Meet Tony Abbott: Our biggest spending PM on education, health, and welfare.

So if you’ve followed the commentary on the budget over the past few months you would be forgiven for thinking that our Prime Minister was the enemy of public education, health and welfare. You would understand the narrative that Tony Abbott is the slash and burn Prime Minister, the heartless conservative who ripped billions out of the sectors that cater for the most needy. The conventional view is that he is the cruel, heartless, unfair Prime Minister.

So it might surprise you to learn that Tony Abbott is Australia’s biggest spending Prime Minister for education, health, and welfare. Need to do a double-take? Yes, Abbott is Australia’s highest spending Prime Minister for education, health, and welfare.

Okay, so you think I’m lying. So let’s check the facts. First, here is the budget projections for education spending over the next four years:

Source: ABC fact checker

The fact is that under the Abbott government, Commonwealth education spending will actually rise from $13.2 Billion in 2013-14 to $18.1 Billion in 2017-18. This represents an increase of 37.2 percent over four years.

The Labor Party and its sympathetic commentators fed the deception that the government is cutting $30 Billion from schools. This deception is fed by a technicality. See, the former government promised extra money to be delivered into the system in the never-never – during 2019-20 – far beyond the scope for treasury to provide solid economic figures or for the former government to actually fulfil that promise. It’s very easy to promise money years into the future, and then attack your opponents when they logically conclude that it’s too early to commit to such a sum.

The same goes for health spending. Under Abbott, Commonwealth spending for health is going up. To borrow from the ABC’s fact checker

Budget Paper No. 3 shows the following increases in public hospital funding over the forward estimates to 2017-18:

2014-15 2015-16 2016-17 2017-2018
National Health Reform Funding ($m) 15,116 16,551 18,095
Public Hospital Funding ($m) 18,872

Or let’s look directly to the budget papers:

health spendingAccording to budget projections, healthcare spending will continue to rise. Yet once again, because the former government made promises for funding beyond any years that they would be held accountable for such funding, the narrative about the nasty Abbott government takes hold.

The fact is that under Abbott and treasurer Hockey, funding for health and education is currently at record levels.

Yet the biggest surprise is in welfare, where spending is expected to increase by a whopping 16 percent from $145.8 Billion currently, to $169.6 Billion in 2018. Under Abbott, welfare spending will climb by nearly $24 Billion in less than four years….

welfare spendingAs you can see from the above graph, welfare spending far outweighs any increase in any other sector. In fact, the chart shows that the order of spending increases numbers welfare first, healthcare second, defence third, and education fourth. The real cuts in the budget are coming from other areas.

For all the talk about cuts, the truth is that Australia’s level of government spending is currently at record levels, even after taking factors like inflation into account. To quote from Trading Economics:

‘Government Spending in Australia increased to 68,422 AUD Million in the first quarter of 2014 from 68,186 AUD Million in the fourth quarter of 2013. Government Spending in Australia averaged 31,971.72 AUD Million from 1959 until 2014, reaching an all-time high of 68,422 AUD Million in the first quarter of 2014 and a record low of 8,290 AUD Million in the second quarter of 1960.’

Even relative to government spending as a percentage of Australia’s total economy (Gross Domestic Product), Abbott currently ranks, and is projected to rank, as one of the highest spending Prime Ministers of the past fifty years. Note the graph below, which shows government spending currently above 26 percent of GDP, significantly higher than at any time during the Howard years and even slightly above Rudd-Gillard at the height of their spending spree.

spending relative to gdp

It’s amazing what a little bit of fact checking can do. If you believe the hysteria of protestors on the street and from some commentary in the media, you’d think the government was a tyrannical pack of ideologues slashing government spending to the bone.

Yet when you look at the actual figures and do a little bit of homework beneath all the noise, you learn an odd truth: Tony Abbott is one of the biggest spenders of them all.





3 Comments on Meet Tony Abbott: Our biggest spending PM on education, health, and welfare.

  1. Christoph Blocher // August 11, 2014 at 11:53 pm // Reply

    Nice opinion peace, Dale.

  2. Ann O'Nymous // August 12, 2014 at 1:33 am // Reply

    During the election campaign, Labor promised to honour the Gonski proposal for six years. Abbott stated that “As far as school funding is concerned, Kevin Rudd and I are on a unity ticket” and “There is no difference between Kevin Rudd and myself when it comes to school funding”. Since the election, Abbott and Pyne have backflipped twice with regards to schools funding: once to deny promising said funding and the second time to begrudingly deliver only four of the six years originally promised. Respectfully, I’d say the lack of commitment to deliver the final two years of promised funding is in effect a cut back to what was promised, regardless of if treasury projects that far.

    On health funding, the increase from $15.116 billion to $18.872 billion over four years is equivalent to an increase of just over 5.7% per annum (remember, inflation is calculated as compouned interest, not simple interest). This is above inflation (generally taken to be 3-4% per annum) and a modest increase. Regarding welfare, the increase from $145.8 billion to $169.6 billion is in line with inflation, at a little under 3.9% increase per annum. In real terms, this represents a small increase.

    However, both the aforementioned calculations fail to take into account other factors which would undoubtedly impact the cost of these budget items; inflation only tells us what it would cost to keep things as they are. For instance, increases in the population, the aging of the baby boomers and the development of new medical interventions would all create more demand for services and increase costs. I’m sure there are many more factors exerting pressures on the budget.

    Taken altogether, these factors still don’t address the reasons for the recent protests: that this budget is fundamentally unfair to those who are worse off in society because it largely redirects funding from programs that assist them (e.g. unemployment benefit for under 30 year olds) to areas which would benefit those better off (e.g. paid parental leave for mum’s earning $100,000 a year).

    • Ann O’Nymous – well done you! You’ve managed to cut and paste the talking points from GetUp. Can you think for yourself??

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