The Budget is not the only thing in deficit, its confidence!

[dan c]

I agree. Only idiots use that kind of logic to justify things.

Sure, comparisons against other developed countries are almost pointless because of the poor performance of other countries. But other points in the article comparing debt positions to earlier recessions makes interesting reading.

It's also interesting where the general public think the Australian economy is, compared to where it actually is.

 

[Peter 14.7]

My theory is we got fat and happy in the late 90's early 2000's predominantly because of easy credit. Households were living beyond their means. Credit was squeezed during the GFC, and lending hasn't returned to pre GFC levels, so people feel have to live within their means. It means they can't spend as much, and they feel poorer because of it.

Agree. Your theory is right.

So many years of good times. The key spenders 40 to 20 never experienced the bad days of the 190s recession. Those like me who did are still scarred. Like my parents and parents in law both born in the 1930's . Never through out food, never through our clothes, fear debt....my mum stills says here favourite food is bread and dripping!

Peter

PS For those young uns "dripping" is animal fat, stored by many depression mums in open tins under the sink. Poor the excess fat off from the roast straight into the tin. Humm, YUM!

So when you wanted to add oil to a roast or sausages or chips, you didn't reach for the extra virgin olive but for the tin. Scoop it out like grey butter. On days when family had no food it was bread ( home baked) and dripping, lathered in like butter. Specks of congealed meat were a bonus!

 

[Player]

Pretty much agree. Interest rates are at historic lows, unemployment is below 6%, and has been for a number of years, and we had one quarter of negative growth during the biggest financial crisis since the depression.

Yet the 'surplus good / deficit bad' people will tell you the economy is stuffed. The numbers (growth, net debt, unemployment, IR) suggest otherwise.

My theory is we got fat and happy in the late 90's early 2000's predominantly because of easy credit. Households were living beyond their means. Credit was squeezed during the GFC, and lending hasn't returned to pre GFC levels, so people feel have to live within their means. It means they can't spend as much, and they feel poorer because of it.

Good post Dan. I agree. Simply the ebb and flow of the tide and cycles. Right now it's time to pay the ferryman for the ride. The dieting is hurting some people as they are viewing the loss of consumption from the same (fat) eyes of the hog decade.

 

[HotRod]

Good to know the budget will be in surplus by 2016/17......

Smoke and Mirrors

 

[Peter 14.7]

Good to know the budget will be in surplus by 2016/17......

Smoke and Mirrors

And there will be "No Carbon Tax under My Government" either

Sadly, the average jo does not know what a surplus budget is (having never seen one for 7 years) so the election will come down to carrots like GONSKI School (un)Funded Promises and Asylum Boat People Lotto.

It not the economy that matters!

Peter 14.7

 

[Peter 14.7]

And when you read the article our famed ALP Gov solution is:

Steal people savings in super and cash from their accounts if they have the temerity to not access them for more than a few years.

Tax smokers more, like we all hate them right?

A tax when you deposit money in account because saving for your future is down right irresponsible of you..

So we have the ridiculous ala YES MINISTER situation where you must make a deposit which you will be taxed lest you be inactive and we take the lot!

Unbelievable, Peter 14.7

 

[HotRod]

How can anyone take this government seriously.

They came out in December with the MYFEO (all whatever it was called), then the budget where the December estimates were way out, and now in August, just three months after the budget with the budget estimates way out.

They are just making this rubbish up as they go along.

I wonder what thought bubble they'll have next week????

At least they're clearing the decks for that Sept 7 election.

 

[Aaron_C]

What a joke indeed.

 

[Crabnet]

How can anyone take this government seriously.

They came out in December with the MYFEO (all whatever it was called), then the budget where the December estimates were way out, and now in August, just three months after the budget with the budget estimates way out.

They are just making this rubbish up as they go along.

The government get their figures from treasury who line up with the RBA figures.
A budget estimate has a margin of error of plus or minus 10 to 15 billion dollars.
What they are getting wrong is the estimation of tax raised.
So do you know are tax receipts below estimates? Why do they always over or underestimate? Why isn't their crystal ball working properly so that they can't foretell the future? Is it an imperfect world that we live in or something?
Work out the error rate as a percentage of GDP. What is it, half a percent?

 

[Peter 14.7]

The government get their figures from treasury who line up with the RBA figures.
A budget estimate has a margin of error of plus or minus 10 to 15 billion dollars.
What they are getting wrong is the estimation of tax raised.
So do you know are tax receipts below estimates? Why do they always over or underestimate? Why isn't their crystal ball working properly so that they can't foretell the future? Is it an imperfect world that we live in or something?
Work out the error rate as a percentage of GDP. What is it, half a percent?

Disagree. This Government takes the extremes of Treasury predictions and adopts then to suit itself. Max Growth , Minimise Risk.

Whose fault is the

NO Carbon Tax, opps, Carbon Tax,
And set it high because thats Good, opps too high rest of the world very very low, industry suffers, Chinese laughing and buy all our coal cheap
Dont Worry You all to be Compensated. So why bother?
Opps killing economy. Ahh lets set to Euro Pricing.
opps massive hole in Budget, ahh so now:

Everyone Keeps Compensation,
Traditional Business Crippled, if not Dead
New Green Business based on old rate Stuffed,
Now a Tax on Deposits to pay for the whole F#%K UP.

and.... China Still Laughing!!!!

Not Treasurys Fault, Not GFC Fault, Its the ALP FAULT, regards Peter 14.7

 

[Dazz]

Another $ 33 Billion out in just 11 weeks since the Budget was handed down in May.

That's OK - it's only $ 3,000,000,000.00 per week, every week, error.

----------

Fear not, Kev's out taking selfies with the people in schools and shopping malls. Everything is being managed well.

----------

This is a federal election to decide who is competent to actually run the country's finances, such that all other social aspects flowing from that can be funded appropriately. This is not some X-factor popularity contest.

The country needs a workhorse for a PM, not a show pony.

 

[topcropper]

Tax smokers more, like we all hate them right?

Poor old smokers, they cop a hiding.

They are often a lower socio class to start with. Pay heaps of tax their whole life for their filthy habit they can't get rid of. Then drop dead at 65 and so are no burden on the old age system.


See ya's.

 

[BayView]

Poor old smokers, they cop a hiding.

They are often a lower socio class to start with. Pay heaps of tax their whole life for their filthy habit they can't get rid of. Then drop dead at 65 and so are no burden on the old age system.


See ya's.

Not entirely true.

Generally, as a race; Asians and Chinese are prolific smokers, and many of them are in Aus in professional jobs.

Amazes me how people who study so hard, are so successful academically and professionally...do something so stupid.

Add all smoking teenagers to that list...it's not like the info on how bad it is for you is hidden away any more by the cigarette industry.

I reckon all forms of self-destruction and community cost from said items of self-destruction should be taxed to billy-o.

Helps pay the health bills from these people....speeders, drink drivers, smokers, drinkers (I have a drink), obese folk (but not the ones who have bad genes ), and so on.

Bigger fines, bigger taxes - better for the Hospitals which are struggling to cope with the workload from these folks, and lack of funding.

 

[Mooze]

Poor old smokers, they cop a hiding.

They are often a lower socio class to start with. Pay heaps of tax their whole life for their filthy habit they can't get rid of. Then drop dead at 65 and so are no burden on the old age system.


See ya's.

And what of those of us who can't avoid their second hand smoke when walking down the street? Taxed via health issues and reduced earnings. No matter what most of the smoking idiots around just don't give a damn about others - as demonstrated by the idiot yesterday who despite the very obviously pregnant lady continually trying to move further away idiot kept moving closer until told to p off or I'd call the police after a polite request didn't work (was outside entry to a public building within 4 metres of pedestrian access). Triple the tax on cigarettes.

 

[weg]

Not entirely true.

Mostly true according to the statistics.

Smokers pay a LOT of tax over a life time too and I reckon have paid for their own costs a couple times over and more.

If anything I reckon we need to tax the healthy who live longer and access pensions for 10+ years longer and who are responsible for creating blowouts in aged care costs, not to mention medicines and hospitalizations associated with ageing... if that's the concern.

Everyone dies of SOMETHING one day but only one lot are paying extra tax.

Saw a funny cartoon of Rudd the other day, lighting cigarettes for school children and telling them to tell their parents to go out and buy one or two packs of them a day .

 

[Crabnet]

Another $ 33 Billion out in just 11 weeks since the Budget was handed down in May.

That's OK - it's only $ 3,000,000,000.00 per week, every week, error.

The downgrades relate to the forward estimates which cover a four year period.
Highlights taken from Bill Evans of Westpac analysis.
http://www.businessspectator.com.au/article/2013/8/2/australian-news/weekend-economist-all-about-savings#ixzz2arNldMLQ


Nominal GDP growth has been downgraded in 2012-13 (lowered by 0.75 per cent), 2013-14 (by 1.25 per cent) and 2014-15 (by 0.5 per cent),

Revenue collections forecasts reduced around $8 billion a year.

The budget deficit is forecast to be $30.1 billion in 2013-14, a $12 billion deterioration from the May budget forecast.

Main areas of lower tax receipt forecasts:

* individuals' income tax, down $18.1 billion over the four years
* company tax, down $9.7 billion
* capital gains tax, down $1.5 billion
* MRRT $560 million lower across the four years.

In the 2016-17 year, six key revenue measures raise $4.2 billion and four key expense measures save $2.4 billion

Receipts highlights (& 2016-17 impact), are:

1) Tobacco, increased excise, $2,410 million

2) Fringe benefit tax on cars, amendments, $960 million

3) Bank deposit insurance scheme, $325 million

4) Lost superannuation, $165 million

5) Offshore worker visa charges, $145 million

6) Unannounced decisions, $158 million

Payments highlights (and 2016-17 impact) are:

1) Public service cuts, $1042 million

2) Infrastructure spending bring forward, $252 million

3) Carbon price, reforms to Energy Security fund, $781 million

4) Unannounced decisions, $363 million


Employment

The unemployment rate is forecast to rise to 6.25 per cent in June 2014 (revised up from 5.75 per cent). This is largely explained by a rise in the participation rate rather than a marked slowing in employment growth. However it is notable that the government expects the rate to stay there in 2014-15 with 6.25 per cent forecast for June 2015 as well. That signals that the government, at least, sees no need for rates to be rising in 2014 – in accordance with our own view.

Our general take on the real sector forecasts is that the downward revisions have been minimal – we expect that the Reserve Bank will be more pessimistic on the growth outlook when it releases its forecasts on August 9. In summary, we see nothing in this Statement to change our current forecast interest rate profile of three more cuts in August; November; and February next year to be followed by a long period of steady low rates.

 

[HotRod]

Fair enough, but it's all wrong.

They'll come out in another 3-6 months and revise the numbers again.

What this is turning out to be is the delayed effects of the GFC.

It's finally washing through the Australian economy.

Except Labor are still trying to ease us through.

I think there needs to be a good 12 months of pain (rip he plaster off this festering sore in one go) than trying to manage it over 3 years and let it keep on festering.

 

[cimbom]

Thanks to Kevin Rudd for ruining my birthday by calling an election on the same day. Will be a nice b'day present to find out that I will be putting up with the Labor or Liberal party for another few years.

Also, double thanks for calling it this weekend so all the work I put into our launch event for this Monday will end up getting no media because they'll all be chasing Rudd around.

He was also generous enough to cut the PS budget significantly this week so that we'll have more people unemployed to pay for his useless anti-refugee advertisements and the like. Yay for Australia

 

[TheMarket]

Dont worry ....people will keep taking out bigger debt and flipping houses so house price will keep going up and filled the budget hole

what we have here is transition people
just like soft landing
stronger for longer

 

[Ideo]

Mostly true according to the statistics.

Smokers pay a LOT of tax over a life time too and I reckon have paid for their own costs a couple times over and more.

If anything I reckon we need to tax the healthy who live longer and access pensions for 10+ years longer and who are responsible for creating blowouts in aged care costs, not to mention medicines and hospitalizations associated with ageing... if that's the concern.

Everyone dies of SOMETHING one day but only one lot are paying extra tax.

Saw a funny cartoon of Rudd the other day, lighting cigarettes for school children and telling them to tell their parents to go out and buy one or two packs of them a day .

Yep. Already they are paying well above their cost.

I always laugh at the whole second smoke issue because it is farcical by and large. I don't like getting a huge amount of smoke in my face on the street, but I also don't like getting a huge amount of diesel smoke in my face. But it happens.

I'm a huge fan of banning smoking indoors in publlic areas. But outside? Who gives one? Live and let live. Health issues from second hand smoke and not going to occur because you once caught of whiff of someones lit ciggie.