Thursday, 8 November 2012

Budgets, costings etc

A lot of people say why is there a budget deficit when there is/was a commodity price boom.

These people have never examined budget papers. the latest MYEFO has this for Taxation as a % of GDP

  
  
2002-03192,13124.0  
2003-04206,09124.0  
2004-05223,31424.2  
2005-06241,21524.2  
2006-07257,39223.8  
2007-08278,37623.7  
2008-09272,62721.8  
2009-10260,97320.2  
2010-11280,83920.1  
2011-12309,94321.1  
2012-13(e)339,20922.2 



Being very conservative compare the yellow episodes with the blue ones.

If Swan had Costello revenue figures he would have few deficits at all. Costello would have few surpluses if he had Swan's revenues.

What is most important in examining future budget figures is nominal GDP. This has been lower than trend in recent times. Whereas real GDP has been higher than trend.

So the change from deficit to balanced budget has come from expenditure.

Joe Hockey has a bad memory regarding budget costing leaks .

There is nothing wrong with the government getting Treasury to look at Opposition policies.


The Opposition can now use the PBO to cost their policies.There is now no excuse for their costings debacle from the last election.