Most Used Tips On How To Choose The Best Steak

The steak. Almost a staple in our diets. However, not all steaks are created equal, there are those delicious steaks, and then there are the godly tasting steaks. Knowing the subtle differences can me...

News Company - avatar News Company

3 Tips for Improving Your Physical Fitness, When You're Starting from a Pretty Bad Place

Fitness is one of the most important things in life for overall health and wellness – and maintaining a regular fitness routine has all sorts of potential benefits, ranging from better medical outco...

News Company - avatar News Company

Top 5 Events to Enjoy in the United Kingdom Every Year

The United Kingdom as any country holds numerous engaging festivals throughout the year. What makes the UK offer to stand out from the rest is their exciting travel landmarks and cities that nearly ...

Goran Kezić - avatar Goran Kezić

Friday essay: YouTube apologies and reality TV revelations - the rise of the public confession

A little over a year ago, former Australian cricket captain Steve Smith made a tearful confession and apology to the public, having been banned from cricket for 12 months for ball tampering. Smith&rsq...

Kate Douglas, Professor, Flinders University - avatar Kate Douglas, Professor, Flinders University

Population DNA testing for disease risk is coming. Here are five things to know

Screening millions of healthy people for their risk of disease can be cost-effective. But it raises ethical and regulatory concerns.from www.shutterstock.comDNA testing to predict disease risk has the...

Paul Lacaze, Head, Public Health Genomics Program, Monash University - avatar Paul Lacaze, Head, Public Health Genomics Program, Monash University

Why Sydney residents use 30% more water per day than Melburnians

Melbourne's water supplies are running low after years of drought.shutterstockThis week Melbourne’s water storage dropped below 50%, a sign of the prolonged and deepening drought gripping easter...

Ian Wright, Senior Lecturer in Environmental Science, Western Sydney University - avatar Ian Wright, Senior Lecturer in Environmental Science, Western Sydney University

From gun control to HIV: six ingredients of successful public policy

Australia’s national policy response to HIV/AIDS has been lauded as one of the best in the world.ShutterstockIn the lead up to the recent federal election, there was plenty of negative rhetoric ...

Joannah Luetjens, PhD Candidate, Utrecht University - avatar Joannah Luetjens, PhD Candidate, Utrecht University

How the dangerous evolution of Pakistan’s national security state threatens domestic stability

Protests followed the terrorist attack that killed more than 40 Indian military personnel in the disputed state of Jammu and Kashmir. AAP/Jaipal Singh, CC BY-NDIn February, a terrorist attack by Jaysh...

Robert G. Patman, Professor of International Relations, University of Otago - avatar Robert G. Patman, Professor of International Relations, University of Otago

Taming wild cities: the tall buildings of Australia show why we need strong design guidelines

Towering canyons of concrete and glass are an increasingly dominant feature of fast-growing cities like Melbourne.ymgerman/ShutterstockPrivate enterprise has shaped the skylines of Australia’s c...

Timothy Moore, PhD Candidate, Melbourne School of Design, Monash University - avatar Timothy Moore, PhD Candidate, Melbourne School of Design, Monash University

Let them play! Kids need freedom from play restrictions to develop

Playing in nature improves children's learning, social and emotional skills.MI PHAM/unsplashYou may have heard of play. It’s that thing children do – the diverse range of unstructured, spo...

Brendon Hyndman, Senior Lecturer and Course Director (Postgraduate Education courses), Charles Sturt University - avatar Brendon Hyndman, Senior Lecturer and Course Director (Postgraduate Education courses), Charles Sturt University

If you think less immigration will solve Australia's problems, you're wrong; but neither will more

More by luck than design, recent recent levels of immigration seem to be in a 'goldilocks zone' that balances economic, social and environmental objectives.www.shutterstock.comAre we letting too many ...

Cameron Allen, Researcher, UNSW - avatar Cameron Allen, Researcher, UNSW

Gamers use machine learning to navigate complex video games – but it's not free

Playing Dota 2? You can do better with a little help from machine learning.Shutterstock/hkhtt hj Some of the world’s most popular video games track your activity as you play – but they&rsq...

Ben Egliston, PhD candidate in Media and Communications, University of Sydney - avatar Ben Egliston, PhD candidate in Media and Communications, University of Sydney

Grattan on Friday: Shocked Labor moves on – but to what policy destination?

Bill Shorten has said he likes doing the family shopping, nevertheless Tuesday’s front page picture in The Australian did capture the savagery of changing political fortunes. There was Shorten, ...

Michelle Grattan, Professorial Fellow, University of Canberra - avatar Michelle Grattan, Professorial Fellow, University of Canberra

Narendra Modi has won the largest election in the world. What will this mean for India?

Narendra Modi's image was ubiquitous on the campaign trail – a sign of how much Indians have gravitated toward his cult of personality and nationalist rhetoric.Harish Tyagi/AAP The resounding vi...

Amitabh Mattoo, Honorary Professor of International Relations, University of Melbourne - avatar Amitabh Mattoo, Honorary Professor of International Relations, University of Melbourne

An appallingly perfect storm is brewing for the federal budget:

  • a government with much more income than expected

  • a federal election due within months

  • a government well behind in the polls

With the election all but announced for May, next Monday’s Mid Year Economic and Fiscal Outlook (MYEFO) will be the effective start of the campaign.

The latest figures put the government’s budget position about A$10 billion better than was expected when it was delivered last May.

The budget has been gifted much higher revenues from corporate income taxes, almost entirely driven by mining companies selling more than they expected (at higher prices than they expected) to China.

Read more: Morrison's return to surplus built on the back of higher tax – Parliamentary Budget Office

A stronger than expected domestic economy has also helped, producing small upside surprises in various other taxes and cutting the need for government spending.

In the past six months the stars have aligned to hand the government a virtual war chest with which to fight the election.

A full MYEFO, then an election budget

Prime Minister Scott Morrison has laid out the timetable.

MYEFO is due on Monday December 17 and an early Budget will be handed down on Tuesday April 2, days before the government is expected to call the May election.

In announcing it, he promised to deliver a budget surplus in 2019/20.

This tells us two things, firstly, that he has zero interest in bringing that surplus forecast forward to the current financial year, 2018-19; and second, that that surplus is unlikely to be materially different from what Morrison previously forecast (as treasurer) in May.

That will give him room to make some very expensive announcements.

With as much as (or more than) an extra A$10 billion per year to play with, Morrison’s ministers will be rubbing their hands together working out how to get the most electoral bang for the bucks.

Endangering the budget long term

This does not bode well for government finances beyond the next few years.

Highly targeted spending measures aimed at improving election prospects are rarely the best use of public funds.

New spending commitments in the just past few months are set to cost the budget just under A$500 million this year, rising to almost A$1.5 billion next year.

Spending all or most of the extra money that’s pouring into the Treasury coffers risks creating a budget black hole if the sources of that revenue prove to be temporary.

A slowdown in Australia or a drop in China’s demand for raw materials could take a big chunk out of the budget.

The damage to the government’s finances after the global financial crisis was only partly the result of spending aimed at averting a recession.

We now know a big part of the surge in revenues in the years before the crisis were temporary.

Read more: Budget policy check: does Australia need personal income tax cuts?

The increased spending and repeated lower taxes they funded were permanent, creating a structural budget deficit that has taken a decade to repair.

As mentioned, the latest upside surprises on revenue are largely due to strong commodity prices and a rising tax take from mining companies.

They might vanish as quickly as they appeared.

Commodity prices are notoriously volatile and almost entirely dependent on what is happening in China.

Problem: China

Perversely, China is buying more of our commodities because it has upped spending on infrastructure to boost a slowing economy under threat of trade war.

The boost in infrastructure spending won’t last.

Eventually we will see a shift in the drivers of Chinese growth towards domestic consumption and business investment and away from metal-intensive infrastructure spending.

It will curtail the growth of our exports and weaken our corporate income tax take.

Dark clouds are forming at home as well.

Problem: Australia

Bank profitability has stopped growing, and the indications from the Hayne Royal Commission are that bank profits will be challenged over the next few years as remediation costs rise and lending slows.

And then there is housing.

While not a direct source of revenue for the federal government, the fall in house prices could start to bite into economic activity as early as next year.

Read more: Vital Signs: we are witnessing a slowly deflating property bubble, for now

While consumers have so far looked past the lower house values, that is likely to change in 2019 if prices continue to fall.

It’d be wise to hang on to the extra billions

The best economic approach would be for this government to save money and leave it for the next government to use them prudently as needed.

It’s certainly not going to happen.

Centre right governments tend to characterise unexpected bumps in revenue as belonging to the citizenry and to be given back.

Read more: Howard's end: how the Coalition's last budget created the ground for the current deficits

They usually do it in the form of income tax cuts. We should prepare for substantial fresh income tax cuts, from as soon as July 1, 2019.

Control of the Treasury is one of the most important weapons available to a political party contesting an election.

Having a prime minister who spent several years as treasurer only enhances the weapon.

The government’s timeline for MYEFO and the April budget suggests they fully intend to use it.

Authors: The Conversation

Read more http://theconversation.com/mondays-myefo-will-look-good-but-it-will-set-the-budget-up-for-awful-trouble-down-the-track-107567