Friday, December 21, 2012

What? No surplus? The morning after

Mitchell: Yes, you can argue, as Joe Hockey does, that the budget should have been in a surplus long before now. But, given the situation in which the government now finds itself, the Prime Minister had no option but to drop her plan to push the budget into surplus this financial year.

Beacher: This announcement should not surprise any rational-thinking analyst, merely confirming that this increasingly political commitment was not prudent during these uncertain economic times. We welcome the announcement, and should be market and ratings neutral.

Maiden: Wayne Swan's decision to jettison Labor's commitment to get the budget into surplus next year is only a big deal for the economy and perceptions of its management if Labor does what Swan says it won't, and attempts to buy itself another term in office.

AFR: The basic problem is that the unusual set of circumstances that Mr Swan used to explain his broken promise are more like the new normal. Australia’s looming budget crisis is not a short-term problem.

Uren: Canberra now has no strategy for returning the budget to surplus beyond the hope that the revenue shortfall proves to be temporary.

Koukoulas: In my assessment of economic risks, it is not a long shot to envisage a slightly stronger economic outlook in the first quarter of 2013 and for the government to get a pleasant budget surprise in in the lead into the budget in May. That would be interesting.

And some memories...

Julia Gillard In the Black April 19 2012.doc

Related Posts

. The OECD to tell the truth about our surplus

. Lower growth, lower rates, no surplus. The GDP washup

. Straight talk from the IMF about that surplus: we might have to postpone it


Marek said...

according to Adam Carr
govt was forecasting a cut in spending of 2% or thereabouts. Looks like spending is going to be up around 6%

Anonymous said...

Govt made this an issue by making it a promise. My guess is that Treasury were over confident about their ability to forecast revenue and have now realised that they got it very very wrong. Maybe instead of focussing on the 'broken promise' journalists might ask the question of how Treasury could provide such poor advice?
I doubt it though, your a bit to close to Treasury aren't you Pete?

KnifeySpoony said...

It would be nice to see a relatively in-depth article/post/whatever detailing why govt revenues are struggling so much. We've seen trend growth or just above/below for the last few years yet we're not seeing anything like the budget revenues of the early 00s. Which parts of the tax take are lagging (besides the GST which is more of an issue for the states). Were the income tax cuts promised in 2007 unsustainable? Has corporate tax income stagnated?

Peter Martin said...

The in-depth post will have to wait, KnifeySpoony.

It's company tax. It hasn't bounced back at anything like the rate (rates) predicted after the global financial crisis.

KnifeySpoony said...

fantastic, looking forward to it. Merry Christmas!

Anonymous said...

have a lok at Mark the Graph for looking at all the tax implications.

It aint just company tax that is lacking

Post a Comment