2017-18 was a bumper year for government revenues, which rose by $20 billion, or 6.9 per cent, from the previous year.
Personal income tax increases accounted for half of that flood of new money coming into the coffers, around half of which was related to economic growth and the other half to the unwinding of tax planning that had suppressed revenues in 2016-17 (when the Liberals announced they were going to raise the top rate of income tax to 33 per cent in late 2015, there was a rush of filing by high-income earners to declare income at the lower rate).
Yet, rather than reduce the deficit and pay down debt in preparation for the next recession, creeping toward them as inevitably as mortality, the Liberals spent the lot. In 2017-18 expenses amounted to $332.6 billion — breaching the $300-billion mark for the second time — up $20.1 billion, or 6.4 per cent from 2016-17.
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