Two of the largest states in Australia handed down budgets deep in the red, New South Wales into the billions and Queensland looking at eight consecutive years of deficits.
Personal rant warning: I have an issue with any government local, state or federal posting a surplus.
Not keen on the deficit mind you but really dislike the surplus.
To me that means the government has failed in it’s duty of care by having collected way too much revenue (from me and you) and most importantly has not spent nearly enough of it (like all of it) on the things we all value from governments…. like roads, education, policing and so on.
So based on that – I conclude that recessions are actually pretty good in one way… what with countries spending their way out by massive public infrastructure projects that were sorely neglected during the heydays. You can never have too many bridges, dams, roads, hospitals, trainlines etc.
Okay, you’re freaking me out, Saturday. I’m not emotionally prepared for you saying things I agree with, let alone things I actually understand.
Personally, I think a surplus has its place, depending on the way the global economy is performing, but the federal surpluses in the Howard years indicated to me that the government of the day had an idea that the Australian population existed to service the economy, rather than the economy existing to service the Australian population.
Murray @ Midnight
So if some of the money collected by governments goes toward the building of infrastructure such as roads and bridges, etc, why is it then that during a recession or economic downturn in order to stimulate the economy they build the roads and bridges they should have built originally. Which of course begs the question, what the crap did they spend the money on in the first place? and why aren’t people protesting in the streets at the government taking money, earmarking it for public services and stuff, and then spending it on something else?
I assume in times of non-economic downturn, money goes to ‘soft’ projects that don’t relate directly to hard employment outcomes. A classic one would be investment in education, where you can spend a bucketload on resources without seeing the employment numbers fluctuate all that much at all. Same could apply to health, upgrading very expensive equipment etc, where employment numbers aren’t impacted.
In a downturn or a recession, it looks like the focus shifts to ‘people doing things’ projects, where you not only get an increase or improvement in overall infrastructure, but you also get the benefit of providing employment. So, you might be still spending money in the education sector, but it will be on physical projects that provide short to medium term employment (new buildings, facilities etc).
Or, if you were the Howard Government, you gave a huge amount of money to the Private School system, much less money to the Public School System (where the majority of Australian students go), you taxed heavily and indirectly, you pushed down worker entitlements wherever possible, since this resulted in cost savings for business and benefited their profit reporting (which hid the true health or lack thereof of your overall economic performance since it allowed for artificially inflated growth results), and you allowed infrastructure problems to build while you accumulated huge surpluses.
In essence, you were robbing Peter, Jane, Gary, Brian, Neville, Mrs Rothwell, the Bakerly Twins, Geoff and every other bugger in the country to pay for the inevitable economic downturn. Too strange.
Murray @ Midnight