Maqqa wrote on Apr 20
th, 2011 at 8:09am:
Prices are higher + We are digging more out of the ground = more tax revenue
Yet Swan can't achieve a surplus
He can't save money!!
Now he's blaming everyone else except himself!
And how can he financially say the LIBs wasted money when they achieved a surplus??
He's the one who's wasting money!! $4.5B in Pink Batts, $16.5B in BER, $20B give away
http://au.news.yahoo.com/latest/a/-/latest/9230435/no-rivers-of-gold-from-this-boom-swan/
The second phase of the mining boom won't produce the "rivers of gold" of government revenue like the former coalition government enjoyed and wasted, Treasurer Wayne Swan says.
In a keynote speech ahead of his fourth budget on May 10, Mr Swan will tell the Queensland Media Club on Wednesday that the consequences of the latest mining boom on the budget will be vastly different than the previous boom.
Unlike between 2004 and 2007 when tax revenues were revised up by a massive $334 billion cumulatively over the budget estimates, the current boom is expected to generate more modest inflows of revenue.
"Mining boom mark two will have all of the pressures of the first boom, without the surge in revenues," Mr Swan will say.
This is because the current boom starts with an already high terms of trade and, as a greater supply of global commodities come on line, the terms of trade will gradually fall.
This means economic growth rates won't be anything like those seen during the first boom, and that means revenues won't grow so quickly.
Also, while the mining sector has accounted for around 20 per cent of corporate profits over the past decade, it has made up only 10 per cent of corporate tax revenues.
This is because the mining sector is highly capital intensive, and with a rapidly growing capital base, it means rapidly growing deductions.
The economy also suffers from a hangover of the global financial crisis, tighter credit conditions, subdued consumer spending, a high Australian dollar that is hurting some industries, and the impact of this summer's natural disasters in the short term.
"This does not diminish the massive influx of activity in the private sector that will push the economy to its capacity and which will demand an intelligent policy response."
He doubts that this budget will be popular and he will take "no joy" in making cuts.
An easier alternative would be to put these cuts off until later, but that would result in even harsher cuts down the track.
"We can't and shouldn't buy support for this budget, like our predecessors did.
"There won't be rivers of gold like they wasted."
Relevance?
You didn't notice the biggest Global Economic slowdown, since the great depression?
What would the Libs have done, IF THEY HAD OF WON IN 2007?
Would they have continued cutting into disposable income? Possibly, but at what cost to the oZ Economy?
Even though Labor did waste some of their input, it was still relatively modest on the international stage.
As the following IMF chart shows, Australia is relatively well placed, in the grand scheme of things, as our deficits and total Debt are relatively low.
As you would correctly point out, the Liberals did get rid of quite a lot of Debt, during the Howard years, alhough they should have done better, given that the Howard years also co-incided with the best years of the Baby Boomer Boom.
That said, OZ will still take a hefty hit, as the eye of this massive Economic cyclone finishes passing over and the Economic winds again hit with full force!
If either the Libs or the Labs, now come on with massive hits to disposable income, as the Conservatives have done in the UK and the Republicans want to do in the USA, that would simply be the wrong action, at the wrong time!
Specific & targeted actions directed to the right issues, are an absolute must, but across the board hits to disposable income would result in an unmitigated disaster!
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