2006 Budget
In a nutshell - lotsa goodies for upper-mid and high income earners. Some lipservice to roads and childcare. An improvement in the super policy.
But the Government is behaving like someone who has just won the lotto, bought a mansion, a Porsche and is now off on a 1st Class around-the-world trip. Problem is, when they get back, they won't have enough money to pay the electricity bill, or put petrol in the car. What I'm getting at is the commodities boom - its raking in millions of dollars in tax revenue at the moment. Fine. But what happens when it all ends?
Australia will have nothing to show for the years of boom, and leave behind no lasting infrastructure or nation-building improvements. There was not an iota to address the skills shortage in the budget. Nothing for telecoms. Not much for key transport infrastructure.
Right now, we are extremely fortunate. And the Government should be using this windfall to expand the Australian economies capacity. Instead, its being frittered away on political expedient expenditure.
What is even more worriesome, is that whilst Australia's commodities are highly sought after, and we are making a motza, instead of building Australian industry, the Government is encouraging us to purchase more overseas goods. Australia's export debt is running at 6.5% of GDP - a very unsustainable level. Eventually, our borrowings will come back to bite (not to mention the billions of dollars of interest flowing overseas each year!). At a time when our export performance is up, we are INCREASING our overseas debt faster than ever. What will happen if and when the boom ends? We could be setting ourselves up for a major economic disaster.
Furthermore, on interest rates, this budget was highly stimulating - and unless the capacity of the economy, particularly in the workforce, is increased, there will continue to be upward pressure. Demand will not reduce, so the only way to keep downward pressure is to increase the entire economic capacity. I sympathise with Paul Keatings indignation that he set up the modern Australian Economy, and Howard has claimed credit for it. And Labor are doing nothing to correct this perception in the minds of Australians. Somehow, the Liberals are the "good economic managers". No, they are lucky to get in when they did, and have done nothing to better the future of this country. THere is every possibility of a major economic correction, and with the slashed public services, health, education and particularly, IR protections, any downturn will hurt - and will hurt badly. And the resale value on Plasma TV's is probably not going to let you fill your car more than twice.
But the Government is behaving like someone who has just won the lotto, bought a mansion, a Porsche and is now off on a 1st Class around-the-world trip. Problem is, when they get back, they won't have enough money to pay the electricity bill, or put petrol in the car. What I'm getting at is the commodities boom - its raking in millions of dollars in tax revenue at the moment. Fine. But what happens when it all ends?
Australia will have nothing to show for the years of boom, and leave behind no lasting infrastructure or nation-building improvements. There was not an iota to address the skills shortage in the budget. Nothing for telecoms. Not much for key transport infrastructure.
Right now, we are extremely fortunate. And the Government should be using this windfall to expand the Australian economies capacity. Instead, its being frittered away on political expedient expenditure.
What is even more worriesome, is that whilst Australia's commodities are highly sought after, and we are making a motza, instead of building Australian industry, the Government is encouraging us to purchase more overseas goods. Australia's export debt is running at 6.5% of GDP - a very unsustainable level. Eventually, our borrowings will come back to bite (not to mention the billions of dollars of interest flowing overseas each year!). At a time when our export performance is up, we are INCREASING our overseas debt faster than ever. What will happen if and when the boom ends? We could be setting ourselves up for a major economic disaster.
Furthermore, on interest rates, this budget was highly stimulating - and unless the capacity of the economy, particularly in the workforce, is increased, there will continue to be upward pressure. Demand will not reduce, so the only way to keep downward pressure is to increase the entire economic capacity. I sympathise with Paul Keatings indignation that he set up the modern Australian Economy, and Howard has claimed credit for it. And Labor are doing nothing to correct this perception in the minds of Australians. Somehow, the Liberals are the "good economic managers". No, they are lucky to get in when they did, and have done nothing to better the future of this country. THere is every possibility of a major economic correction, and with the slashed public services, health, education and particularly, IR protections, any downturn will hurt - and will hurt badly. And the resale value on Plasma TV's is probably not going to let you fill your car more than twice.
Like they said, an election budget in a non-election year.
My viewpoint is that this has something to do with the transition of the Liberal Leadership. If you have been given an indication that it will be your last budget, and there is a need to improve your profile, then you might as well spend up big.
Just this week, Howard and Vaile both happened to be out of the country for the week. A coincidence? Hardly. Costello was acting Prime Minister - a very rare occasion considering the division of power with the Nationals.
I say keep an eye out for other moves of Costello's profile raising that seem to have full government endorsement. It may suggest a change of leadership.
As for Federal Labor, I still say go Kevin Rudd. I heard him do a Lateline interview with Tony Jones regarding Mark Vaile's trip to France while the Trade Deal with Iraq Wheat is collapsing. Rudd used all his charisma in front of all the cameras saying:
"Mark, put the Latte down for a sec, get out of your lounging about in Paris, get on a plane, get to Baghdad and sort this mess out. It is your responsibility".