Tuesday, 23rd October 2012

BUDGET TALK

The language used in response to budget announcements is always instructive.

The government's release yesterday of the Mid-Year Economic and Fiscal Outlook was met with the usual cries of 'slugging' business and 'slashing' family payments (the baby bonus and health insurance rebate), but a greater preponderance of 'juggles', 'shuffles' and 'fiddles'.

Wayne Swan pulled some very neat accounting tricks out of the bag, and it is mainly these – rather than any substantial spending cuts or revenue increases – that have allowed the government to maintain the impression it will deliver a slim surplus.

Most commentators and economists question whether the surplus is actually deliverable (or desirable) under current economic circumstances; and, as Phil Coorey notes, the government appears to be preparing for this – note Swan and Wong's talk of deteriorating economic conditions and 'getting the budget settings right', rather than promising anything.

But, for better or worse, the government has given itself until the next federal budget in May to address Australia's long-term budget problems. That's a long time in politics.

Nick Feik
Politicoz Editor

Sign up to get Politicoz delivered
to your email address every weekday at lunch time.

Baby bonus, health insurance chopped for surplus

"Labor will raise $700 million by cutting the private health insurance rebate as it scrambles to make sufficient budget savings to deliver a $1.1 billion surplus this year."

Slender Surplus Hangs In Balance

"The federal government is prepared to jettison its promise to return the budget to surplus this financial year rather than make further harsh cuts should economic conditions continue to deteriorate, it has been revealed."

Also: New Sexism Row Looming After Abbott's Comments on Government's 'Inexperience' With KidsDaily Telegraph

The Politics of Surplus

"The overriding goal of this budget update is to ensure that the accounts for 2012-13 end up in surplus. That is not because the economy requires it – take out mining investment and the rest of the economy is anaemic – but because Labor pledged to deliver a surplus, and the Liberals have used their rhetoric to make it the test of Labor's ability to manage the economy."

Wayne Pushing Revenue Side Of The Ledger Up A Steep Hill

"The Treasurer wants the revenue side of the budget to expand from a sickly 22.5 per cent of gross domestic product in 2011-12 to a more normal level of 24 per cent this financial year. That 1.5 percentage point shift would be the largest since the mid-1980s. But that recovery was aided by a jobs boom and rising inflation. Swan has neither the upfront benefit of a faster economy, nor the backdoor advantage of bracket creep."

We're Awash With Benefits, Yet So Many Still Go Without

"Last week the Australian Council of Social Services released a report which said that 13 per cent of the population – more than one in every eight Australians – was living below the poverty line… Over 2.2 million of our fellow citizens, almost 600,000 of them children, are trying to make do in the kind of hand-to-mouth conditions we normally associate with refugee camps. How could it come to this in an economy which, we are frequently told, is the envy of the industrialised world?"

4 Dynamics To Watch At The High-Stakes Final Debate

"Romney will go after Obama for weak leadership, with an emphasis on Israel, Iran, and the current turmoil in the Mideast. Obama will seek to paint Romney as a reckless, inexperienced warmonger who will bring back unpopular Bush administration policies… The last debate also comes against the backdrop of a presidential horse-race in which Romney has surged and Obama's lead has shrunk. Here are a few things to watch for."

×
×