The good news is that the budget is going into surplus. Small yay! for prudent financial management and responsible government.
Big “what the?” for the usual smokes and mirrors that seem to appear any time a Treasurer releases a budget update.
So far this morning, i’ve received many, many, many pages of insight, research, analysis and repitition of the 2012 Budget, and will post some of the better ones to the base of this note in the next day or so.
Another Budget Fail…
However, my personal interest is to see whether the hype and rhetoric is reflected in the actual dollars on the table, and it’s no surprise that it is not. The headlines shout about Australia achieving a budget surplus. What they do not shout about, is the guaranteed increase in instability for Australia’s longer term finances that will be caused by this budget. Doubt me? How about going to the actual government Budget website, and looking through the actual black and white print… Here’s the bit that i am interested in…
While it’s great to see expense estimates being reduced for the year, has anyone noticed that the ACTUAL EXPENSES are not being reduced at all? The figures above are “real”. That is, after accounting for inflation. Inflation is running at more than 1.8% for the 2012-2013 year, so my interpretation is that the government has not cut spending by even one single dollar. In fact, the figures shown suggest that costs are going to increase at a rate far greater than the inflation rate for as far as we can see. Here is a link to the Budget Statement 6. http://www.budget.gov.au/2012-13/content/bp1/download/bp1_bst6.pdf
The Great Wobbly Figures Game
A self-employed person will look at this cookbook of fudge, and immediately recognise the Big Fail that is embedded in amongst the fineprint… There can only be a surplus ongoing IF the government’s income continues to grow at a rate greater than the expenses, and the expenses are predicted to grow pretty impressively. Any hit to the economic predictions for Australia’s GDP growth and these expenses will rapidly send the budget into deficit. Just look at the United States, which was in surplus not so long ago.
In other words, the Budget headlines are a bit of a charade, in which the government rearranges spending so that it appears Australia’s future finances are structurally more sound than they actually are.
How does the 2012 Budget impact you?
For all those who would like a quick update of the Budget impact on their finances, this News website has one of the most effective listings that i’ve seen. It includes a calculator to look at your likely dollar win/lose,
and quick paragraphs for key impacts, so you can identify what outcomes are most likely to hit your personal bottom line. Sometimes links can get messed up, so here’s the direct link to that news site http://www.news.com.au/money/federal-budget/federal-budget-2012-what-it-means-for-you/story-fn84fgcm-1226350235644
You will most likely be inundated with “Budget Updates” through the newspapers, tv, internet and the local shop owner, so i’ll see if i can track down a few of the better updates and post the links here for you… As a starter, here’s the MLC update, which includes a video overview, and a link to a more technical review.
Check back and you’ll find a few added over the next day or so.