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2008-09 Budget - Can Someone Explain To Me .... (1 Viewer)

Lordsion

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Can someone explain to me what exactly this budget will do to the economy?

Like i know that it will be contractionary due to massive budget surpluses and cuts in government spending which will hopefully lower inflation due to less demand and less production of G&S - but what exactly else?
 

boris

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michael1990 said:
The budget concerns every Australian.

Whether they work, have children, own a business or elderly.

It shows what the government will be spending money on.
Infrastructure, Hospitals, Schools.

http://www.budget.gov.au/2008-09/content/at_a_glance/html/at_a_glance.htm

Have a look.
You are such a retard mang. Seriously. This kid would have a better grasp of economics than you.

He isn't asking what a budget is, fool. He's asking WHY THIS BUDGET IS SO SHIT.
 

S.T.P

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opinions about the budget are mixed amongst economists, research a little, e.g SMH. You will find that some think it is contractionary while others think it is in fact stimulatory.
For example, Ross Gittins argues in a recent article that the budget "hasn't eased inflation pressure in any significant way, and certainly hasn't reduced the possibility that further increases in interest rates will prove necessary", while labour claims to it be "a tough, tight budget that reduced the upward pressure on inflation and interest rates."
I think the budget is something that you need to form an opinion on, but that again, that only MY opinion.

The article is here by the way:
http://business.smh.com.au/why-the-treasurers-sums-failed-to-add-up-20080516-2f34.html?page=1
 

izzah1

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Yeah what STP said was totally true, you really need to form your on viewpoint on the budget such as boris's succint response. When you analyse look at its effect on Eco activity, inflation, unemployment, income distribution, environment, CAD etc. Also you can look @ the micro reforms to improve the productive capacity of the economy and have a look @ there short term and long term effects in assisting achieving sustainble growth in the economy.

You have to also remember the budget doesn't just affect economic activity in the economy. The government can often alter resource allocation, income distribution as well as economic activity. Taxation and Spending decision can affect the demand/supply for a particular good and shift resources towards/away from a particular industry/good towards another particular industry. If you look @ the tax on pre-mixed alcoholic drinks you could argue that its destined to reallocate resources away from that industry by lowering demand for the products via the artifical increase in price. There's way more stuff you can talk about so yeah have fun :p btw look @ the changes in Personal income tax to determine whether its made the tax system more progressive or regressive and argue what will happen to income distribution etc.
 

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