Scouring the Budget for Enlightenment

Fri, 26 May 2017  |  

This article first appeared on The Adelaide Review website at this link: 


Scouring the Budget for Enlightenment

Every Federal Budget contains many thousands of numbers, graphs and words about the economy, the finances of the government and the impact of the decisions taken during the budget process.

It is impossible to digest every aspect of this myriad of information but it is fun, and somewhat enlightening, to scour through the budget papers for interesting facts and issues that the budget throws up after it has been delivered.

Some of those issues that captured my attention, as I sat by the fire the weekend after budget day, are outlined below. They help to illustrate how detailed and complex the budget process is and how much work is undertaken to get the budget finished, signed off and delivered on time each year.

Here are some Budget snippets:

Iron Ore
Each US$1 a tonne move in the iron ore price in 2018-19, away from the US$55 a tonne assumed in the budget, impacts government tax receipts by $420 million per annum. If, for example, the iron ore price were to jump US$20 / tonne, to the level it was two months ago, the budget bottom line would improve by $8.4 billion each year.

Foreign Investment
Foreigners hold just 55 per cent of the bonds issued by the government. This is the lowest level since the dip in 2009 at the time of the GFC. Are foreign investors worried about a downgrading of the triple-A rating and selling their bonds ahead of time?

Medicare Levy
In 2020–21, the Medicare levy will raise $23 billion for the government: while $9.4 billion will be allocated to covering the costs associated with disability care, overall health care costs will have risen to $83 billion. Should we prepare for a further hike in the Medicare levy in the years ahead to cover the rising costs of health care?

In 2020-21, the government will collect $15.2 billion from tobacco excise – this is 2.9 per cent of total revenue and is more than 20 times the amount collected from the luxury car tax, more than double the amount of petrol excise and is around $3 billion more than collected from superannuation fund taxes. Of course if smoking rates dropped to zero, the government wouldn’t collect any revenue, which means there is a threat to the budget if smoking rates fall faster than assumed in the budget numbering.

Treasury is forecasting the rate of inflation to remain below the mid-point of the Reserve Bank of Australia (RBA) two to three per cent target all the way through to June 2019. This is in line with the inflation forecasts from the RBA but it begs the question why policy settings aren’t more stimulatory to get economic growth, and inflation, higher sooner.

At no stage, out to 2020–21, is the unemployment rate assumed to drop below five per cent. This is a very high unemployment rate on most comparisons to similar industrialised countries where unemployment in the four to five per cent range is common. Some would argue that Australia’s high unemployment rate is a policy failure.

Household Debt and Spending
Household spending growth is forecast to be supported by a sharp fall in household savings. The saving ratio is forecast to drop to around 3.5 per cent of income, a level not seen since 2007. With household debt high and wages growth low, it seems the only way consumers can ramp up their spending is to dig in to their savings. This, clearly, is not sustainable.

Snouts in the Trough?
The abolition of the Life Gold Pass for all former parliamentarians will save the budget $0.0005 billion per annum. It is the sort of policy that get cheers from the mugs who reckon politicians always have their snouts in the trough, but clearly, the Gold Pass was less than small change in terms of its hit to the budget bottom line.

Budget Deficit
In 2017–18, the government will collect $1.187 billion a day, on average, in tax and other revenue: it will spend $1.259 billion a day, on average. There is a deficit of $72 million a day. This simply demonstrates that the economy, and the government sector, is big.

There are many more facts in the budget that are enlightening, So the next rainy day, when there is nothing much on TV, go to and look through the flood of information that makes up the annual budget.

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Wed, 29 Jul 2020



Covid19 has opened a door for Australians to positively accept significant changes that will lead to a shared good. This rare opportunity enables us to achieve sustainable economic and social goals that create a new ‘normal’ as our way of life.

These Ten Steps are presented as non-partisan recommendations to the Australian Parliament in the firm belief that, if they embrace them, the Australian economy and society will be greatly enhanced after the Covid19 pandemic has passed.

*A job for you if you want one.
A significant increase in part time and casual employment can be created that will enable you to enjoy a more creative and peaceful lifestyle and to live longer and better. The traditional age at which you would have been expected to retire will become obsolete as a result. An access age for pension and superannuation will become your choice. This will enable you to remain in paid work for as long as you want to, on a basis that you choose, while boosting the productivity and growth of Australia.

*You will get wage increases that will be greater than your cost of living.
A demand for enhanced innovative skills at all levels of employment will be created as the economy grows in strength, thereby enhancing your stature in the workforce and enabling executive salaries and bonuses to drop to levels that are accepted as justifiable by employees, shareholders and customers.

The misplaced objective of the government of delivering a surplus, come hell or high water, has gone up in smoke

Tue, 07 Jan 2020

This article first appeared on the Yahoo Finance web site at this link:   


The misplaced objective of the government of delivering a surplus, come hell or high water, has gone up in smoke

For many people, the cost of the fires is immeasurable. 

Or irrelevant. 

They have lost loved ones, precious possessions, businesses and dreams and for these people, what lies ahead is bleak.

Life has changed forever.

As the fires continue to ravage through huge tracts of land, destroying yet more houses, more property, incinerating livestock herds, hundreds of millions of wildlife, birds and burning millions of hectares of forests, it is important to think about the plans for what lies ahead.

The rebuilding task will be huge.

Several thousands of houses, commercial buildings and infrastructure will require billions of dollars and thousands of workers to rebuild. Then there are the furniture and fittings for these buildings – carpets, fridges, washing machines, clothes, lounges, dining tables, TVs and the like will be purchased to restock.

Then there are the thousands of cars and other machinery and equipment that will need to be replaced.