Will a budget surplus kill the economy?

[staringclown 74]

I know most here are in favour of debt reduction. There are very few Keynesians here. I know that the goose won't achieve a surplus without some creative accountancy. I also believe that sudden shocks to the economy can have deleterious effect. Thoughts?

[tor 107]

A surplus means the government has taken more taxes than it needs right?

That seems silly. Ideally the government would take exactly what it needs and. more importantly, spend it well.

Which is where the real issue lies.

Surplus / Deficit seems a stupid thing to look at to me. I am guessing it would be easy to have a surplus if it was actually important. Don't spend any money at all. Sure there would be no military or social welfare or anything but you'd have a surplus.

[staringclown 74]

A surplus means the government has taken more taxes than it needs right?

That seems silly. Ideally the government would take exactly what it needs and. more importantly, spend it well.

Which is where the real issue lies.

Surplus / Deficit seems a stupid thing to look at to me. I am guessing it would be easy to have a surplus if it was actually important. Don't spend any money at all. Sure there would be no military or social welfare or anything but you'd have a surplus.

That's the problem though isn't it? Notionally we are a rich country. It's just a pity it's so expensive to live here. We can have a surplus but that involves some deeply offensive cuts for most of society. The decision to really achieve a surplus would condemn Labor to electoral defeat. The magnitude of the required cuts to really achieve surplus is overwhelming, Even a faux surplus is likely to damage them. They are the ones taking the candy back that howard promised. The choices are all politically difficult. Leadership is required and the country is self obsessed when it comes to who should pay. Most believe high income earners should pay... the system dictates that you acquire debt as the path to prosperity.

[savagegoose 26]

i recall the world when howards gov got booted. We had what? $1.50 petrol, everything going to the moon price ways, and popele just thinking to themselves, if this is success gimme some failure. not everone is adding %10 to their wages ea year, not everyone is pulling dual $100k incomes per house.

some are really battling, and just want a nice easy cost of living to deal with, not goal posts getting close togther the longer they look at them.

thats why labor won, it offered some alternative, and now the retards are chasing the same performance figures that the libs wanted. who is labor trying to satisfy anyhow, tony abort?

sure it will be a credibility smack of they dont do it., but what is really important ot people back then when the libs got booted, wwas hospitals, health, police, schoools, and the cost of living. and maybe some aspirations to become a slum lord. pretty much the same as now, and f*ck a balanced budget , just make life a little easier for the avg joe sixpack.

[staringclown 74]

i recall the world when howards gov got booted. We had what? $1.50 petrol, everything going to the moon price ways, and popele just thinking to themselves, if this is success gimme some failure. not everone is adding %10 to their wages ea year, not everyone is pulling dual $100k incomes per house.

some are really battling, and just want a nice easy cost of living to deal with, not goal posts getting close togther the longer they look at them.

thats why labor won, it offered some alternative, and now the retards are chasing the same performance figures that the libs wanted. who is labor trying to satisfy anyhow, tony abort?

sure it will be a credibility smack of they dont do it., but what is really important ot people back then when the libs got booted, wwas hospitals, health, police, schoools, and the cost of living. and maybe some aspirations to become a slum lord. pretty much the same as now, and f*ck a balanced budget , just make life a little easier for the avg joe sixpack.

Does it really matter to joe six pack battler who is in charge SG? I guess you go off the latest policy announcement from either side. The ultimate swinging vote. The margins getting squeezed with ridiculous rents is objectionable. Let alone people that require health services on top. Civilisation is expensive people. Get used to it. Guaranteed someday it will be you that requires some tender care.

[Solomon 34]

A surplus means the government has taken more taxes than it needs right?

That seems silly. Ideally the government would take exactly what it needs and. more importantly, spend it well.

Which is where the real issue lies.

Surplus / Deficit seems a stupid thing to look at to me. I am guessing it would be easy to have a surplus if it was actually important. Don't spend any money at all. Sure there would be no military or social welfare or anything but you'd have a surplus.

This is such good logic, it amazes me.

Tor is so right.

But exactly how much taxes should any government receive.

On one extreme, we could have no/low taxes, but everyone would have to pay for the services themselves.

Or we have governments seeking excessive taxes and then doing useless things with all the money.

I wish I knew where the balance lay.

It is Tor's point above. A government should only take what they need.

I just think that is all stuffed up, right now.

Governments don't know how much they need.

They work the other way. See how much we get, and then spend it accordingly.

Imagine a government who knew exactly what they would need and only ask their citizens for that amount.

Totally unimaginable.

[savagegoose 26]

well take more than you need, and hand a buch back around election time, seems to be a winner.

[Turkey 17]

This is such good logic, it amazes me.

Tor is so right.

But exactly how much taxes should any government receive.

On one extreme, we could have no/low taxes, but everyone would have to pay for the services themselves.

Or we have governments seeking excessive taxes and then doing useless things with all the money.

I wish I knew where the balance lay.

It is Tor's point above. A government should only take what they need.

I just think that is all stuffed up, right now.

Governments don't know how much they need.

They work the other way. See how much we get, and then spend it accordingly.

Imagine a government who knew exactly what they would need and only ask their citizens for that amount.

Totally unimaginable.

I agree that govt should not be attempting to run a surplus or deficit but simply balancing the books.

But then we run into the problem of what to cut, what politically difficult decisions will be made (none, ever, unless forced, kick the can to the next election / end of your term) etc.

It seems to have happened most places in the Western world that government has grown in size and power. It seems to easy, once elected you make the rules, grow your size, expand your reach/powers, determine your salaries etc and you can't go broke like a private company.

I don't know if there is any solution except for an economic collapse and reset button once every 80 years or so.

[Turkey 17]

Does it really matter to joe six pack battler who is in charge SG? I guess you go off the latest policy announcement from either side. The ultimate swinging vote. The margins getting squeezed with ridiculous rents is objectionable. Let alone people that require health services on top.

I hope Romney wins in the US in spite of me thinking that he has the potential to be even worse than Obama and further up the arses of the bankers. It's simply a case of detesting the idea of Obama getting a second term more.

I think the same applies here. People are so fed up with Labor that they want someone else, anyone else, in power. Even if it means a budgie smuggling wingnut PM.

I don't think that life will be greatly different under either party so let's give the other clowns a turn to bat.

Civilisation Australia is expensive people.

Fixed it for you

[staringclown 74]

I hope Romney wins in the US in spite of me thinking that he has the potential to be even worse than Obama and further up the arses of the bankers. It's simply a case of detesting the idea of Obama getting a second term more.

I think the same applies here. People are so fed up with Labor that they want someone else, anyone else, in power. Even if it means a budgie smuggling wingnut PM.

I don't think that life will be greatly different under either party so let's give the other clowns a turn to bat.

Fixed it for you

I'm bound to reply in spite of inebriation levels. What exactly are we fed up with? Me, personally can load you up with numerous beefs. I is one of natures whiners. But in general what is the great malaise at the moment? ROI is at average levels just not in property

[Turkey 17]

I'm bound to reply in spite of inebriation levels. What exactly are we fed up with? Me, personally can load you up with numerous beefs. I is one of natures whiners. But in general what is the great malaise at the moment? ROI is at average levels just not in property

I could get in a cheap shot that life is good for well-paid Canberra bureaucrats who get above inflation raises every year but things are different outside the ACT. But luckily I will refrain from doing so...

Living on the Gold Coast I get to see a number of people on or around median wages and I have got to witness the effects of rising costs of living for essentials along with fudged BS inflation numbers.

When people spend an ever greater amount of their salary on things rising above [official] inflation like rates, electricity, water, rego, insurance etc. that cannot be (realistically or sensibly) dodged then the discretionary stuff that makes life enjoyable gets hammered.

E.g. I see friends not going to sports games that they would have attended in the past, playing less / giving up sports because they can no longer afford the fees, equipment or travel, having "staycations" instead of traveling etc.

Perhaps this is another skewed sample, Canberra and the GC are probably 2 extremes in Australia (though I think it's a bit f****d up that the capital is the most prosperous city due to govt jobs but I digress).

[Bernard L. Madoff 14]

Notionally we are a rich country.

No we are not. You mean the minerals? The mining companies are doing here what they do in Africa, dig up crown land, keep the profits and leave a tithe. Royalties on Iron are $13 on a Tonne that sells for $150US/Tonne. Coal is about the same rate. The RSPT was the answer (in hindsight).

How else are we rich?

Lets pay the debts and see how rich we are...

GDP $1.4Trillion

Debt $3.9Trillion

If thats rich what is the definition of 'living beyond ones means'? Or, technically bankrupt?

http://www.australiandebtclock.com.au/

It's just a pity it's so expensive to live here.

Why? Why does a German car cost 120% more here than it does in England? Why are locally grown veges more expensive here than imported ones in Moscow? Why is a pair of jeans made in Indonesia 100% more expensive than Canada?

[Turkey 17]

If thats rich what is the definition of 'living beyond ones means'? Or, technically bankrupt?

It's amazing how many people who are superficially wealthy and living a great "lifestyle" (puke) have confessed to me how their debt is stressing them silly after half a bottle of Jack (the world's best truth serum!).

Edited April 18, 2012 by Turkey

[Mr Medved 48]

It's amazing how many people who are superficially wealthy and living a great "lifestyle" (puke) have confessed to me how their debt is stressing them silly after half a bottle of Jack (the world's best truth serum!).

Enjoy our inflated incomes while they last. We could easily tend towards the way of Argentina over time.

[staringclown 74]

I could get in a cheap shot that life is good for well-paid Canberra bureaucrats who get above inflation raises every year but things are different outside the ACT. But luckily I will refrain from doing so...

Living on the Gold Coast I get to see a number of people on or around median wages and I have got to witness the effects of rising costs of living for essentials along with fudged BS inflation numbers.

When people spend an ever greater amount of their salary on things rising above [official] inflation like rates, electricity, water, rego, insurance etc. that cannot be (realistically or sensibly) dodged then the discretionary stuff that makes life enjoyable gets hammered.

E.g. I see friends not going to sports games that they would have attended in the past, playing less / giving up sports because they can no longer afford the fees, equipment or travel, having "staycations" instead of traveling etc.

Perhaps this is another skewed sample, Canberra and the GC are probably 2 extremes in Australia (though I think it's a bit f****d up that the capital is the most prosperous city due to govt jobs but I digress).

Well done on the restraint!

I would have had have replied that I spent many years as working poor in sh*t jobs and spent a lot of cash on tertiary fees to get to be a well paid public servant.

I don't remember having a bad time being poor. Even cask wine and nikov vodka and orange didn't seem too bad. Didn't know any better. Be tougher to go back to it I guess.

Most of the people I hung out with didn't buy property so I didn't get to go to the dinner parties discussing house prices and didn't get the peer pressure to buy. Do the people forgoing the sport have mortgages?

[staringclown 74]

No we are not. You mean the minerals? The mining companies are doing here what they do in Africa, dig up crown land, keep the profits and leave a tithe. Royalties on Iron are $13 on a Tonne that sells for $150US/Tonne. Coal is about the same rate. The RSPT was the answer (in hindsight).

How else are we rich?

Lets pay the debts and see how rich we are...

GDP $1.4Trillion

Debt $3.9Trillion

If thats rich what is the definition of 'living beyond ones means'? Or, technically bankrupt?

http://www.australiandebtclock.com.au/

Well I did say notionally.

Why? Why does a German car cost 120% more here than it does in England? Why are locally grown veges more expensive here than imported ones in Moscow? Why is a pair of jeans made in Indonesia 100% more expensive than Canada?

For the same reason living in Canberra is expensive I think. If people pay it they've got no reason to stop charging those prices. But at least there's a workaround online for sub $1000 to placate me for that particular indignity. Doesn't help with the cars of course. Libs will most likely get rid of the luxury tax fairly early and an audi would be nice.

[staringclown 74]

So Gillard has broken convention and is pressuring the RBA claiming that achieving a surplus will give scope for rate cuts.

It will if she pulls $40+ billion from the economy and we go into recession.

[Turkey 17]

I don't remember having a bad time being poor. Even cask wine and nikov vodka and orange didn't seem too bad. Didn't know any better. Be tougher to go back to it I guess.

I think that's exactly the problem, people are having to drop their living standards whereas they are used to improvement over their working lives.

Most of the people I hung out with didn't buy property so I didn't get to go to the dinner parties discussing house prices and didn't get the peer pressure to buy. Do the people forgoing the sport have mortgages?

It varies. The small sub-species of people renting with lots of cash in the bank (common on this forum but pretty rare in real life!) are OK.

I see these people getting squeezed:

--Younger people without a mortgage who have had to contend with high costs of living their entire working lives and therefore found it more difficult to save than Gen X and older people.

--People with a mortgage who bought after prices became silly. One could say they shouldn't have bought at silly prices but many bought when prices were getting even sillier and were worried they would miss out entirely.

--Lots of tradies, with or without a mortgage. Some are still very busy but most say things have died in the arse (sorry, I love that saying to bits and will use it at any opportunity).

--Many small business owners - small retailers, small service businesses etc. They are taking it 3 ways, rising personal costs, rising business costs and (quite often) declining business revenue.

--Older people who don't have a big income. Doesn't really matter whether they have a mortgage (although it makes it worse). Their disposable income is getting creamed and time is running out for them to do anything on the income side.

[Turkey 17]

For the same reason living in Canberra is expensive I think. If people pay it they've got no reason to stop charging those prices.

I tend to take the opposite view. If there are abnormal profits to be made, there will be lots of people looking to get in there and claim a slice of the action. This will create competition and drop prices.

That this has not happened indicates a big problem. There has to be some kind of toxic mix of government regulations and fees driving up prices, unpunished monopolistic behaviour, backscratching of cronies (e.g. land-banking due to favourable treatment of the big property co's) etc.

Take a look at supermarkets. As soon as a new competitor opens up, the local Coles and/or Woolworths drops their prices until they go bust. If they manage to hang in there they buy them out. Once a year the regulator gently spanks their bottom with a wet noodle.

[Bernard L. Madoff 14]

If people pay it they've got no reason to stop charging those prices.

Thats it in one.

Doesn't help with the cars of course. Libs will most likely get rid of the luxury tax fairly early and an audi would be nice.

Car tax doesn't add that much.

2010 Audi A6 in England $29,000AUD

http://www.autotrader.co.uk/classified/advert/201215462353125/sort/default/usedcars/maximum-age/up_to_2_years_old/maximum-mileage/up_to_20000_miles/model/a6/make/audi/page/1/postcode/sw1a1aa/radius/1501?logcode=p

Cheapest 2010 Audi A6 in Australia on car sales: $60,000

[Mr Medved 48]

2010 Audi A6 in England $29,000AUD

http://www.autotrade.../1501?logcode=p

Cheapest 2010 Audi A6 in Australia on car sales: $60,000

Merc in UK less than 100kAUD:

http://www.autotrade...erivative/51698

Merc in Australia over 200kAUD:

http://www.driveaway...es-benz.com.au/

Prices based on S class.

Breakdown for Australia from the website:

S-Class Saloon

S 350 BlueTEC SWB

Manufacturer's List Price including GST$181,569.00

Recommended maximum dealer delivery¹ including GST$3,038.46

Luxury Car Tax (LCT)$32,769.74

VIC Total Registration²$748.20

VIC Stamp Duty$10,870.00

Drive Away Price Base model featured only.$228,995.40

Or maybe you prefer one of these:

http://webcache.googleusercontent.com/search?q=cache:http://rida-holding.ru/1325.html

Edited April 19, 2012 by Mr Medved

[Easy Tiger 8]

Take a look at supermarkets. As soon as a new competitor opens up, the local Coles and/or Woolworths drops their prices until they go bust. If they manage to hang in there they buy them out. Once a year the regulator gently spanks their bottom with a wet noodle.

When the duopoly got into the fuel market with their shoppa-dockets I could clearly see where we were headed and I spoke out against it very loudly to all I knew. I warned them that they were saving a little bit of money now only to pay much more in the future. Even now, people still don’t get it and the few independent servo’s around struggle. When they fold Aussie motorists will envy how cheap fuel is in New Zealand. What astounds me most though is that the ACCC and the government refuse to see a problem. But then, that’s because I like to think that the Australian government isn’t corrupted by the interests of large corporations

[staringclown 74]

Or maybe you prefer one of these:

http://webcache.googleusercontent.com/search?q=cache:http://rida-holding.ru/1325.html

I know public servants aren't flavour of the month mate but that may be overkill.

[Bernard L. Madoff 14]

I'm not a public servant but the fuel economy would suck.

I can get a BMW 760Li in pommy land for $150K or get one here for $400K and whilst watching the stig, I'll take the pom one ($150K - same as a one year loss in a northshore property?)

For petrol heads, well worth 7 minutes...

[sydney3000 17]

How much cheaper would I have gotten my $13,990 white automatic Suzuki Alto GLX?

Edited April 21, 2012 by sydney3000