2009/2010 Budget

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hairy man 5/12/2009 7:47:03 PM

People on this forum should be concentrating on how the Budget affects our Defence. From what I havce seen, not much. Although there is provision for new artillery items, which surprises me after many years of prevaricating over these items by both the Howard and Rudd governments that something is going to be decided now. I took it for granted the financial situation would be used as an excuse not to make any purchases at this time.

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StevoJH 5/13/2009 2:26:14 AM

It might not effect it this year but in several years time it will, its hard to cut budgets once they've been increased, and with the amount of defecit that is being run up a major issue in a few years time will be the portion of the government's budget that will have to be spent on debt interest and repayments. Hopefully we wont end up in the situation that the UK government has at the moment with almost $100 billion AUD per year spent on paying interest on government debt

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Volkodav 5/13/2009 8:13:19 AM

4.5% of GDP is stuff all for a deficit.

I would rather a temporary deficit and investment in infrastructure than the alternative of cutting things to the bone and entrenching the structural problems that limited our economic potential and drove our inflationary problems during the recent boom. By investing in infrastructure, training and education we will be even better set up to take advantage of the growth that will follow the current financial crisis.

From the mid nineties onwards I watched the number of apprentices starting each year reducing with many companies stopping training all together, the same occurring in all industries and professions. It was these cut backs that caused the skills shortage and subsequent wages blowout that restricted our economic growth and led to high inflation. The ADF, being one of the few organisations still training significant numbers of people became a prime target for head hunters, hence the retention issues that have plagued them in recent years.

A deficit for the next few years is nothing compared to the issues that we could face if we fail to fix the structural issues with our economy now.

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Aussiegunneragain Volkodav 5/15/2009 3:13:25 AM

I wish people would inform themselves before regurgitating this rubbish about a "temporary deficit" that Rudd and Swan are spruiking. That rhetoric and their economic policy is all about fooling the Australian people to save their own miserable arses at the next (probably early) election.

By their own predictions the "temporary deficit" will last for 6 years and that is only by having the Treasury assume a very rapid world recovery from the recession, far faster than others such as the RBA and the IMF predict. The amount of debt that we (or should I say future generations, like your daughters) are incurring will put very significant upwards pressure on interest rates making it harder for businesses to create jobs and slowing the recovery. If you think you were hard done by with inflation during the boom try dealing with the higher unemployment that this country is going to suffer over the next decade or more, thanks to Rudd and his gaggle of gits. Having faster internet access to entertain your teenage daughters might be important after all, because the odds have increased they are going to be stuck in your home on the dole when jobs dry up and when this country has gone broke and has had to cut university funding and places, like they did in the 90's recession.

By investing in infrastructure, training and education we will be even better set up to take advantage of the growth that will follow the current financial crisis.

Nice theory if they were investing all the money in those things. However, they have pissed away about 24 billion in cash handouts (some of which has gone overseas to foriegn workers who worked here last year and have gone home) and a lot of this is also going to pension payments and paid maternity leave. In any case, governments are outstanding at stuffing up infrastructure projects or putting them in the wrong place to pork barrel marginal electorates so we can be sure that a lot of this money will be wasted and won't add to the productive capacity of the economy.

My prediction is that even after recovering from the recession, under this government the Australian economy will decline to the state that NSW is in now, broke and with entrenched unemployment of between 6 and 7 percent (closer to 30% for young people) and with considerably higher taxes. Rudd duped many people (including me, I'm now embarressed to admit) with his pre-election "I'm an economic conservative" mantra. He even has me missing Paul Keating which is really something else because I hate that prick. People need to wake up to that fact quickly, admit they were fooled and elect a government that will do what needs to be done sooner rather than later.

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Volkodav 5/15/2009 7:20:03 AM

The only way to prevent a deficit is to cut defence, cut health, cut education and cut infrastructure spending.

So lets say we cut the AWD's, LHD's and new Helo's, disband 7 RAR and what is inplace for reforming 8/9 RAR,as well as retiring 24 legacy bugs as the SH's come on line.

Axe the 30% health care rebate and the child care rebate for everyone. Disband the Pharmacutical Benifits Scheme.

Cancel all road rail and port projects....

What else or is that enough?

This would cost me my job and probably see my wife out of work too. In fact most of the people I know would be in serious danger of losing their jobs then their homes etc etc if the government took this line.

You obviously has an issue with our current government and I get the distinct impression if they cut everything back to deliver a balanced budget you would be saying they should have borrowed to stimulate the economy. Take your blinkers off and absorb the fact that we are in a GLOBAL financial crisis and would be in one irrespective of who our PM was. Things would be no different under Howard, Costello, Beasley, or Mal Maninga!

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StevoJH 5/15/2009 11:51:44 AM

Have a look at this.

Government spending by Area for the last 3 years ($ millions).

2007-08/2008-09/2009-10

Community Services and Culture - 5,990/6,105/12,188

Health - 42,964/46,032/51,223

General Government Services - 32,232/79,270/80,478

Industry and Workforce - 10,445/11,662/13,271

Education - 17,752/18,764/35,222

Defense - 19,880/17,896/20,952

Infrastructure, Transport, & Energy - 9,887/10,301/13,886

Social Security & Welfare - 96,450/102,439/110,994

Total Spending (billions) - 236/292.5/338.2

I find the increase in "general government spending interesting" (what comes under that title?)and i'm not sure how you can "instantly" double the education budget without creating a massive amount of wastage. Not exactly sure what falls under "community services and culture" but like education the budget is doubling next financial year.

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Volkodav 5/16/2009 9:09:43 AM

I don't claim to know the full scope of the spending increases but I do know one area of education that I am currently taking advantage of, that is the conversion of the program I am participating in to flexible / external delivery, if this had not happened I would not be able to continue. I belive that a considerable number of programs are being rejigged to make it easier for working people who can not get the time off work to attend campus to undertake relevant tertiary studies to further their careers. This is a one off cost that will give technical people the same access to professional development as the business / management / social work fields etc etc have had for years.

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Aussiegunneragain 5/17/2009 12:48:18 AM

The only way to prevent a deficit is to cut defence, cut health, cut education and cut infrastructure spending.

So lets say we cut the AWD's, LHD's and new Helo's, disband 7 RAR and what is inplace for reforming 8/9 RAR,as well as retiring 24 legacy bugs as the SH's come on line.

Axe the 30% health care rebate and the child care rebate for everyone. Disband the Pharmacutical Benifits Scheme.

Cancel all road rail and port projects....

What else or is that enough?

I know that the GFC means that we would go into deficit irrespective of who was in power. What matters is the size of the deficit and whether what the money is spent on is going to add to the productive capacity of the economy. Basically we want to do what we can to prevent people losing their jobs now and to give us the best chance of getting out of the recession quickly. Cash handouts are not the way to do the latter and were a monumental waste of money. The pension increases were an unaffordable policy at this time as well and should have been delayed until the recession has run its course. Infrastructure spending is all very well if it is done competently but I have no faith that this will be done well by this mob and in any case they are a minor part of this budget, the rest being politically driven handouts. John Howard recently said that he would have paid the States to remove payroll tax for a year or two to allow employers to keep people on and he would have invested in infrastructure and I think this is a far better course of action than the one that has been taken.

And yes, I am a Liberal supporter but I can honestly say that I have maintained an open mind about Kevin Rudd's Labor government. I principally did this because I percieved Rudd to be moderate and competent, and preferred him if we had to have a Labor leader. I also thought that it wouldn't hurt to have a younger PM and since the Libs failed to make leadership succession plans I figured a couple of terms with this guy would be acceptable. You can look back over my posting history before and after the election if you want to confirm that.

However, after 18 months of giving him a go I have realised that he is a complete fraud and I am genuinenly disappointed and fearful for this country's future under him. So its not me with the blinkers on. If anything that award goes to you, though your blinkers have more to do with the appallingly short sighted, selfish middle class afluenza that infects this country at the moment. Thats why I won't feel that sorry for some people when this Government's mismangement costs them dearly, it will be a long overdue lesson. I will just feel sorry for the young people who will suffer because of their parents stupidity.

I'll remind you of that in a couple of years when it is abundantly apparent even to you that I was right.

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Volkodav 5/17/2009 7:21:49 AM

So its not me with the blinkers on. If anything that award goes to you, though your blinkers have more to do with the appallingly short sighted, selfish middle class afluenza that infects this country at the moment. Thats why I won't feel that sorry for some people when this Government's mismangement costs them dearly, it will be a long overdue lesson.

Interesting statement but am curious about this middle class afluenza you refer to.

What do you consider to be middle class? I know there has been a Labor catch cry about Howards middle class welfare etc and a conscious move to reduce it through means testing that doesn't seem to have gone very far and is being fought tooth and nail by the opposition. Who are the middle class?

I do know I have spent my entire working life paying tax and that the only handouts / bonus's we have benifited from are the Baby Bonus, the quarterly child care rebate and the latest stimulus package. The child care rebate was a suprise as we didn't know we were eligable. This is all much appriciated but if means testing reduces or cuts out this entirely well thats fair too because if there is only so much money to go around then it should go to those who need it the most. My objection has never been my family not getting benefits and handouts but rather the fact that our taxes have over the last decade been used to subsidise wealthy families who don't need the extra money and other individuals who are rorting the system.

What I do know is one of the reasons Rudd was elected was the general feeling in the community that the good times were over and voters don't trust the Liberals to protect them when times are tough. Inside Canberra predicted prior to the election that this would be a good one to lose as the global economy was in trouble and who ever was in power would end up wearing the blame.

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Aussiegunneragain 5/18/2009 8:20:38 AM

Interesting statement but am curious about this middle class afluenza you refer to.

The ALP's idea of the middle class is anybody richer than the actual middle class people (oops, "working families") who might vote for them. It is really just a "soak the rich" mantra is just an appeal to the envy of the masses and will do more harm than good if it continues beyond the current token means testing efforts (as I expect it to when they have to raise taxes in a couple of years time, driving away rich investors).

I consider people the middle class in Australia to be anybody who can reasonably provide for themselves and their family without government assistance, if they used their brains, exercise self discipline and didn't have to pay the taxes to fund the service in question (in dollar terms I'd make a guestimate that they are probably earning at the minumum somewhat below the average salary, which is about $60kpa at the moment). I consider middle class welfare to be any Government transfer to these people. So your baby bonus, childcare rebate and the stimulus package aren't the only MCW that you have gotten by my definition (though they are some of the worst), unless you have never made a medicare claim or recieved the private health insurance rebate, none of your family have ever benefited from public or publicly funded education and you have never recieved a government tax incentive for your superannuation (to mention a few examples).

The stupid thing about MCW is that all we are doing is letting the Government taking our money off us and giving it back to spend on what we could have spent it on ourselves anyway. This is incredibly expensive in administration costs and the taxes that have to be raised destroy the incentives for businesses and individuals to generate economic growth and jobs. It is the function of the bribe culture dominating Australian politics which appeals to middle class greed and affluenza. I know that both parties partake in it and that Howard got worse during the mining boom, but at least he took the opportunity to get rid of the deficit and lower taxes early in his term of Government, when he had the political capital to burn. That is what has put us in a much better position than we otherwise would have been in.

Contrast that to Kevin Rudd who came in on a platform saying that he was going to cut spending to fight inflation and talked about a "tough" budget this year, but let Swan delivered a piss weak budget in 2008 and this year as well. For a PM with such a massive lead in the polls it can only be considered to be a cowardly and irresponsible performance at best, and a massive pre-election deception about his "economic conservatisim" at worst. Still, people choose to be decieved and as I said, perhaps a big bite on the arse will teach a much needed lesson to the middle-class whingers (oh sorry, working families). I just hope they accept their mistake quickly.

BTW, I disagree with your assessment about why people voted for Rudd over Howard. This Newspoll from right before the election shows that the voters considered Howard better to manage the economy right to the end. The fact that they voted in Rudd shows me that in 2007 the economic crisis hadn't registered in the minds of voters and they changed their votes based on other issues.

www.newspoll.com.au/image_uploads/1122%20Final%2027-11-07.pdf

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Volkodav 5/19/2009 6:30:06 AM

Now this I agree with although you left out the bit about the handouts artificially increasing demand and inflating prices. This is a double whammy for families that pay their own way, in particular many dual income families whose combined income makes them ineligible for MCW while single income families on higher incomes (until last year) remained eligible for payments and support such as the Family Benefit Part B. This led to the ludicrous situation where a working couple with children had to pay higher costs for necessary services which had gone up to absorb the very same government subsidies they weren't eligible for while their taxes were paying for the subsidies received by other families, some of them significantly better off than they.

This is not envy this is anger, why should a working couple on a combined income of less than $120000 p/a who have worked and saved to pay their own way have to subsidise single income families on $149999.99 p/a? This is the situation we were in last year while my wife was on unpayed maternity leave and then worked part time before returning to full time this year. It was even worse before the means test came in 1July last year.

While Labors changes last year saw some money head our way this year and also cut benefits to many high income earners who had previously been subsidised, I would have personally been happier to see MCW cut altogether to eliminate the waste you outlined above. It will take time but I hope the pendulum is starting to swing back towards sanity in that welfare is only used to support those who truly need it.

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StevoJH 5/19/2009 7:04:51 AM

To the person that stated that we would be going into deficit no matter what was spent i'd like to point to the revenues predicted in the budget for the last three budgets, and compare them to the total spending.

07/08, 08/09, 09/10 (billion)

Revenue: 247, 319.5, 291

Expenses: 236, 292.5, 338.2

And i still want to know what "general government services" are, since they sucked up most of the increase between 07/08 and now so far.

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Aussiegunneragain 5/19/2009 7:10:04 AM

Now this I agree with although you left out the bit about the handouts artificially increasing demand and inflating prices.

You won't hear me disagreeing on that though the changes in demand can also take the form of temporary but damaging distortions rather than permenant changes. All those idiots who think they are getting free money in the form of the First Home Owners grant are about to find this out the hard way when the value of their overpriced plummets below what they borrowed in 6 or 12 months time, due to the recession and the removal of the grant. Many of them who are out of a job or who get their loans called in will go bankrupt. Its a tough lesson but the precedents are out there and people still make the same poor decisions, so whaddya do?

This is a double whammy for families that pay their own way, in particular many dual income families whose combined income makes them ineligible for MCW while single income families on higher incomes (until last year) remained eligible for payments and support such as the Family Benefit Part B. This led to the ludicrous situation where a working couple with children had to pay higher costs for necessary services which had gone up to absorb the very same government subsidies they weren't eligible for while their taxes were paying for the subsidies received by other families, some of them significantly better off than they.

You are forgetting that a single income family on $149999.99 p/a is paying a considerably higher tax burden both in reletive and absolute terms than you are in the first place. I personally think it is a travesty that somebody who is smart and hard working enough to earn that sort of money should pay a 25% higher marginal income tax rate than a couple who between them earn the same amount. The fact that people in Australia think that this is ok just goes to show that envy IS the root of this problem and they need to get over it. People with that sort of talent and commitment deserve to keep their money and the favourable family tax benefits really just redress this.

Then we end up agreeing furiously on the utopian outcome, if for different reasons. However with this mob in I don't think that this is going to even start to happen. Welfare spending will just grow at the lower to middle part of the range and taxes will grow at the middle to higher end. The folk at the bottom end will have less incentive to work hard because they would lose their benefits and the folk at the top will have less incentive to work hard and invest, because they would just get their money taken off them anyway. Recession aside both the rich and the poor be poorer than they otherwise would have been. At least under Coaliton policy everybody got richer in absolute terms ... the rich just got richer quicker. I personally don't really care if somebody else is better off than me so long as am better off myself and I have no time for a Government that is going to stifle all of our chances because it capitalises on envy politics, and I have no time for a large proportion of the public that provide that sort of Government with the support that it needs to do this.

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Volkodav 5/19/2009 8:18:17 AM

I personally don't really care if somebody else is better off than me so long as am better off myself and I have no time for a Government that is going to stifle all of our chances because it capitalises on envy politics, and I have no time for a large proportion of the public that provide that sort of Government with the support that it needs to do this.

Another point of agreement. I have no issue with people being successful as the fact that others can make it is often the inspiration for people to give it a shot themselves. I have a major issue with people being carried, especially at the expense of others and little annoys me more than the constant disinsentive to put in and better yourself.

I do believe the community in general is moving towards this view which will remove the incentive for the government to bribe the electorate. With the GFC people are more concerned with keeping their jobs than getting feel good money from the government.

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Aussiegunneragain Volkodav 5/19/2009 9:16:30 AM

I hope you are right. I've become a bit jaded at what I've seen of Australian community attitudes over the last 20 years. The article below gives me some hope that people do "get it" about the fact that we can't afford to keep doing what we are doing with vote buying and MCW, and that we need take a longer term view. I just wish people would develop a better understanding about the fact that the private sector does most things better than the Government and that we should be looking to reduce rather than increase Government involvement in the economy, as we currently are doing.

Voters want infrastructure spending over more handouts: Newspoll

Most voters do not want the government to hand out any more cash payments, instead pushing for more spending on infrastructure.

The latest Newspoll has recorded a 5 per cent dip in Labor's primary vote, with many Australians questioning the handling of the economic downturn.

Newspoll Chief Executive Martain O'Shannasey says almost half of voters also want the government to axe tax cuts in next week's budget.

"Seventeen per cent of people would prefer to see cash payments to individuals while 78 per cent would rather see the money spent on infrastrucutre.

"On the question of should we go ahead on the income tax cuts, people are pretty evenly divided."

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