by Trader » Wed May 10, 2023 8:56 pm
Bit of a nothing budget for mine.
It’s not bad, but it’s not good either.
Nice to be back in a surplus (the first surplus ever delivered by federal labor) but it isn’t a structural surplus; that is to say it’s not as a result of good management or cost saving measures, but rather a fortunate result with higher than expected commodity prices leading to excessive revenue from our resources (as a result of the Ukraine war, amongst other things). Then naturally the budget is still forecast to return to deficit next year.
It’s a political surplus more than anything. In two ways really. Firstly the windfall from the excessive tax on resources wasn’t “banked” by labor, but rather they took the opportunity to spend all but the last little bit of that. Over 85% of the win was spent on additional items. Secondly, the surplus doesn’t reduce the government debt at all. Yes $4b sounds like a lot, but when the debt it $1700b, the interest owed on that debt is roughly $70b, hence debt will still rise by roughly $66b this year.
Still, political or not, a surplus is still nice and certainly better than the alternative.
The commentary around tackling inflation through $500 energy rebates lacks honesty. Sure, they’ll help with growing cost of living pressures for those that are eligible, however they don’t tackle inflation, and if anything, are inflationary themselves, albeit somewhat minor in comparison to the size of the budget. Similar with the $40 increase to the various welfare payments. These are inflationary, and also work against the 11 interest rate rises the central bank have rolled out over the last year. Typically the economy performs better when government policy and monetary policy work together, rather than in competition. Once again, not huge numbers, but still interesting to note nonetheless.
The biggest takeaway for mine was the stark lack of infrastructure related projects. These project are required to ease congestion on roads, rail and at ports. As we’ve seen over the last 2 years, transportation costs have gone through the roof and transportation is a portion of just about every product we consume in life. Infrastructure projects are important to developed economies and communities, not just saving time through reduced congestion as populations continue to grow, but also making things safer too. Labor typically don’t spend big on infrastructure, so I’m not shocked, but it was noticeable nonetheless.
No surprise the greens are complaining as usual. Doesn’t matter what you give them, they always want more. They are like a three year old, no point trying to explain logic to them.
I think the environment has done fairly well in this budget, they should be thankful.
The good news is they haven’t gone after the stage three tax cuts, that will see lower tax for anyone earning more than $45,000, but then again, they don’t come into play until July 2024, so there’s still another budget this time next year for them to change their mind and go back on that election promise, fingers crossed they don’t as I think we all know the middle class who pay tax can do with some assistance with the cost of living like those on welfare all got this year.
Danny Southern telling Plugga he's fat, I'd like to see that!