Mark Bouris looks at the 2012-2013 Australian Budget and how it will impact on Australian families
The budget showed that the Labor government intends to win back its traditional voters by pushing money to households through tax cuts and cash bonuses for school children.
But although the budget seemed politically smart, it was built on assumptions rather than certainties.
The primary assumption is that the current government will still be the government in 2013 and beyond.
Some of the accounting tricks and new revenue programs used to put the 2012-13 budget in surplus require that the government who put them in place will still have its hands on the levers.
In the current environment, that's a hopeful assumption.
Secondly, the improved budget position is expected to come about because of cuts to government spending and an increase in tax receipts driven by next year's expected growth rate of 3.25 per cent.
Strong growth is going to be driven mainly by the mining sector because sectors such as retail, hospitality and manufacturing are not doing well. Yet many factors can arise to change growth forecasts and it will only take one sector of the economy to stumble - mining - and all bets are off.
Thirdly, there's a raft of carbon tax-related initiatives that have been factored into the budget estimates but the one to watch is the so-called 'carbon price' of $29 a tonne.
This represents revenue to the Commonwealth but the more I read about this carbon price the more it becomes apparent that it is not necessarily the price that will be paid by businesses. In fact, carbon emissions are currently being traded in Europe at below $10 per tonne and the momentum is for even cheaper carbon prices.
So, $29 per tonne actually being levied on Australian emitters is not a given.
Lastly is the Treasurer's forecast that official interest rates will decrease into 2013. This will apparently stimulate the economy.
Even if the assumption on interest rates is accurate, it's not entirely consistent with an economy growing at 3.25 per cent.
When the economy grows at 3.25 per cent and household consumption is growing by 3 per cent (as forecast) the Reserve will act to stop inflation. And that will mean interest rates go up.
And we should all be concerned about the 1.0 per cent reduction in company tax promised to business owners that the government abandoned on budget night.
If you base the coming-right of the economy on strong growth in 2013, then you'd expect Australia's 2.7 million small business owners, who employ 60 per cent of the workforce, to play some part in that.
I know that the government places their faith in an ongoing resources boom but that still leaves about 85 per cent of the economy who are flat or going backwards.
Many householders will be happy with this budget, but can I suggest that everyone who receives their School kids Bonus spend it wisely? The world economy is going through a structural change and our best defence - along with surplus budgets - is an educated population.
* Mark Bouris is the Executive Chairman of Yellow Brick Road, a financial services company offering home loans, financial planning, accounting & tax and insurance. Email Mark on email@example.com any queries you may have.
- Register Now
- Golden Dawn's Australian aspirations uncovered
- More Greeks calling Australia home
- Paedophilia charge for Greek Australian
- Greek Adelaide church in hot water again
- Fans make the Wanderers a good investment
- Do it like the Greeks says German consul
- Sixth place for Alcohol is Free
- Tailor made coffee
- AFP show support for Cyprus
- Turkey condemns NSW's genocide recognition
- 8 May 2013 | 12 Votes
- 15 May 2013 | 9 Votes
- 3 May 2013 | 9 Votes
- 8 May 2013 | 8 Votes
- 13 May 2013 | 7 Votes
- 24 Apr 2013 | 6 Votes
More from this Section
A dancer for more than 15 years, 20-year-old Natalie Marinopoulos will shine in the world's first amateur production of the famous musical, The Phantom Of The Opera
Whincup claimed a comfortable victory in the second race
A 12-year-old Russian boy who was allegedly stabbed and left for dead by a hotel employee while on vacation in Crete was recovering at a children’s hospital in Athens
Greek basketball great Nick Galis honoured by his club Aris
In Mykonos with her family, Kim Kardashian has slammed claims she was unhappy during her holiday in Greece
Greek Australian director Alkinos Tsilimidos play Red recognised
The competition includes works written in the Greek or English language in the following categories: Poetry, Short Story and One Act Theatrical Play.
NSW government donated of $29,450 to the Greek Orthodox Parish and Community of the Holy Apostles
Known as Heracleion to the ancient Greeks the town lies 9 meters down the Mediterranean ocean
A winter must in a Greek household
A lecture on Ancient Greek jewellery 'Mycenaean to Hellenistic' will be on this Wednesday at the Greek Community Centre in South Brisbane
Moving through protests, strikes and tons of graffiti, she finds the embattled capital still shows glimmers of hope.
Campaigner for the Cypriot community for years, Mr Toumbourou was beloved by many in the Greek and Cypriot community
Allowable expenses widened for small businesses in 2012-2013
The new law overturns what had been a guarantee of a job for life for workers in Greece's notoriously bloated civil service.
With one of the largest Kytherian populations living in Sydney, the small Greek island has seen a steady flow of Australian tourists visiting its shores
An anti-racism bill aimed at reining in the ultra-right Golden Dawn party by imposing tougher penalties on the incitement of racist violence has caused a major rift
It's time for Victorians of Germanic ancestry to come in from the cold, says Michael Pearce SC