The Daily Wire: Swan abandons commitment to a surplus in 2012-13 - The Daily Wire

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Swan abandons commitment to a surplus in 2012-13

#81 User is offline   icey 

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Posted 23 June 2013 - 08:44 PM

Bam said:

Which Australian Treasurer is the first one to state that a budget surplus was a desirable goal?

View PostBam, on 23 June 2013 - 06:27 PM, said:

It was actually Hayden in 1975.

The Whitlam Government ran a greater proportion of budget surpluses to total budgets than any other Federal government.


So they ARE in fact desirable? Or of course otherwise, what would be your point?
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#82 User is offline   Bam 

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Posted 24 June 2013 - 04:09 PM

View Posticey, on 23 June 2013 - 08:44 PM, said:

So they ARE in fact desirable? Or of course otherwise, what would be your point?

Surpluses are desirable but not at the expense of cutting government services or raising taxes too high.

If budget surpluses were the primary goal, why not just increase taxes or cut services? Because increasing taxes and cutting services are both unpopular measures.

The real bone headed policy though was Costello using the proceeds of a temporary mining boom to make permanent cuts to taxes. This was simply a stupid idea. It doesn't take a genius to understand that temporary windfalls should never be used to fund permanent commitments.

A far better idea would have been to place this money in the Future Fund. Later on, if the money is needed due to a weak economy, this money in the Future Fund could be used to fund infrastructure projects (eg: roads, rail, telecommunications) that create jobs during construction and lead to better efficiency later.

Unfortunately, the Howard Government were too concerned with vote-buying to stay in power and not concerned enough with the long-term ramifications of their wanton vote buying.
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#83 User is offline   Bam 

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Posted 24 June 2013 - 04:19 PM

I'll expand further on the point - IMO, the budget should be in balance over the course of the economic cycle. Surpluses in good years, deficits in bad; with the budget being balanced overall.

The key point though is that a surplus is not always possible. In a recession, more people are out of work, therefore fewer people are paying taxes. A surplus in that environment is much harder to achieve; in those times a surplus is less important than ending the recession.
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This post has been edited by Bam: 24 June 2013 - 04:20 PM

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#84 User is offline   icey 

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Posted 24 June 2013 - 07:33 PM

View PostBam, on 24 June 2013 - 04:19 PM, said:

I'll expand further on the point - IMO, the budget should be in balance over the course of the economic cycle. Surpluses in good years, deficits in bad; with the budget being balanced overall.


Verily, verily, the past six years have been bad, very bad indeed.
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#85 User is offline   HDMC 

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Posted 25 June 2013 - 08:33 AM

View Posticey, on 24 June 2013 - 07:33 PM, said:

Verily, verily, the past six years have been bad, very bad indeed.



No they haven't. But they would have been had we insisted on staying in surplus, because that would have required savage cuts and higher taxes.
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#86 User is offline   Bam 

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Posted 25 June 2013 - 10:03 AM

View Posticey, on 24 June 2013 - 07:33 PM, said:

Verily, verily, the past six years have been bad, very bad indeed.

There would likely have been a surplus or two in the last six years without Costello's boneheaded tax cuts funded by the mining boom.
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#87 User is offline   icey 

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Posted 27 June 2013 - 04:43 PM

"Swan abandons commitment to a surplus in 2012-13"


Swan abandons all.
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