Budget~09 05 12


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  • David Rumbens
  • Budget~09 05 12

    1. 1. What state are we in?Comments on the 2012-13 Federal BudgetProfessor Ian HarperDeloitte Access Economics9 May 2012
    2. 2. A ‘beautiful’ set of (aggregate) numbers 2010-11 2011-12 2012-13 2013-14GDP growth – Budget (%) 2.0 3.0 3.25 3.0GDP growth – DAE (%) 2.0 2.9 3.2 3.5Unemployment – Budget (%) 4.9 5.25 5.5 5.5Unemployment – DAE (%) 5.1 5.3 5.5 5.5CPI – Budget (%) 3.6 1.25 3.25 2.5CPI– DAE (%) 3.1 2.6 3.2 2.8Wages – Budget (%) 3.8 3.5 3.75 3.75Wages– DAE (LPI)(%) 3.8 3.6 4.0 4.2Current account balance -Budget -2.4 -3 -4.75 -6Current account balance – DAE(% of GDP) -2.4 -2.7 -3.9 -4.3Source: Deloitte Access Economics; Budget Statement No 22 © 2012 Deloitte Touche Tohmatsu
    3. 3. But they conceal the two-speed economySource: Budget Statement No 13 © 2012 Deloitte Touche Tohmatsu
    4. 4. Unprecedented boom in mining investmentSource: RBA 1861-2009, Maximising growth in a mining boom, (2011) Ed Shann, 2009-2014.4 © 2012 Deloitte Touche Tohmatsu
    5. 5. The ‘Brisbane Line’ North-west of Brisbane Line 20% of employment 53% of investment projects South-east of Brisbane Line: 80% of employment 47% of investment projectsSource: ABS 6291.0.55.001, Deloitte Access Economics’ Investment Monitor5 © 2011 Deloitte Touche Tohmatsu
    6. 6. The Budget and the two-speed economy - 1 • The Budget is projected to return to surplus in 2012-13 – a 1.4% of GDP increase in revenue and a 1.0% of GDP decline in expenditure, one of the sharpest fiscal contractions on recordSource: Budget Statement No 16 © 2012 Deloitte Touche Tohmatsu
    7. 7. Debt and deficitsSource: IMF world economic outlook, Treasury7 © 2012 Deloitte Touche Tohmatsu
    8. 8. The Budget and the two-speed economy - 2 • Spreading the benefits of the boom – Increase in Family Tax Benefit Part A – New supplementary allowance for people on income support payments – The new Schoolkids bonus – Lifting the tax free threshold from $6,000 to $18,200 • Helping business to invest – Carry-back tax losses – Tax breaks for small business (but delaying company tax break of 1%) • Building a more productive workforce – National Partnership Agreement on Skills Reform – New skills measures to assist mature age workers • Building productivity by investing in infrastructure – Duplicate the Pacific Highway by 2016 – $350 million per year for Roads to Recovery program – $232 million towards the Torrens and Goodwood rail project in Adelaide8 © 2012 Deloitte Touche Tohmatsu
    9. 9. Implications for monetary policySource: Reserve Bank of Australia; Australian Stock Exchange9 © 2012 Deloitte Touche Tohmatsu
    10. 10. Unresolved questions •Will the projected Budget surplus actually materialise? •Will the planned fiscal contraction do more harm than good to the non- resource sectors of the economy? •Will conditions in Europe deteriorate to the point that we need further fiscal stimulus? •Will commodity prices fall sufficiently to slow even the resources sector of the economy? •Will the Budget boost the confidence of the cautious consumer?10 © 2012 Deloitte Touche Tohmatsu
    11. 11. About DeloitteGeneral information only Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited byThis presentation contains general information only, and none of Deloitte Touche Tohmatsu Limited,its member firms, or their related entities (collectively the “Deloitte Network”) is, by means of this guarantee, and its network of member firms, each of which is a legally separate and independentpresentation, rendering professional advice or services. entity. Please see www.deloitte.com/au/about for a detailed description of the legal structure ofBefore making any decision or taking any action that may affect your finances or your business, you Deloitte Touche Tohmatsu Limited and its member firms.should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible Deloitte provides audit, tax, consulting, and financial advisory services to public and private clientsfor any loss whatsoever sustained by any person who relies on this presentation. spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. Deloittes approximately 170,000 professionals are committed to becoming the standard of excellence. About Deloitte Australia In Australia, the member firm is the Australian partnership of Deloitte Touche Tohmatsu. As one of Australia’s leading professional services firms. Deloitte Touche Tohmatsu and its affiliates provide audit, tax, consulting, and financial advisory services through approximately 5,700 people across the country. Focused on the creation of value and growth, and known as an employer of choice for innovative human resources programs, we are dedicated to helping our clients and our people excel. For more information, please visit our web site at www.deloitte.com.au. Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited11 © 2011 Deloitte Touche Tohmatsu11