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May 13, 2013
It's hard to arouse much interest in the 2013 budget and its deficit. The latter has become a fetish.
We know that government revenue is declining, and that this means the naive commentary that the deficit is caused by a profligate, wasteful Labor Government blowing the revenue from the mining boom and maxing the credit card is too one sided.
The Coalition continue to deny that Labor's fiscal activism in the form of a fiscal stimulus insulated the Australia economy from the external shock of the global financial crisis that would otherwise have produced a deep domestic recession. The revenue decline will be a condition the Coalition has to deal with, if it gains power, because it is a consequence of the recession in the global economy that is due to the global financial crisis caused by Wall Street.
Secondly, the Howard/Costello Coalition also went on a spending spree---- they actually spent, or gave away as tax cuts, a staggering 94 per cent of the windfall gains delivered by the China-driven mining boom's first phase.
Bruce Petty
The Coalition is contradictory: they are saying that they will spend big on a family-centred welfare state and to the middle-class, as well as saying that they are committed to the politics of harsh austerity and that the era of ''universal entitlement'' is at an end. They wont reverse all those tax cuts that Howard and Costello gave to the middle class, whilst their direct action plan to achieve the bi-partisan target of a 5 drop in emissions is going to be paid for by taxpayers.
The Coalition have yet to acknowledge that the unusual strength of the Australian dollar and the breaking down of the historical correlation of the dollar and commodity prices has been due more to other countries debasing their own currencies and to capital flows for the Australian dollar than to local actions of a Labor Government in Canberra.
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Big Business want an end to the budget chaos; a credible return to surplus and an overhaul of tax, carbon and workplace policies.
They say the reform agenda has died--even though big business has opposed almost every major reform presented by the Gillard government.
Reform for Big business means that business pays less tax and is less regulated.