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Speaker 1: Well, we were expecting the government's books to be bad,

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Speaker 1: but probably not as bad as they ended up being.

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Speaker 1: Surplus won't happen by twenty twenty eight that's now been

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Speaker 1: pushed out so far doesn't even show up in the

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Speaker 1: Treasury forecast, meaning it's going to be some time in

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Speaker 1: the twenty thirties and we're going to have to take

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Speaker 1: on twenty billion dollars worth of debt in the next

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Speaker 1: four years just to make the ends meet. Joining me

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Speaker 1: now is former PwC partner and independent tax expert Jeff Nightingale.

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Speaker 1: Good morning, Jeff, good morning. Here are you expecting this?

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Speaker 2: Well, it's actually but grimmer than even we were expecting.

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Speaker 2: The economy has deteriorated faster in the last six months,

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Speaker 2: and I think many of us expected.

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Speaker 1: So based on that. Given that that it's worse than

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Speaker 1: we expect, and we look at the figure showing that

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Speaker 1: we're going to grow somehow at three point three percent

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Speaker 1: and twenty twenty six, do you believe that, Yes.

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Speaker 2: I do. I think growth is coming, interest rates coming down.

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Speaker 2: It's very important that there are green shoots of economic

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Speaker 2: activity that you can see around us. Unemployment's not as

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Speaker 2: bad as it was wages arising faster, and all of

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Speaker 2: those things will contribute to the growth. So I don't

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Speaker 2: think the growth forecasts are optimistic, too optimistic. But the

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Speaker 2: worrying trend is that the government expenditure is persistently higher

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Speaker 2: than the government revenue. So we're running efforts, as you said,

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Speaker 2: right through to twenty twenty nine.

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Speaker 1: Yeah, I was just about to ask you about that.

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Speaker 1: Why do you think they can't get on top of

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Speaker 1: the expenditure.

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Speaker 2: Yeah, Look, it's really hard. They've taken a lot of

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Speaker 2: political hits and used up a lot of political capital

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Speaker 2: to drive cuts in government expenditure. But what the forecast

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Speaker 2: shows that they're really not getting traction. And you know,

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Speaker 2: as you said in your opening, we're going to borrow

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Speaker 2: another fifty billion dollars over the next four years, and

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Speaker 2: you know most of that will be on operation expenditure

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Speaker 2: rather than capital expenditure. So you know, bad debt not

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Speaker 2: good debt. There's three big drivers that are really hard

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Speaker 2: to get on top of. What one has benefits in

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Speaker 2: the biggest component of dat is national super Second one

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Speaker 2: is the finance costs of the debt. We've already wrapped

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Speaker 2: up so that we're paying interest of about eight or

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Speaker 2: nine billion a year now. And then the third thing

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Speaker 2: is new spending just because of population increases and residual inflation,

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Speaker 2: you know, just to stand still, we have to spend more.

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Speaker 2: And so it's a pretty tough ask, and I think

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Speaker 2: what the forecast shows is they're not yet getting on

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Speaker 2: top of it.

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Speaker 1: You're quite right, Jif. Thank you very much, Really appreciate

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Speaker 1: your expertise. Jef Nightingale Form PwC partner and independent tax experts.

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Speaker 1: For more from The Mic Asking Breakfast, listen live to

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Speaker 1: news talks.

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Speaker 2: It'd be from six am weekdays, or follow the podcast

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Speaker 2: on iHeartRadio