Economic growth good – so, Budget Crisis… what budget crisis?
Monday, 12 May 2014
“I fail to see any need for a special Deficit Tax in the Federal Budget,” said UNSW’s Australian School of Business Tim Harcourt. “Indeed, the economy in Australia is looking remarkably healthy, with only some slight tweaks needed to keep it in order.”
Academics from the Australian School of Business at UNSW Australia are available to give their analysis of the 2014 Federal Budget on Tuesday 13 May.
Tim Harcourt, the J.W. Nevile Fellow in Economics at the Australian School of Business said “I’ve looked at the fundamentals, and they are all giving a healthy picture. The net debt to GDP ratio in Australia is only 11 per cent compared to the OECD average of 50 per cent.”
“Its good news all round on unemployment. The government’s own figures show that the total number of jobs in Australia rose by 14,200 to a seasonally adjusted 11.5 million in the month. Inflation is low, wage growth is moderate, and even interest rates look like being on hold for a while, however there is now almost a concern they may have to trickle up a little later in the year to clamp down on growth.”
He said economic growth in Australia is also looking good at point eight percent – up from point six in the previous quarter. “Ok, it’s not quite up to the long term average growth rate but still quite healthy. Indeed in world terms Australia is only being eclipsed by – in an ironic turn around – some of the newly resurgent European boom economies, such as the UK where the forecast is for 2.9% growth this year, as the UK unexpectedly booms again.”
“In these circumstances having a debt levy makes no sense. It wouldn’t raise enough revenue unless it is jacked up or its ‘temporary’ status is removed. There are better ways to structurally change the budget – take away high income super concessions, eliminate middle class welfare (such as the private health care rebate), eliminate some government agency duplication (which was sensibly recommended by the commission of audit), and reform federal-state relations getting them ready for the 21st century.”
For further comment call
Tim Harcourt on 02 9385 3816, 0408 485 479, or Email
Julian Lorkin: 02 9385 9887