Essays on Various Arguments Regarding Australias Revenue versus Spending Position Case Study

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The paper "Various Arguments Regarding Australia’ s Revenue versus Spending Position" is a good example of a macro and microeconomics case study.   In recent times, Scott Morrison – who is the treasurer of the Commonwealth of Australia, was one of the people who argued that “ Australia does not have a revenue problem” , and instead suggested that the country “ has a spending problem” (Grudnoff, 2015). This view is driven by the notion that Australia has adequate revenue but faces a problem when it comes to spending the revenue prudently. Others, like John Fraser who is Australia’ s Treasury secretary, are of the view that Australia has economic problems on two fronts: spending and revenue (Hutchens, 2016).

Still, there are others like Cassandra Goldie – chairman of the Australian Council of Social Service (ACOSS), who have suggested that Australia has a revenue problem (“ Does Australia have a revenue problem” , 2014), meaning that the country gets less revenue than its expenditure. The different views given by different people regarding the state of Australia’ s economy make it difficult for one to tell the exact position of the country’ s economy.

This essay will explore the different arguments and give an opinion as to whether Australia has a revenue problem or a spending problem. Various arguments regarding Australia’ s revenue versus spending position According to various newspaper articles, the treasurer of the Commonwealth of Australia, Scott Morrison, suggested that Australia has a spending problem and not a revenue problem (Grudnoff, 2015; Jericho, 2015). Based on this point of view, it is argued that Australia has a problem in terms of its budget in that the country is spending more than the revenue that it gets (Jericho, 2015, para.

1-2). There are several points to support this notion. To start with, former Treasurer of Australia, Joe Hockey who served between September 2013 and September 2015, noted in an interview in February 2015 that Australia was spending $100 million per day more than it was collecting in revenue (Stewart, 2015). While noting that such a level of spending was unsustainable, Hockey also added that Australia was spending approximately $40 million per day as part of the interest on the debt that the country had by that time (Stewart, 2015).

Yet this was not the first time that the former treasurer of Australia was alluding to the fact that Australia’ s expenditure exceeds its revenue collection. Earlier on, Hockey had made similar statements in interviews while supporting the position of the Australian government that there was a need to implement cuts on spending so as to reduce its deficit (Stewart, 2015). Evidence that Australia is spending more than the revenue that it collects can also be seen when one looks at historical figures. Data from Trading Economics (2016) shows that since in 2002, Australia’ s government spending has increased almost steadily to the current period (2016).

As figure 1 shows, the government’ s spending grew from about 5000 Australian dollars in 2002 to about 7500 Australian dollars in 2016. Figure 1: Australia government spending, 2002 to 2016 Source: Trading Economics (2016) The level of the Australian government’ s spending can be better understood by comparing expenditure on Australia’ s gross domestic product (GDP). According to Stewart (2015), in the period between 2002 and 2016, spending has increased by 1 per cent of the country’ s GDP while revenue has decreased by 1.5 percent.

As a matter of fact, in 2002, Australia’ s budget was in balance since revenue and spending were both 25 per cent of the country’ s GDP (Murphy, 2015, para 8). However, the situation has changed in that currently, Australia’ s spending is 26 per cent of GDP while revenue stands at 23.5 percent of GDP (Murphy, 2015, para. 9).


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Grudnoff, M. (2015, September 25). Morrison says spending, not revenue, is the problem - sound familiar? ABC. Retrieved from

Hutchens, G. (2016, January 29). Treasury secretary John Fraser: Australia has a spending and a revenue problem. The Sydney Morning Herald. Retrieved from

Jericho, G. (2016, March 2). Is Morrison right about a spending problem after all? ABC. Retrieved from

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Murphy, K. (2015, September 23). Scott Morrison: Australia has a spending problem, not a revenue problem. The Guardian. Retrieved from

Stewart, M. (2015, February 13). Fact check: Is Australia spending over $100m a day more than collected in revenue? The Conversation. Retrieved from

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