Tuesday, 12 May 2015

Budget part two

The budget has been delivered.

It is strange. Some expansionary measures and some contractionary measures. all up it adds less to GDP than the average.
I would have thought spending on Infrastructure  was the way to go given the impact it has on the economy but no infrastructure spending is very low .( What happened to the Infrastructure PM?)

The main way the deficit reduces is by bracket creep. The revenue elasticities are very much at the high end given nominal GDP.

It appears to me they have gambled this will give a small boost to GDP and then trend GDP will do the rest revenues recover .

Perhaps it may.

Whoopsy.
I should have added although it is clearly an election budget, very few election budgets work these days. Ask Peter Costello

Update

The Kouk does not like the high spending. I tend to agree. one only needed a modest stimulus and on infrastructure.
The inimitable Greg Jericho shows what is occurring in graphical form.
Steve from Brisbane gives us John Daley who has a good take as well.

I should have added count me as a sceptic of the revenue the government will get from Companies, social security applicants etc.  Experience tells me they will get none of this. They are also reliant on measures stil locked up in the Senate.

Further Update:

Sinkers again does not say if the budget is expansionary or contractionary. Still burnt by his absurd comments on Swan's last budget. ( The last one he had full  responsibility for.)