debt levels back in the ’80s, it didn’t act. By the ’90s it started to cut back on some spending but couldn’t do enough. By the 2000s, it was too late. Australia is not Greece – the Greece of today or even the Greece of 1980.
“Nevertheless, the lesson is clear: once a country is on a debt pathway it is difficult to turn it around. And what can start as a smaller debt can quickly become a seismic one,” Mr Tudge said.