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rhetoric + reality « Previous | |Next »
May 14, 2008

Will the tightening of fiscal policy make a difference to squeezing inflation? Will inflation stay above the Reserve Bank's target band? Will most of the work have to be done by the Reserve Bank as high continuing inflation flows through into higher wages and prices? Spending has been cut but not by enough to offset the $7 billion in tax cuts.

Swanbudget08.jpg Moir

The snip and tuck pruning of the Howard government excess is the downside side of the Swan budget. The upside is the nation building--- investment in health, infrastructure and education, and a more constructive relationship with state governments. Defence spending is up university spending is down. So what happened to the education revolution? Where is the military threat to Australia's security? Why not cut the increase in defence spending and put the money into universities?

I'm yet to read the budget papers about the implications of climate change and emissions trading. Since nobody is saying anything I presume that the budget papers do not address these issues. They are postponed to the future. The amount being set aside( $2.3 billion) looks inadequate. The spending has been announced before and some of it has been pushed back.

As Anna Rose observes in New Matilda Rudd and Swan missed this opportunity to make historic shift in Australia's economy by not investing enough in climate solutions to start the shift to a low carbon economy, cutting back on subsidies that encourage us to pollute and using the money to encourage emission reductions is essential.

Consequently, the proof of the Government’s commitment will become apparent when it delivers on its promise of an emissions trading system and, crucially, the target it sets in the medium term

On the other side, after the Liberal years of economic policy that drove greater demand and consumption in the short term, we have an ALP starting to make productive investments needed to underpin longer term economic growth.

| Posted by Gary Sauer-Thompson at 11:55 AM | | Comments (3)


They won, but the global economic climate, or the economic conditions is changing----see Barry Hughes good article at New Matilda, and its not looking too good for Australia. But no one--the economic mandarins--- knows what is going to happen.

Mike Steketee, national affairs editor |for The Australian, says that the budget is important particularly for where it points in the future and for revealing the sheer scope, economically and politically, it opens up for the Government.

It's laying the foundations. He points to the $20 billion from budget surpluses this financial year and next goes into a Building Australia Fund to finance transport and communications infrastructure and another $20 billion into education and health funds.

laying the foundations eh? Really?

Kevin Rudd has called climate change the greatest moral, economic and environmental challenge of our time and a top priority for his government. He made the right call.

Yet in the first Budget Rudd showed his priorities by giving climate change one fortieth of the funding allocated to Defence. Defence’s $100 billion over the next four years stands in stark contrast to the $2.3 billion for climate change over that time. He even cut back on loans to help us put solar panels on our roofs!

Is that laying the foundations? Who is Steketee trying to kid? Isn't he aware of an unruly nature biting into the economy. The latter is not boundless with infinite expansion. Climate change is a pretty effective response to the neo-liberal fundamentalists going for growth and parting all night gospel and their blind faith in market forces.