Sunday, 14 May 2017

Some further thoughts on the Budget

There are a few things on the budget that I did not comment on at length.

This budget has gone back to the long term average of all budgets in that it will add about 0.8 percentage points to annual GDP. Previously the coalition has added about half this. It has not detracted from GDP as Wayne Swan's last budget did.

It is also interesting that having been in power now for four years the coalition has made no headway into reducing the structural deficit. The underlying deficit reduces because of cyclical factors.

Why will wages breakout? Unemployment does not fall. Are they assuming that full-time employment takes in a much greater proportion of total employment? We are not told.

This budget holds to the coalition strategy ,  even in the woeful 2014 budget ,  that most of budget repair is due to an increase in  revenue not spending cuts.