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The Forum > Article Comments > Trajectory to surplus not the same thing as budgeting for a surplus > Comments

Trajectory to surplus not the same thing as budgeting for a surplus : Comments

By Gene Tunny, published 13/5/2015

There is no surplus over the forward estimates, just a steady fall in the deficit a fall which may not occur as projected, as new budget pressures emerge in coming years and the Government commits to new expenditures or renews old programs.

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I have lived in Australia since 1987. From my observation it is better for Australia not to have a surplus. When there is a surplus the government in power at the time is freer to promise goodies to sections of the population where it is most likely to secure reelection. This means that money collected from the taxpayer will not be devoted as it should be to meeting the most pressing needs of Australia but to keep a party in power.
Posted by david f, Thursday, 14 May 2015 10:02:10 AM
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The reason there is a deficit is simple. Government cannot completely avoid meeting social needs. The big end of town doesn't want to be taxed enough to meet social needs. Major parties are subservient to the desires of the big end of town.

The reasonable thing to do would be to calculate the costs to create a fair society with adequate education, alleviation of poverty, medical care, protection of the environment and other needs of society and then raise taxes enough to pay for it. That will not be done.
Posted by david f, Thursday, 14 May 2015 10:15:32 AM
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The problem with economic trajectories is that the government assumes them to be linear (or worse still exponential) when they're more likely to actually be sinusoidal! Spending more now means less will need to be spent in future; spending less now means our present needs are unfulfilled and we will probably have to spend more in the future to address that.

The quickest way back to surplus is to increase the deficit until the private sector gets back up to full strength. Only with a strong private sector can we cut government spending without it adversely affecting revenue.
Posted by Aidan, Thursday, 14 May 2015 2:17:33 PM
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