Budget reflections

While we will look in detail at the Federal Budget in Unit 4 there is a continuing stream of comment that raises points to note.

Below is a link to Ross Gittins latest effort. (You need to remember he is a journalist not a trained economist and sometimes gets the wrong end of the stick.)

In this article he points out the extent of the measures in cutting expenditure, the reliance on bracket creep (fiscal drag) to raise revenue and the redistribution effect from poor to rich (goal of equity).

Perhaps his most important point is that the implications of this Budget is that in the not to distant future the measures would have to be reversed because the implications are so grave. Note his point on ideology are not for repeating in the exam.

The Gittins article is here

As an add on there is an excellent article in The Guardian that explains what the true level of Australia's national debt is. The article also explains the importance of using real figures as opposed to gross figures and using figures as a percentage of GDP when trying to properly understand the debt position.

There are some neat interactive graphs to play with too!

The Guardian article is here