The budget! (2 Viewers)

[Kupow pow]

was the 2004-5 budget expasionary or contractionary??

 

[i-color]

mildly expansionary due to the fiscal surplus decreasing from previous year

 

[rumour]

So is the budget divided into categories?

Does any one else have an assessment on the budget?

 

[pungpui]

yea i've got a budget inclass essay assessment coming up in less than 2 weeks...i'm actually a bit worried that ill get things wrong.

There is more an emphasis on the implications (an analyse question probably knowing this is yr 12 economics!) of the budget stance, and there isnt much of that in the media around, so i've basically done it myself.

Economics is good coz you can just mix and mesh everything else in that you've learnt...so for the budget i'm gonna talk about how this years will affect eco activity, inflation, ER's, IR's, unemployment, and even BOP's if i can fit it in.

But yea i am a bit worried that my implications will be a bit wonked.

Like expansionary stance --> increase eco activity --> inflation --> RBA increasing interest rates to slow eco activty. Contradiction of expansionary policy?


Help!

 

[ameh]

Originally posted by i-color
mildly expansionary due to the fiscal surplus decreasing from previous year

what does it mean by expansionary and contractionary?


I'm beginning to like Economics as well....must be the teacher!

 

[George W. Bush]

Originally posted by pungpui
Like expansionary stance --> increase eco activity --> inflation --> RBA increasing interest rates to slow eco activty. Contradiction of expansionary policy?

Generally, the government is adopting an expansionary fiscal stance as the economy is contracting or at a trough, and the government is attempting to stimulate economc activity. Now, the idea is that fiscal policy and monetary policy work hand in hand, but that doesn't mean that one nullifies the other. During an economic downturn, the RBA is unlikely to raise interest rates just because the government is adopting an expansionary stance, that would just keep the economy where it is. For example, over the world economic downturn over this decade, many central banks and governments alike have been adopting expansionary policies to try and stimulate their economy.

 

[rumour]

Originally posted by pungpui

Like expansionary stance --> increase eco activity --> inflation --> RBA increasing interest rates to slow eco activty. Contradiction of expansionary policy?

Yeah, i don't get how inflation and interest rates are related either!!

 

[George W. Bush]

Inflation is a result of economic growth.
Interest rates can slow economic growth.

That is the relationship in the simplist form.

 

[CaR]

how has the 04/05 budget affected the income distribution in australia?

 

[kochou]

and does the budget change?? cos rambling on about the proposed one in an assessment and sayng all this wrong stuff would be bad

 

[Michael.L]

CaR... the current budget 04-05 affects the redistribution of income with the increase in goverment expenditure towards families with children. By having those baby bonuses and the Family Benefit schemes it redistributes income to those households who have greater expenditure and mariginial propensity to consume. So with the family benefits it allows allows a slight increase in marginal propensity to save to increase.

Also the superannuation co-contribution scheme also redistrubutes income to an extent, that it pays $1.50 for ever $1 any low income eaner puts into their superannuation. This has a long term affect rather then an immediate affect, as supperannuation can only be touched at retirement.

 

[Michael.L]

kochou.. The budget first passes as a proposed bill. After everyone agrees to it its finallised and passed as law. After this stage it can't change at all. Only automic stabiliser affect the figures of budget

 

[CaR]

Hey Michael.L...thankQ...ur the best

 

[jennelli28]

Hey all,
i need to write some points bout the highlights of this yrs budget, anyone got any helpful hints? =)

 

[Michael.L]

jennelli28....some highlights are :
1) the tax bracket increase is an incentive for people to look for high-income jobs therefore increase income per capita
2) the AusLink establishment allows collective infrastructure for businesses improve productivity and efficiency reduce cost etc
3) superannuation co contribution system allows redistribtuoin of income for the future, incentive to save
4) family benefit increase, allows standard of living to increase and increase real income etc.

 

[jennelli28]

hehe, hey michael, i had an essay today..and i had to put in some highlights of the budget n stuff.....i put most of all that stuff in...so hey im happi!... so thanks heaps! =)

 

[rumour]

HELP!!!!!!!!
whats the diff between:
Fiscal balance & underlying cash surplus???

 

[rumour]

Originally posted by i-color
fiscal surplus has decreased from the previous financial year.

I have seen figures where both this year and last year the FS was $700m, why is this?

Originally posted by George W. Bush
During an economic downturn, the RBA is unlikely to raise interest rates

Wouldn't it lower the rate to try and stimulate the economy?

 

[George W. Bush]

Well, assuming the fiscal policy stimulus wasn't enough, probably.

 

[blitzacer]

I have a soon to due economics presentation and its related to the budget, soo...i guess i'd rather save up on forum space and just paste here I need to know figures + impacts that this years budget would have on a single income family with 3 children, one under five and two 5-12. Any websites that would include the budget would be useful. The income earny could be 40k, 70k, or 100k. Which one would be more 'useful' for that type of family situation? Thanks ^^