Monday, 28 November 2011

Fascinating Fiscal Facts - Who's addicted to spending and taxing?

The MYEFO presented some wonderful historical tables on various aspects of the Budget and fiscal policy. The highlights, to me at least are probably:

  • Total government receipts (tax, dividends, fees and the like) was 21.6% of GDP in 2010-11, the lowest level since 1973-74 when Frank Crean was Treasurer.
  • The tax to GDP ratio fell to 20.0% in 2010-11, the lowest since 1978-79 and is a whopping 4.2% of GDP below the record tax to GDP ratio raked in by the Howard government in 2004-05 and 2005-06. That's a lesser tax take of around $60 billion for one year that was taken from tax payers during the peak period of the Howard government. As mentioned elsewhere, it is easy to register a budget surplus when you tax the living daylights out of the population.
  • Real government payments (spending) will rise by an average of less than 0.1% per annum in the 3 years to 2012-13, the weakest 3 yearly spending growth since the mid to late 1980s under the Hawke/Keating Government. Never once did the Howard Government deliver a cut in real government spending - in fact real spending grew by a thumping 3.5% per annum for the last 5 years of the Howard government.
  • Payments (spending) will be 23.6% of GDP in 2012-13 - around 1.5% of GDP below the average of the last 30 years. In the 12 Howard Government Budgets, spending to GDP averaged 24.2% of GDP: and only in 3 years out of 12 of the Howard Government was the spending to GDP ratio lower than the Gillard Government is projecting for 2012-13. Which government is addicted to spending?
  • The 4.3% of GDP turnaround in the Budget balance in the 3 years to 2012-13 (from a deficit of 4.2% to a surplus of 0.1%) is the most rapid turn in the fiscal position on record.
There are more gems I'm sure, but that is for another day.

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