Australian Federal and State Budgets - An Overview
11%. According to Laura Tingle, throughout Australia, between 1990 and 1992, “Around 120,000 jobs were lost in manufacturing”.28 In New South Wales, manufacturing’s share of Gross State Product fell from 21% (in 1981) of GSP to 15% (in 1991). 29
Paul Keating, who at the end of 1991 succeeded Bob Hawke as the leader of the ALP federal government, returned the federal budget to deficit. As Laura Tingle wrote, “The budget. . .collapsed. . .to a deficit in 1991-92 of $9.3 billion and peaked at a deficit of $14.6 billion in 1992-93.” As a proportion of GDP, the deficit was 2.4% in 1991-92 and 3.6% of GDP in 1992-93.30 As the budget deficits increased, the government issued more bonds to fund the deficits. Between 1990 and 1996 (the last year of the Keating Government) the number of federal government bonds on issue nearly trebled as the following table indicates:
Commonwealth Government Bonds on Issue: 1990-199631
To further relieve the budget, Keating proceeded with the sales of major government assets (announced when he was Treasurer in the Hawke government). Between 1992 and 1993 British Airways acquired a 25% interest in QANTAS and, a year later, the sale both of the Commonwealth Bank and the Commonwealth Serum Laboratories was initiated. 32
John Howard, after his election as Prime Minister in the 1996 federal election, proceeded to introduce legislation to commit federal governments to restrain budget deficits: eventually obtaining passage of the Charter of Budget Honesty Act 1998. Section 2 of the Act specified that the government should be committed to a stance of sound financial management. In practice, as Kerry Carne has written, the objective was the reduction of “budget deficits on average over the life of the business cycle.” 33
Tingle, n.23, p.122, 176, 300.
Australian Bureau of Statistics, Australian National Accounts: State Accounts 1991-92, ABS Catalogue no.5220.0 (Australian Bureau of Statistics, Canberra, 1992), p.5.
Tingle, n. 23, p.363.
Reserve Bank of Australia, Statistical Tables – Commonwealth Government Securities on Issue, table E10 (Reserve Bank of Australia, Sydney, 2010).
Geoffrey Hawker, “Ministerial Consultants and Privatisation: Australian Federal Government 1985-88” in the Australian Journal of Politics and History, vol.52, no.2, 2006 pp.250-251.
Carne, n.21, p.103.