Changes to Receipts and Payments

I have graphed Payments as a percentage of GDP from the MYEFO and the Budget Papers and also the Receipts as a percentage of GDP from the MYEFO and the Budget Papers.

Payments first.

Payments 2014 budget

Modest cuts.

Now Receipts.

Receipts 2014 budget

Very modest increases – hardly worth breaking a promise for these increases. So a lot of individual pain and inefficiency for little revenue.

Overall I like the changes to universities and fees. But I’m underwhelmed. The Medical Fund is simply incoherent and the shovel ready spending is atrocious – even invoking the stimulus spending rhetoric showed poor form, I thought.

Bottom line: Debt and deficit as far as the eye can see. Hockey has not produced a surplus either this year or in the foreseeable future.

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48 Responses to Changes to Receipts and Payments

  1. JC

    They’re looking backwards and assuming tax receipts will fund their spending. The boom is over fellas.

  2. Natural Instinct

    Sinc,
    Don’t do the % of GDP graph do nominal. They have fiddled with 2013-14 and 2016-17 GDP growth to make spending seem smaller.
    REAL GDP   MYEFO   Budget
    2013-14   2.50   2.75
    2014-15   2.50   2.50
    2015-16   3.00   3.00
    2016-17   3.00   3.75

    Source: MYEFO (p2, Table 1.2), Budget (BP1, p1-7)

  3. Natural Instinct

    sorry 3.5 not 3.75 in 2016-17

  4. Rabz

    Debt and deficit as far as the eye can see. Hockey has not produced a surplus either this year or in the foreseeable future.

    How on earth could these underwhelming, mediocre idiots have got this so wrong?

    Not Happy – no more votes for you, ever.

  5. hzhousewife

    Ditto Rabz, so overwhelmingly disappointing.

  6. Johno

    Time to join the LDP. The Libs have failed us.

  7. Rabz

    The Medical Fund is simply incoherent

    Indeed – it stands out as a signal piece of inexcusable waste. $20 billion down the tubes.

    Absolutely disgraceful.

  8. A H

    That’s right, government funded research is always going to be less effective than privately funded research/investment/anything. If that 20 billion is left in private hands it will do more good.

  9. Dan

    Whatr the hell is this medical fund supposed to be doing (apart from offering me an opportunity to board the gravy train I suspect)? Can anyone work it out?

  10. Chris M

    Trivial spending cuts, ABC 1%. What limp-wrists. Why even bother?

  11. .

    A H

    The government wants to earn around 5%, the “normal” bond rate on these funds, where the taxes collected are subject to deadweight loss of around $1.2o for each $1 collected – AT A MINIMUM.

    So before the investment is made, the government simply is at the same nominal balance, before inflation.

    Then we have the issue of governmental waste “other people spending another person’s money” like Friedman would say.

  12. Pyrmonter

    As I asked on a different threat, what is it with the Liberals and government sponsored medical research. Howard did the same. Can’t believe there are many swing votes in it.

  13. Splatacrobat

    Trivial spending cuts, ABC 1%. What limp-wrists. Why even bother?

    There are two more budgets before the next election. What’s to say there isn’t another 1% next year and another 1% decrease the year after?

    It might be Joe’s way of doing them slowly.

  14. .

    Johno
    #1304423, posted on May 13, 2014 at 9:24 pm
    Time to join the LDP. The Libs have failed us.

    Couldn’t resist…

    https://www.facebook.com/photo.php?fbid=10152151383467672&set=a.379420617671.162815.134050922671&type=1&relevant_count=1

  15. Gab

    Love the Grumpy Cat one, Dot.

  16. Petros

    The Medical Fund is their way of making the GP etc co-payment more acceptable. It’s understandable but in the end just gives a bunch of conceited left-wing scientists more play money. It should have gone to paying off the debt if they were fair dinkum about paying it off.

  17. Motelier

    The clue for Sloppy Joe is that “the more people working then more people are paying tax”. My words from long ago.

    Sloppy Joe has not realised that increased workforce participation leads to (a) increased PAYG receipts, (b) increased company tax receipts, (c) increased GST receipts for the states and reduced reliance on welfare.

  18. .

    I may have to incorporate soon. Corporate taxes go up, PIT goes up along with fuel excise.

    Receipts will grow more slowly than they estimate, or possibly fall from certain bases of revenue.

  19. Gab

    Corporate taxes go up

    No, corporate tax was reduced by 1.5%, except for those paying $5mill or more in tax as they get slugged 1.5% for PPL.

  20. Rabz

    Grumpy Cats – they’re everywhere!

  21. Dan

    I would love to incorporate but would be alienating personal services income. I dont think that can be got around.

  22. twostix

    Is there a comparison between this and Costello’s first budget to be seen anywhere?

  23. egg_

    Love the “Smoking Joe” banner, Doomlord, nice touch. ;)

  24. Peter from SA

    Medical Research fund = $20 bn pissed against the wall.

    This is a Labor policy if there every was one.

    Would be a joke except $20bn is a f***load of a lot of cash!

  25. Gab

    Here‘s Abbott and Hockey promising to end “Labor’s wasteful spending” , But that was before the election. Now, they’ve increased spending even more than Labor ever did.

  26. custard

    You can be as hard nosed on the economics as you like but being in government means a whole lot more than being in opposition.

    Hockey has almost guaranteed that a mature discussion on GST, tax cuts, and relief from stupid state taxes such as payroll tax and stamp duty might finally be had and taken to the next election.

    Think ahead of the next sound bite if you could FFS!

  27. Paul

    Not Happy – no more votes for you, ever.

    Which begs the question: Who then? Its looking pretty bleak out there.

  28. Dan

    Custard, i havent seen anything in this budget that actually steers us in the right direction except for education deregulation. They have had six months and havent said a thing about payroll tax and stamp duty. Give me a break.

  29. custard

    Dan if you think all the changes you would like to see can happen in 9 months after the political situation we were in, then may I say you are naive to the media discourse that pervades us all.

  30. Dan

    Custard i would be impressed if say a single change of substance would occur, but it hasn’t.

  31. twostix

    Custard i would be impressed if say a single change of substance would occur, but it hasn’t.

    Now, now.

    There’s a new 20 billion dollar slush fund for green leftist graduates to feast on to replace the environmental ones that Abbott got rid of.

  32. James in Melbourne

    Joe must be a particularly bad Treasurer. I am sure I remember this night lat year when Wayne Swan produced four surplii – Joe could not even come up with one!

  33. Infidel Tiger

    Joe must be a particularly bad Treasurer. I am sure I remember this night lat year when Wayne Swan produced four surplii – Joe could not even come up with one!

    Bwahahaha!

  34. custard

    But now it has a chance. if this government can just achieve repealing the stupid carbon and mining taxes in this term that is a massive start.
    the next discussion will be the GST.

    but the politics says it must be taken to an election.

    Its the political reality. the time taken is ridiculous but thats the way it is…….

  35. Dan

    There’s a new 20 billion dollar slush fund for green leftist graduates to feast on to replace the environmental ones that Abbott got rid of.

    The sad thing is that it replaces the HHF which was probably also a slush fund but which has built or is building some awesome assets such the cancer centre in Melb.

    Never mind the quality…

  36. Gab

    There’s a new 20 billion dollar slush fund for green leftist graduates to feast on to replace the environmental ones that Abbott got rid of

    Yes and it’s funded by the sick using the $7 copayment which everyone will pay, not just those on health care cards or pensions.

  37. Infidel Tiger

    For the fund to get to $20 billion from a $5 contribution requires 4,000,000,000 GP visits. FFS!

    We are sick bastards.

  38. Yohan

    Where are the real cuts to spending? Oh no, we can’t do that because it would effect the ‘recovery’. Just more Keynesian claptrap from Hockey, just as he actually promised many times if you read his statements over the last 6 months.

    I do not have any faith in this government economically.

  39. Gab

    Abbott’s managed to pith off both Labor and Liberals voters. He’s finally united the nation. Gebius.

  40. custard

    @ Yohan

    Then have faith in them politically

  41. Grumpy Cats – they’re everywhere!

    Grumpy Cat should be the new banner… once Sinc is done with the celebration smokers

  42. twostix

    There’s no shortage of pharmaceutical companies in the world doing R&D. Merck’s R&D budget alone is over 7 billion a year.

    The government could entice one or two of these companies to properly come to Australia via low taxes, easy regulation and a well educated population thus bringing their billions of dollars here.

    Or, I suppose, the Commonwealth Government could come up with their own government R&D fund and try and set our university graduates from our (according to Hockey) non-top 20 universities to compete directly with Big Pharma who have nothing but people from the top 20 uni’s in the world working for their research divisions.

    So where Merck outputs dozens of medical breakthroughs and a torrent of research every year the governments efforts, for similar cost, will output a trickle.

    But that’s not what it’s for is it? It’s really to keep the legions of useless- in-Australia’s-tiny-economy “research” style uni-graduates busy and out of “climate” and “environmental” political activism (masquerading as “research”, “studies” and “science”) where they’ve done so much damage to the nation. It’s literally a 20 billion dollar asylum.

  43. For the fund to get to $20 billion from a $5 contribution requires 4,000,000,000 GP visits. FFS!

    I believe it includes referrals to pathology, x-rays, etc… this is a good move

    Funny that there has been a trend for more specialised pathology clinics to collect your sample over the years. Back in the day he’d have taken the sample himself – now he refers you to pathology. We might see a reverse trend in this now – which is what the “G” stands for in GP, so perhaps rightly so… so not only will there be less doc visits, they’ll be less multiple visits (and thus medicare payments) resulting from said visit.

    That said, I reckon the 4,000,000,000 figure must be wrong… it can’t be that much, can it? Did they account for the fact that the fees will result in less visits?

  44. The government could entice one or two of these companies to properly come to Australia via low taxes, easy regulation and a well educated population thus bringing their billions of dollars here.

    I’ve always liked the idea of R&D tax incentives myself – but then if taxes were as low as I’d like them, it’d be a moot point. Government run schemes and funds? Not a fan of those at all.

  45. Sid

    It is obvious the Libs have no real intention of cutting expenditure and restoring public finances. It is not a stretch to believe that they have learned that getting the fiscal house in order eventually just bankrolls the idiots in Opposition. The more you believe the other party will squander money the less likely you are to leave them the money to squander.
    If I was the PM and had full faith that the Opposition will squander whatever it can (which is clearly true), and believed that deficits aren’t so much the problem as is the level and quality of expenditure, and I believed that the quality of my expenditure was superior (as of course I would), then I would be in no great hurry to leave any pennies in the till come the day I’m booted out of office. I might even convince myself it was in the public interest. The Republican/Democrat entanglement brought to Australia was predictable given the pillaging of Rudd and Gillard.
    On the other hand, maybe the above is all wrong. It is a much more comfortable lifestyle in Canberra when you don’t have to fight for cuts, but can just dole out dollars. Maybe the Libs believe that if they are comfortable and relaxed in leadership then the waves of soft euphoria will just roll out from Canberra and our silly concerns about incomes, affordability and our kids not being enslaved to the failures of a future European style government will just melt away.
    While fiscal policy is shaping up as a failure, there are no shortage of other things that they can get right. However, given this budget, it seems we will more often simply get a Labor stoopidity replaced by a Liberal stoopidity.

  46. Oh come on

    I don’t get this co-payment business. My quack stopped bulk billing 20 years ago. Now a standard consult costs $65, of which Medicare pays less than half. I’ve been co-paying since I flew the oldies’ coop. Luckily I can count on one hand the number of times I’ve had to visit a GP over that period of time.

  47. Oh come on

    The government could entice one or two of these companies to properly come to Australia via low taxes, easy regulation and a well educated population thus bringing their billions of dollars here.

    Yes yes but then TA and co would have no prospect of claiming they rediscovered penicillin or whatever the fuck they think that $20 billion boondoggle’s going to achieve.

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