Tag: The Budget

Beyond The Budget BS…

In this show, I want to go beyond the superficial analysis of the recent budget given my in box has been flooded by “analysis: thousands of sources, much missing the point.

And in passing a recognition that the proposal to remove the non compete clause in employee contracts, is one welcome surprise.

But the Spin was in full force through the budget speech this week, with Chalmers claiming it represented the biggest ever” improvement in the budget bottom line since Labor’s May 2022 election, based on the May 22 forecast deficit of $79.8 million. This is the annual loss, not the cumulative total! Now, wall-to-wall deficits projected are projected ahead, so it’s a bit rich for the Treasurer to spin so hard, we all might get giddy.

Actually, the budget has been in deficit 33 of the past 50 years – or two-thirds of the time since Gough Whitlam lost office. And yet in that time our standard of living has improved and we still exist as a sovereign nation. So why all the focus on deficits and surrounding spin?

In summary, according to KPMG we got a forecast underlying cash balance of $42.1 billion in 2025-26; a $4.8 billion improvement on the recent MYEFO estimate. But Nearly $85 billion of “off-budget” spending over the forward estimate period, resulting in cumulative headline cash balance deficits of $236 billion over the four years to 2028-29.

But whether we look at the gas cartel, or tobacco tax, so many issues of importance were missed, indicative a a budget for the election, not reform for the ages….

http://www.martinnorth.com/

Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Beyond The Budget BS…
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Beyond The Budget BS…

In this show, I want to go beyond the superficial analysis of the recent budget given my in box has been flooded by “analysis: thousands of sources, much missing the point.

And in passing a recognition that the proposal to remove the non compete clause in employee contracts, is one welcome surprise.

But the Spin was in full force through the budget speech this week, with Chalmers claiming it represented the biggest ever” improvement in the budget bottom line since Labor’s May 2022 election, based on the May 22 forecast deficit of $79.8 million. This is the annual loss, not the cumulative total! Now, wall-to-wall deficits projected are projected ahead, so it’s a bit rich for the Treasurer to spin so hard, we all might get giddy.

Actually, the budget has been in deficit 33 of the past 50 years – or two-thirds of the time since Gough Whitlam lost office. And yet in that time our standard of living has improved and we still exist as a sovereign nation. So why all the focus on deficits and surrounding spin?

In summary, according to KPMG we got a forecast underlying cash balance of $42.1 billion in 2025-26; a $4.8 billion improvement on the recent MYEFO estimate. But Nearly $85 billion of “off-budget” spending over the forward estimate period, resulting in cumulative headline cash balance deficits of $236 billion over the four years to 2028-29.

But whether we look at the gas cartel, or tobacco tax, so many issues of importance were missed, indicative a a budget for the election, not reform for the ages….

http://www.martinnorth.com/

Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/

The Migration Question Amplified; But Not Tackled… By Anyone!

Last week Michele Bullock the RBA Governor was asked a good question about how high migration might impact inflation. But her answer was well, weird, as she tried to trade off pressure on the housing market from higher demand driven rent rises against supplying more workers to meet business demand (and implicitly increasing economic activity).

Treasurer Jim Chalmers, Speaking at the National Press Club on Wednesday explained that Tuesdays Budget forecast of headline CPI inflation falling to 2.75% by the end of Financial Year 2024-25 (not I January as I noted some reporting claimed), was predicated on at least in part the government cutting net overseas migration.

“We’re seeing a substantial moderation in inflation in the forecasts and in the last couple of years as well, and that is largely because of how we’re managing the budget but it will also be increasingly about how we’re managing the population as well”, Chalmers said.

Right, so it must also be true that if lower migration will ease inflation, then high migration will drive inflation higher.

Then we got Opposition Leader Peter Dutton’s policy as part of his budget response. He promised that a Coalition government would drastically slash migration as its main way of freeing up more than 100,000 homes over five years. A Dutton government would reduce Australia’s permanent migration program by a quarter – from 185,000 to 140,000 for the first two years “in recognition of the urgency of this crisis”, Dutton said.

Treasurer Jim Chalmers has described the opposition leader’s budget reply proposing migration cuts as an “unhinged and risky rant”.

But again, it’s a battle of announcables, with numbers being banded about. But my take is that neither side of politics are really wanting to take this on seriously, despite the direct link to higher inflation.

In both cases, this is more of policy announcements to try and win an election than nation building policy reform, which is needed for both migration and the gas market.

The net result will be higher inflation for longer, requiring higher interest rates than otherwise needed.

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
The Migration Question Amplified; But Not Tackled… By Anyone!
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Its Edwin’s Monday Evening Property Rant!

In our latest rant Edwin and I tease apart the news surrounding the budget “announcables” relating to housing, discuss the rise of the “distressed sale” and examine how the WeChat Chatters are calling out Victoria as a place to exit.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Its Edwin's Monday Evening Property Rant!
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Its Edwin’s Monday Evening Property Rant!

In our latest rant Edwin and I tease apart the news surrounding the budget “announcables” relating to housing, discuss the rise of the “distressed sale” and examine how the WeChat Chatters are calling out Victoria as a place to exit.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Budget Smudge-it As “The Announcables” Flow!

The Budget on Tuesday evening comes at an interesting time in the life of the current Government, as well as for ordinary Australians.

With a year or so to go before the next election which must be held by May 2025 at the latest. (or sooner perhaps if Albo sees a window of opportunity) this would normally be a give-away budget to set the scene. Except that with inflation still strong and being driven by local factors such as wages growth and energy costs, as well as high housing costs thanks to very strong migration, the headroom is limited, at best.

The Announcables so far, which have continued through the weekend, are portraying it as a responsible budget aimed at containing inflation, supporting housing, and quote good for women.

Charlmers said this week his goal was to chart “the responsible middle course between those who want us to slash and burn in the budget, and those who think that it should be some kind of free-for-all of spending”.
Others less charitable might say it will contain a wadge of announcables, which sound good, but which are not tackling the real long term issues Australia faces.

Remarkably it seems further tax payer funds will flow to the construction sector. While the Governments goal of 1.2 million well-located homes built in five years starts on 1 July, remember just 12,850 homes were approved for construction in January. This seems a gulf which needs way more than announcables and political party tricks.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Budget Smudge-it As “The Announcables” Flow!
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Budget Smudge-it As “The Announcables” Flow!

The Budget on Tuesday evening comes at an interesting time in the life of the current Government, as well as for ordinary Australians.

With a year or so to go before the next election which must be held by May 2025 at the latest. (or sooner perhaps if Albo sees a window of opportunity) this would normally be a give-away budget to set the scene. Except that with inflation still strong and being driven by local factors such as wages growth and energy costs, as well as high housing costs thanks to very strong migration, the headroom is limited, at best.

The Announcables so far, which have continued through the weekend, are portraying it as a responsible budget aimed at containing inflation, supporting housing, and quote good for women.

Charlmers said this week his goal was to chart “the responsible middle course between those who want us to slash and burn in the budget, and those who think that it should be some kind of free-for-all of spending”.
Others less charitable might say it will contain a wadge of announcables, which sound good, but which are not tackling the real long term issues Australia faces.

Remarkably it seems further tax payer funds will flow to the construction sector. While the Governments goal of 1.2 million well-located homes built in five years starts on 1 July, remember just 12,850 homes were approved for construction in January. This seems a gulf which needs way more than announcables and political party tricks.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

A Swiss Cheese Style Budget…

A quick summary of the budget from last night, with a focus on the assumptions and overall projections ahead. All up, it is an improvement from the previous budget, but still contains some pretty heroic assumptions. Includes some content from The Conversation.

Sir Humphrey would be proud!

Today’s post is brought to you by Ribbon Property Consultants.

My Two Cents Worth On The Upcoming Budget!

Josh Frydenberg’s March 29 budget — his fourth as Treasurer — is expected to reveal a big deficit for 2022-23. In December, it was estimated it would be just under $99 billion, but the updated figure is expected to have tumbled by tens of billions of dollars. That said, we still have a structural deficit of close to $1 trillion dollars, and the costs of that debt will rise, as interest rates rise, so that’s a problem. And the structural deficit will continue, that’s to large spending on programmes like NDIS, Centrelink Payments, Medicare, and Defence.

And although the current year deficit will fall from $99 billion as predicted, it is worth remembering that to date the Government has promised to spend some additional $70 billion over a number of years on a range of programmes, some with frankly dodgy motivations (some might think pork-barrelling was a better term).

There will be some short-term relief, to assist with the cost-of living pressures, which according to recent surveys are driving household confidence lower. But the whole exercise is political.

The Government will of course go on talking about the $250 billion savings households are sitting on, thanks to COVID and Government payments over the past couple of years, but as I have shown before this is not equally spread across the population and taking in general terms about “household balance sheets are in good shape” belays the truth that averages mask, and many households are really up against it as costs of living rise, and with the prospect of higher interest rates ahead.

Go to the Walk The World Universe at https://walktheworld.com.au/

New Zealand: Is “Well-Being” On The Cards? [Podcast]

A deep look at the framing of the upcoming budget – if well-being is central, then significant sectors will need support.

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
New Zealand: Is “Well-Being” On The Cards? [Podcast]
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