Economists from across the spectrum roundly agree that the Government has made the right call for Australia's future, but it still faces criticism. As we start a new year, it is time to aim for an economic debate grounded in facts, writes Penny Wong.
A lot has been said and written in recent weeks about Australia's economy and what the dramatic fall in revenue means for the budget.
Much of the commentary has ranged from incorrect to bizarre, confused to misleading, continuing the well-worn tradition of never letting the facts get in the way of a good argument.
But as we start a new year, why don't we take the opportunity to aim for an economic debate grounded in facts? Given the widespread criticism of our national political debate this might be a New Year's resolution Australians would welcome.
Fact One: The global financial crisis has resulted in significant revenue write downs
While Tony Abbott and the Opposition would like to pretend it never happened, the global financial crisis was the most difficult global economic period since the Great Depression and its effects are still being felt.
There continues to be uncertainty in the global economy and recently, the unusual combination of a persistently high dollar in the face of lower commodity prices has hit Australian company profits, which means the Government is receiving less in taxation revenue than expected.
In fact, over the last five years, government revenues have been written down by $160 billion. Since 2010, revenue for 2012-13 alone has been written down by a staggering $20 billion.
These dramatic falls in revenue put significant pressure on the federal budget.
This situation is not driven by discretionary spending decisions, but by the fact that the Government is receiving less tax revenue for a given amount of economic activity.
Yet despite this, some continue to misleadingly argue that the problem is the Government spending too much.
Fact Two: We are spending less and making responsible savings
One of the most effective ways to assess government spending is to look at it as a proportion of GDP.
Spending is at or below 24 per cent of GDP over the budget period which is the longest sustained period of spending at this low level in over 30 years.
An IMF study released last week shows this Government has made responsible spending decisions, while the Howard government clearly missed opportunities to effectively use the mining boom and strong global economic conditions to invest in Australia's future.
The report again debunks the myth frequently repeated by Tony Abbott and Joe Hockey that the Howard government exercised spending restraint.
Since mid-2009 this Government has offset all new spending decisions. We have identified nearly $140 billion in savings over the last five budgets, plus $16 billion in our most recent budget update.
Ironically, a number of these savings measures have been opposed by the same politicians who now call for more cuts.
The significant savings decisions we have made will ensure a sustainable budget into the future.
Responsible fiscal policy is our key defence against global instability. That's why we'll continue to exercise the spending restraint which has seen Australia achieve one of the strongest budget positions in the developed world.
Fact Three: Australia's economy is resilient in the face of global uncertainty
Australia was one of only three advanced economies in the world that avoided recession during the global financial crisis, as a result of the actions of this Government and the collective efforts of Australian business and employees.
Our economy is today 13 per cent bigger than it was when we came to office, while other developed countries, including the UK, are struggling to return to their pre-GFC levels.
At 5.2 per cent, Australia has one of the lowest unemployment rates in the developed world; while millions of people lost their jobs around the world as a result of the global financial crisis, more than 800,000 jobs have been created here over the past five years.
We have a strong public finances in Australia and continuing our fiscal consolidation will keep our economy strong.
Running a tight ship also means the RBA has the flexibility to cut interest rates if it deems appropriate which, for example, assists the transition from mining to non-mining sectors of the economy, not to mention families with mortgages and small business owners with loans.
A family with a $300,000 mortgage is today paying around $5,000 a year (or around $100 a week) less in repayments than they were in 2007.
So it's time for those on the other side to stop talking our economy down and making the extraordinary claim that we're on the same fiscal path as Greece or Ireland.
It's simply irresponsible and it's incorrect.
Ultimately, the Government's focus must always be on making the right economic calls to support jobs and growth. Australians rightly expect this of us.
While Australia's economic fundamentals are amongst the strongest in the world, global factors, commodity prices and a high dollar have weighed more heavily on tax revenues than expected. To engage in drastic short-term cuts could risk economic growth and jobs.
That's why last month the Treasurer made it clear that a return to surplus is now unlikely - because we will always put jobs and Australians first.
Economists from across the spectrum roundly agree that we have made the right call for Australia's future, but unsurprisingly, the Government has been subjected to some criticism for this decision.
As Treasurer Wayne Swan said in December, if our decision to not drastically cut spending to meet revenue shortfalls means some commentators say we got the politics wrong but the economics right, then we're willing to wear that.
Making the right economic choices for today requires putting the economy and Australian jobs ahead of politics and negativity.