He also now knows that estimating government revenue and expenditure and getting the budget into surplus is not quite as easy as he thought when he poured scorn on former In addition Hockey wants us to believe that we won't see a surplus in his term simply because he's copped low iron ore and coal prices and an obstructionist Senate. His Mid-Year Economic and Fiscal Outlook statement tells us part of the story. But it's not the whole truth. It states that iron ore prices, currently at $US63 a tonne, are around the lowest level since But what it doesn't say is that 2009 was a year of historically high prices. When Labor came to government in December 2007 the iron ore price was only $US38 a tonne. A year later it was $60 a tonne, a price well below that at the start of this financial Not only that, we must also keep in mind that this year exporters have dramatically lifted the volume of iron ore exports, raising overall revenue.

There are a few other little things Hockey doesn't draw attention to, though they're in the MYEFO documentation. You recall that evil Carbon Tax. Well this financial year the government will happily collect $1.8 billion from it - $105 million more than expected in its budget. Resources Rent Tax, which it let run until September 30. But the biggest deceit in ministers' statements is the implication that they're dealing with a major economic crisis. This is not 2008. We are not threatened with a run on the banks, requiring immediate government action. Worldwide confidence has not collapsed, with major companies going broke. China is not about to introduce a 4 trillion renminbi ($800 billion) stimulus Labor dealt with that crisis, keeping Australia out of recession and preventing a blowout in The MYEFO assessment is that the global economy is recovering from the financial crisis but at a slower pace than expected at budget time.

For Australia the only significant thing that has happened in the global arena is that prices for In the technical jargon, our terms of trade (that is our export prices related to our import prices) are now at about the level they were in 2003 and are still well above their level for the past 30 years of the 20th century. No, here's the crisis. We have a bumbling government which took its pre-election instructions from the mining industry and has since done its bidding. It got rid of the mining tax and it got rid of the carbon Given the sharp rise in the volume of iron ore exports, a tonnage export levy would be a simple and more assured way of raising revenue than the complex resources rent tax that But this is not something the business representatives who are trotted out to comment on the economy will embrace. consultant to the mining industry.)

Local production and import-replacement doesn't matter. So if Queensland produces $20 billion worth of export coal it's of great importance. But when Victoria produced $20 billion worth of oil, which we consumed in Australia and generated billions in government revenue, When we put mining into perspective, we find that from World War II until 2009 its share of total employment was less than 2 per cent and rose only to a peak of 2.4 per cent between The mostly foreign-owned large iron ore companies would squeal blue murder if a political Nor it seems is it keen to join the international campaign to tackle tax avoidance by It also refuses to consider another reasonable revenue option – removing at least some of the tax concessions for superannuation. The MYEFO shows that this year alone the concessions are worth $36.25 billion.

One proposed change is that the government should tax the compulsory superannuation contributions as income, rather than at the concessionary 15 per cent rate. By some estimates this would generate a healthy $12 billion a year and just about fix the short- and medium-term deficit problem in one hit. The real economic and political problem the government faces is rising unemployment, a He's simply going to let the "economic stabilisers" (such as increased social services