Incompetence isn't illegal

I was meeting with a representative of the Small Business Development Corporation relating to an issue where a contractor acted improperly in my business causing me severe financial distress.

His advice was "Incompetence isn't illegal, otherwise a large portion of Australia would end up in jail." Immediately I thought of Wayne Swan, the hapless and disorientated treasurer of Australia from 2007 until 2013. 

Despite six years of claims to post a budget surplus, Swan failed to a surplus even on a single occasion. Wayne Swan is a dickhead, it is hard to explain it any other way. Joe Hockey, then shadow treasurer described Swan as the gift that just keeps on giving - a great joke.

That's a funny and ultimately true sledge as Swan claimed to post a budget surplus each year before retracting the statement at the last moment. What isn't funny is Swan's legacy of debt, mismanagement and incompetence.

Accused of economic vandalism by former Reserve Bank of Australia board of director Warrick McKibbin, withdrawing money from the reserve fund to bolster the budget surplus was poor judgement - ironically the budget surplus never eventuated but the bank was left extremely exposed.

Calling Swan a vandal is a little harsh, to become a vandal, one has to deliberately undertake an action, Swan, of course had no idea what he was doing so couldn't possibly be undertaking a deliberate act.

To keep the budget surplus in context, Peter Costello, the previous treasurer delivered twelve budgets from 1996 to 2007 with ten budgets in surplus. During that time frame was the Asian Financial Crisis of 1997 with the dot.com bubble collapsing in 2000.

The global recession of 2001 affectied the United States, European Union and other advanced economies, but avoided by the United Kingdom, Canada and Australia with Indonesia escaping unthscathed.

Australia avoided recession during the Global Financial Crisis of 2008, that much is true. In its simplest terms, the GFC was a debt crisis. As can be seen by the graph, Australian Commonwealth debt was climbing steadily when Peter Costello became treasurer and reduced debt to almost nothing.

Costello actually sought to totally pay off all Commonwealth debt but was persuaded to hold a small amount of Commonwealth debt so as to maintain debt markets (bonds and treasury notes) to establish a base for future pricing.

Costello instead poured excess revenue into the Future Fund meeting the future liabilities of civil servant superannuation. Australia had been insulated predominantly from the GFC by low government debt and demand from China seeking Australia's natural resources.

It is hard to explain Wayne Swan's logic, blaming taxation revenues as the reason behind being unable to balance the budget, reducing spending is easier when you change government and hence direction. 

Despite Swan's claims that a revenue decline will wipe out the budget surplus, Australian Treasury clearly indicates revenue increasing making his claims ludicrous.