Howard, Rudd squandered mining boom
AT LEAST $75 billion in mining revenue was squandered by the Howard and Rudd governments, with new research finding it funded tax cuts, the fuel excise and even voluntary superannuation contributions, according to independent research group Per Capita.
In its After the Party report released this week, Per Capita charted how the money from digging up Australia was spent before the global financial crisis hit hard.
The authors of the report estimated that Australia was blessed with $180 billion beyond long-term budget projections at the time.
"What did we do with this bounty? Just over half of the windfall, $105 billion, was used by the Howard and Rudd Governments to shore up the fiscal position of the Commonwealth," it stated.
"We paid off $36 billion of sovereign debt and put $69 billion into long-term savings funds. This was the responsible course of action."
But the leftover $75 billion was described as a "lost opportunity" that could have delivered everything from high-speed rail on the east cost, hundreds of thousands of trade cadetships or supplied solar power to the mining industry.
"The Howard Government gave at least $25 billion away in tax cuts and concessions, on everything from fuel excise to voluntary superannuation contributions.
"It used another $50billion on inflated spending programs and various cash handouts, from the baby bonus to the First Home Owners' Grants.
"These costs were ongoing, leaving Australia in a tough position when the world suddenly changed during the GFC.
"The combination of tax cuts and spending growth left Australia ill-prepared for a change in economic circumstances.
"Most of the tax and spending changes were presented to voters as permanent benefits."