The Government released its MYEFO yesterday. Stephen Bartos gives us his thoughts which are pretty reasonable.
No question taxation receipts are helping repair the budget but some spending proposals are as well. As you learn in economics taxation is as important as spending as to how it affects the economy.
The budget is slightly restrictive and as I have argued before that is all we can hope for given the previous Government did NO budget repair at all. you do not make big calls on the structural side when the central bank of the day is raising interest rates. you do it before. As Ken Henry has argued the budget should be in surplus ( or even just balanced) when the central bank starts raising rates.
The Stage 3 tax cuts look very inopportune as they did when passed into law. It is a shame the government does not attempt to change them.
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