This year has marked two things – it is easier to manage when you have a lot of money to play with, and when you have a lot of money to play with you no longer worry about the debt and deficit.
During the whole time the liberal party was in opposition, you could hardly go a day without hearing them mention in the Alps blew the surplus and how the Howard government left “the money in the Bank”, and that now we had record levels of debt.
Changes GST coalition, which is described as ‘the magic pudding’, as they say, waiting for the simulation
Inability to resist fixation on debt and deficit were perhaps one of the biggest drawbacks of Wayne Swan as Treasurer. The problem was not that he had behaved inappropriately during the global financial crisis by organizing a large budget deficit – it was absolutely right in this situation. The problem was the fear to admit it.
And therefore, despite employment, inflation, economic growth, inequality and any number of things, much more important than the budget deficit or surplus, we hear misguided narrative that the budget surplus or deficit is one of the major indicators of economic governance.
So deluded is a story that even those who continue to spout, he did not even bother to join him.
Despite all the talk about the need to cut costs, the reality of the budget surplus is mainly due to the income. When you have rivers of tax revenues to the government Treasury surplus is almost inevitable.
For nine years the Howard government delivered a surplus (including 2007-08) state revenues not lower than 24.5 per cent of GDP. In the last 10 years it has never been above this level.
During these nine years of surpluses, government spending averaged 24% of GDP only once in the last 10 years (2017-18) has an income above this level.
In the United States as a result of massive reductions of taxes of the company income tax company will fall by almost 30%
After nearly a decade of blather about a surplus of public debt can budget finally showed a projected surplus in 2019-20, when government revenues will be pretty hefty 25.3% of GDP.
By this time, the government net debt in the amount of $344bn would more than double 159.6 billion inherited this power.
Consider also that this year, the state costs are projected at 25% of GDP, a level that would not have made a surplus in the last 10 years.
The lesson is much easier to brag about being good in budget management when the company does all the hard work.
And with this revenue, and incidentally comes neglect about the necessity of budget surplus and debt repayment.
We saw it first, with the government’s policy on company tax Cut. Big price cut from big business, projected to occur in years beyond the budget parameters, so there is no need from the government to pretend that they were compensating for falling revenues with expenditure cuts.
And fall of income will do. Over in the US as a result of massive reductions of taxes of the company income tax of the company in the first quarter of this year will fall by almost 30%.
In this case with the recently passed reduction of income tax. It will cost only 8.5 billion. in the year to abolish the 37% tax threshold and raise the top threshold to $200,000. The government was so worried in recent years about the responsible management of the budget, – told us how it will be paid?
Of course not. Rivers of revenue over the next several years budget to hide all sorts of sins – even those still in 10 years to worry about paying for it.
And thus we come to the GTS and offered to fix the government.
When the productivity Commission last year recommended changes to how the GST was prevalent the problem has always been that every state is worse, to improve the proportion that went to Western Australia.
It was a political nightmare – NTU-this is the ultimate thing – a piece of cake differently, and if someone gets more, then someone less.
And what has the government done? They threw money at it
This is the reason why governments struggled trying to come up with a solution, because the possibility of increasing the amount of VAT due to the expansion of tax – such as education – were political poison.
Just throwing more money at it was not feasible, because it is not really correct, but just to spend your way out of the political problems – and given the debt and the deficit was evil any attempt to do that would have been met with loud criticism from the conservative opposition. The extra money spent will mean to either add to the debt or reduce other.
And what has the government done?
They threw money at it.
To ensure that no state is worse for the new changes and provide the UA stands on a floor of 70 cents per person in us dollars GST and then 0075 cents, over the next 10 years, the government will replenish GST grants to States-about $ 9 billion.
Wow. If only someone had thought before just spending money.
To be fair to the government, the political realities being what they are, it was the only way for any change in GST carve up any can be done. Politics is after all the art of the possible, and it is not possible when before the elections in the next 10 months to cut funding for key electoral States of Queensland and South Australia.
And yet, as Scott Morrison to sell? He suggested that “this problem has been kicked down the road for too long and the time has come, now we have got and fixed it.”
Coalition reveals details of radical attempts to fix the formula GST
Fixed by spending more money, not caring or details about how the money will be compensated for the government to cut spending on schools and health care and to force States to give more share of money in these areas? Or will it just add to the debt?
We don’t know and no one in the government is all that bothered to explain.
APN for its part, assuming he would have received VA 75 cents floor before 2024-25 time-line proposed by the government. So Yes, now we have a war.
And all of this will happen until we go to another election with the standard lines about the need for budgeting and live within our means. And we can all nod and pretend that the government really cares about such things.
• Greg Jericho Explorer Australia-the Guardian