Tuesday, 3 May 2016

The budget

This is a budget for cognitive dissonance.

The coalition says the problem is about spending. however they have increased spending since gaining office. They still have not gotten spending down to the levels they were when they won the election.
The deficit is nowhere near the levels they inherited of 1.9% after three years.
Morrison was as dear in the headlights last night when interviewed by the Smiling Assassin Leigh Sales. She brought up these very points and in essence he had no answer apart to implicitly blame Abbott and Hockey for his predicament.

I tend to think the deflation we saw from the CPI release has caused large amounts of worried sweat to come out on all econocrats. The RBA has cut rates and this budget has eased policy  very minutely. It adds a tad more to GDP then was envisaged on a no change of policy basis. It is almost half of what the long term average has been  BUT it is nowhere near the 0.7 percentage points Swan hacked off GDP in the last budget he had responsibility for.

See Greg Jericho , Stephen Grenville , Trent Sainsbury , Ross Gittins. John Daley and Danielle Wood. Saul Eslake