Australian Federal and State Budgets – An Overview
By 1983, the year in which Bob Hawke’s ALP government was elected, unemployment (Australia-wide) had risen to 9% of the workforce.20 The Hawke government continued the approach of the western European countries and Japan internationally, and the approach taken by the previous Fraser government domestically. Hawke adopted a fiscal stance under which, according to Kerry Carne, “the budget deficit would be reduced both in current terms and as a proportion of” Gross Domestic Product (GDP).21 Whereas in its first budget (1983- 84) the Hawke government’s deficit was $7.9 billion (6.7% of GDP) by the time of its fourth budget (1986-87) the deficit had been reduced to $2.7 billion (3.8% of GDP).22 The Hawke government attempted to maintain this approach until the onset of the 1990s recession. In 1989-90 the Hawke government produced a budget surplus of $8 billion (2.2% of GDP). 23
To reduce pressure on the budget, the Hawke government began to sell a number of government owned assets. In 1990 then Treasurer Keating announced that the Hawke government intended to sell off the Commonwealth Bank. 24
In the first two years of the 1990s there was another global recession. In 1991, General Motors made a loss of $4.5 billion and Ford Motor Company recorded a loss of $2.3 billion. A year later, in 1992, Ford made a loss of $7.4 billion. Manufacturing concerns in Australia again suffered corresponding falls in profit. BHP reported a 50% decline in profit during the second half of 1991 (from $828 million down to $407 million). It subsequently announced that it would be reviewing its operations at Newcastle.26 Ford of Australia made a loss, during 1991, of $114 million.27 Unemployment, in 1991, rose to 8.7%. Then, in 1992, it increased to 25
Giancarlo Corsetti and Nouriel Roubini, Fiscal Deficits, Public Debt and Government Solvency: Evidence from OECD Countries (National Bureau of Economic Research, Washington DC, 1991), pp.7-8.
Peter Ewer, Ian Hampson, Chris Lloyd, John Rainford, Stephen Rix and Meg Smith, Politics and the Accord (Pluto Press, Sydney, 1991), p.24.
Kerry Carne, Fiscal Policy Rules and Public Capital Formation in Australia (PhD, Griffith University, 2007), pp.100-101.
Kevin Davis, “Managing the Economy” in Brian Head and Alan Patience (eds.), From Fraser to Hawke (Longman Cheshire, Melbourne, 1989), p.77.
Laura Tingle, Chasing the Future: Recession, Recovery and the New Politics in Australia (William Heinemann, Melbourne, 1994), p.363.
Tingle, n.23, p.165.
John Durie, “GM Posts Record US Loss” in The Australian, 26 February 1992, p.27; “one- Off Costs Give Ford Record Loss” in the Sydney Morning Herald, 12 February 1993, p.21.
Graeme James, “BHP Slumps 51pc to $407m” in The Australian, 21 December 1991, p.33; Mark Skulley, “Shock $515m BHP Result” in the Sydney Morning Herald, 27 June 1992, p.30.
Richard Gluyas, “Ford Looking to Break Even after $114m Loss” in The Australian, 27 March 1992, p.15.