One thing Labor supporters like to do in defence of the Rudd/Gillard era of economic vandalism and the high borrowing ways of Labor in general is to pretend that the Howard era was actually a debacle that was of no benefit to Australia. They’ll bleat that the only way the Howard government paid down debt was by asset sales and follow this with claims Howard had left the country economically in bad shape.
Somehow this perspective justifies Rudd/Gillard taking Australia from a negative debt position to over $350 billion worth of debt within six years. Howard paid down debt by asset sales after all, Labor could have done that, anybody can do that so runs their logic. This of course ignores that it was the Hawke/Keating Labor government that got the asset sales ball rolling. $3 billion worth of assets were sold outright and $3.4 billion in shares were sold only the money obtained by Labors asset sales didn’t actually pay down debt.
So without the spin let’s take a look at the situation and the numbers, in 1996 the Howard government inherited the $96 billion debt from the previous Fraser and Hawke/Keating governments. To pay down this debt the Liberals continued with the Labor policy of selling assets. $11 billion worth of assets were sold outright and $53 billion in shares were floated for a total of $64 billion that was used to pay down the debt.
$96 billion minus $64 billion leaves $32 billion, this remaining amount was also paid down and not by the proceeds of asset sales. Not only was the debt paid but there were regular budget surpluses and by the end of the Howard government the Future Fund was in place holding $50 billion and there was $20 billion in the bank that was providing the budget with $1 billion in interest per year. If this was all solely down to the asset sales without any real economic skill then the Howard government certainly knew how to stretch a dollar.
During the nine years of the Howard government Australia functioned as a welfare state, was running continued budget surpluses, unemployment was low, the cost of living was at reasonable levels and the debt was gone.
Under the subsequent Rudd/Gillard government the surpluses were gone, the money in the bank was gone, the debt was back bigger than ever and accompanied by corresponding cuts to services and welfare to help fund the interest repayments. Job losses were high, business closures were high and the cost of living was exceptionally high yet it was actually Howard who left the country in bad shape?
The facts and figures say otherwise.
Refer to http://www.finance.gov.au/property/asset-sales/past-sales.html for information regarding the asset sales.