Tax receipts down by $16.8 billion for the year - and $37 billion over the next four financial years - a gross debt likely to reach $460 billion by 2016-17, slower economic growth all but assured during that time, and an increase in unemployment to more than 6 per cent. These dreadful numbers in Tuesday's midyear budget forecast would not have been easy for Treasurer Joe Hockey to recite, even with the opportunity - duly taken - to assign all the blame to Labor. Far from adopting completely the mien of an undertaker, however, Mr Hockey was in an expansive, even upbeat mood. The fiscal and economic mountain Australia was now preparing to climb, the Treasurer said, was challenging, but no more challenging than climbing Mount Kilimanjaro.
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Mr Hockey can certainly attest to the rigours of climbing Africa's highest mountain, having reached the summit in 2009. But mountaineers do not regard Kilimanjaro as a particularly challenging climb. Whether Mr Hockey and the Coalition government have the discipline and resolve to conquer a budget deficit totalling $123 billion over the next four years remains to be seen. That the Treasurer did not even deign to identify a financial year when the budget might be back on black only underlines the extent of the challenge.
If nothing else, Mr Hockey deserves plaudits for stating plainly how voters would be affected. He affirmed that the Coalition would fix the budget and deliver a stronger economy, ''but it will need a response that has the support and active involvement of the entire community''. Australians ''will now have to adjust their expectations of what government can sustainably provide; otherwise, our nation's prosperity and our people's quality of life will be at risk''.
Seeking the electorate's co-operation and input in dealing with the economic ills laid bare by the midyear outlook would appear to have political, if not economic, virtue. The public's understanding - and patience - will be vital to the Coalition's hopes of securing a mandate at the next election to enable it to finish its repair job. To that end, Mr Hockey said again that it was important the government ''keep faith with the electorate on spending promises about health and education''. All of which strongly suggests that mothers due to give birth after July 2015 - when Prime Minister Tony Abbott's non-means-tested paid parental leave scheme costing $5.5 billion a year, including superannuation, begins - will not have to adjust their expectations.
Those who had hoped Mr Hockey would outline in more detail how the government will return the budget to ''sustainable surpluses'' went begging, however. All the Treasurer said was that piecemeal savings here and there would not achieve this goal, but only a sustained and fundamental overhaul of expenditure. Mr Hockey also ruled out, again, any increase in taxes, saying ''no country has ever taxed itself to prosperity''. That is demonstrably true, but countries that categorically rule out tax increases in times of national emergency while maintaining lavish spending on the well-off severely limit their ability to deal with that contingency.
The extent of the austerity Mr Hockey wants to impose on the nation will become clearer once his commission of audit reports in the new year. All options are reported to be on the table, but the government's reluctance to embrace any fiscal measure not already flagged to the electorate suggests that piecemeal savings will continue to be the order of the day. Austerity measures certainly help improve government finances, but they can trigger high unemployment, stagnant growth and other unpleasant fiscal side effects - as has clearly been shown in Spain, Ireland and Greece, where governments were ordered by the European Central Bank to tighten their belts as a response to the monetary crisis.
Given that the fiscal emergency of which senior Coalition figures spoke so insistently during the election campaign has been confirmed as a reality, the government has every justification for taking ''immediate action''. Its willingness to wait, therefore, until the budget in May to spell out what that might be is puzzling. For those who sense an unwillingness by this government to grasp the nettle, it's also worrying.
