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2010 Federal budget

A boring budget that should help Labor regain some votes.  Labor didn’t have much money to throw around so that – making a virtue of necessity – not much will be thrown around – at least immediately.  Watch for the big promises as the election approaches – particularly if rudd’s popularity continues to wane in the polls. The budget details are here. I am keen on proposals that reduce the need to spend time filling in tax returns and interested to see how that pans out.

There is a strong growth in tax revenue with company, individual and resource taxes growing strongly mainly on the back of the resources boom – thye terms of trade are forecast to improve 25% in the first half of 2010.   Total public spending at $343 billion is still growing a bit faster than inflation. Health and social welfare spending are still growing strongly.

7 comments to 2010 Federal budget

  • observa

    Will Labor make it to an election before the world really wakes up to what’s going down everywhere-
    http://www.realclearpolitics.com/articles/2010/05/10/the_welfare_states_death_spiral_105503.html
    The worry is we’ve just had a whiff that the markets are starting to go for gold.

  • hc

    Observa, I am not sure the reality is true but I am sure that Samuelson identifies the core public concern. Could it happen to us? There are negligible links between Greece and the world but many countries look like Greece in terms of their amazingly high debt. To quote your link:

    “What we’re seeing in Greece is the death spiral of the welfare state. This isn’t Greece’s problem alone, and that’s why its crisis has rattled global stock markets and threatens economic recovery. Virtually every advanced nation, including the United States, faces the same prospect. Aging populations have been promised huge health and retirement benefits, which countries haven’t fully covered with taxes. The reckoning has arrived in Greece, but it awaits most wealthy societies”.

  • observa

    The Austrians are calling it everywhere here-
    http://blog.atimes.net/?p=1463
    and here-
    http://www.atimes.com/atimes/Global_Economy/LE11Dj04.html
    and here-
    http://www.atimes.com/atimes/Global_Economy/LE13Dj01.html

    As is pointed out, Govts eveywhere bailed out their rotten banks so noone was a loser apparently. That simply transferred the underlying obligations to taxpayers. So when Greece(ie a Govt) threatens to bring down the EU Govt house of cards and spread even further, they simply create another trillion US dollars of taxpayer obligations presumably as bank assets. With no political end in sight to this fiat money creation process, or any real anchor to its value, naturally holders are getting increasingly nervous. Where could they possibly seek an anchor of value? In the rock of ages- gold. Are we about to see the demise of fiat money and a natural return to gold exchange in order to achieve what Austrians always knew has to happen now- “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate … It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people … ” Or will our Keynesian/Goldman Sachs world continue unabated?

  • Uncle Milton

    “many countries look like Greece in terms of their amazingly high debt”

    No one is as high as the Greeks, but the essential point is that other countries have the institutional capacity to raise the necessary taxes if need be, and economies capable of generating those taxes. Greece does not.

    The problem with Greece is that it is a country. If it was a just a basket case region within a big country, it could kept alive on the drip from the centre.

    We have no public debt to speak of and are in a completely different position. Of course the ageing of the population is an issue to be deal with, as successive Intergenerational Reports from the Treasury have shown, But that does not mean we are headed for disaster.

  • observa

    I see the battle lines are set for the election now. There’s no doubt Rudd thinks he’s on a winner playing to the gallery with a mining tax grab and to some extent resource taxing makes sense.(my own view is it makes huge sense if you dispense with all the other taxes)It’s sound wedge politics for Labor, given they’re between a rock and a hard place on deficit spending now. The pundits are beginning to question the big fiddle http://www.adelaidenow.com.au/business/sham-budget-built-on-two-great-fiddles/story-e6frede3-1225865927498
    That mightn’t have much impact on joe public though, who might overlook that ridiculous 6% threshold for the headline millions and billions of earnings they are continually barraged with. Basically if they can’t get the finance sector and their bonuses they might as well take it out on the mining sector eh Kev? The major risk for him now is another global meltdown and a crash in commodity prices and then the gambit comes unstuck. We’ll see.

  • blue bird

    China knows well itself and the adversaries. As long as China’s economy will increase, they will stay in the status quo, but when the china’s economy growth will level at 3 percent increase or so, then will be the time to be worried. Unfortunately this will happen one day, and they will have nothing to lose but to win ….
    Keep well in mind that, not long ago they were communists, and still remember the saying:
    The proletarians have nothing to lose but their chains. They have a world to win. …

  • I’m impressed! After reading your post I can tell you are well-informed about your writing. If only I had your writing ability. I look forward to more updates and will be returning.Cheers!

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