With a record level of government debt of $542 billion in 2019, now heading into the stratosphere, possibly one trillion dollars by the end of 2020, what is the government to do? Government revenues will be severally impacted by the economic recession/depression gripping the country in the years ahead. Despite government optimism for a quick recovery, many annalists are predicting that recovery is going to be slow and painful, with low economic activity and high unemployment for some time. The obvious calf ready for fattening is the Goods and Services Tax (GST), a rise from 10% to 15% is almost certain. But there are other avenues available to increase government income, a Luxury Tax of 20% on everything from chocolate bars to sports cars is a possibility. The removal of the largesse of negative gearing and franking credits is on the table. Company tax, royalties, excise duty, the list is endless.

Then there are the cuts to big ticket budget items, welfare, defence etc, etc, that list is also endless. The states will also have their increases and decreases to consider as well. All in all it looks like all Australians are in for a rough economic ride ahead. I think everything is going to be up for grabs, sooner rather than later.

What the government should do is forget about any notion of trying to eliminate the debt (which is at precisely 0% of our credit limit) and instead use fiscal policy to control inflation in the way we currently use monetary policy.

Pretty damn soon I would think. After all they have been consulting some extremely dumb state Labor premiers. Some of the stupidity from Qld & Vic is bound to rub off, & the inability of the girl in NSW to see the big picture will not help much either. They will all be crying for increased funding, despite the huge new debt.

The party is over.
Unfortunately, there is now only one way forward, more of the same with a bigger whip.
More immigration to prop up a housing bubble. Can't have that sector face any reality.
Less welfare and more desperation, with inevitable outcomes.
More private prisons.
Less subsidised health services, and more private enterprise user-pay health care.
Further defunding of public education, and more reliance on private education.
Stagnating pensions and less subsidies.
Further tax deductions and tax perks for big business and the wealthy. More of that.
More tolerance of anti social behaviour, since the "good people of value" feel safer in their gated communities.

In effect. Nothing much will change from the current set course.

Dan

The two major job schemes the ScumO' government brought in were attempts to shore up their voter base. The doubling of the dole with 'Jobseeker' was a hope to hold LNP voters at $1100/fortnight. At the old 'Newstart' rate it would have been a case of "see ya later mash potato" with a mass exit to Labor from the unemployed at the next election. The 'Jobkeeper' splash of $1500/fortnight is aimed at the small time employer class of traditional LNP voters, with a spin off to employees which the government hope will stick with the LNP come next election. The rest of the big handouts to business, are just largesse for traditional conservative supporters.

This will all work reasonably well if the economy springs back as the government hopes and prays, ScumO' in his virtual online Horizon Church must be praying profusely for such a miracle. Then with full steam ahead economic growth, ScumO' and the lads have nothing to worry about, leave the debt at a trillion dollars, keep borrowing at low interest rates, while the economy builds up that drive required to keep taxes and spending under control. If as many economic annalists expect, the recession/depression is deep and sustained, then the title of this thread will be what will be.

Odd-on the GST goes to 15% at budget time in October. Unemployment up around 15% by then, 15 must be the magic number for so many things to happen.

The left whinge answer to everything is to raise taxes. That this actually further depresses economic activity seems to elude them.

The answer is to reduce corporate tax to normal international levels.