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Wednesday, November 10, 2010

Federal Government's Budget Assumptions Leave a Black Hole in Credibility

For anyone with a memory long enough to go back to that recent extended Federal election result they might recall the fuss that was made by the ALP and two of the numbers men among the independents result.

At the time much was made about some of the savings calculations that Tony Abbott and the Liberals had made by calculating that they would save between 7 and 11 billion dollars by, in short, not wasting so much money as the prior Labor government had.

At the time the figure was bandied around as a black hole but it was only ever accounting assumptions

Well what a difference a few months make.

Yesterday we saw the Federal Government down playing its own ten billion dollar black hole in predictions trying to focus public attention on their own spin.

All the while the reality of their little splash of cash of spending somewhere around forty billion dollars on consumer items in what they called stimulus spending has now come home to roost and more Australians are realising that money should have been spend on long term capital infrastructure.

Spending on things like rail and ports ... and improvements that are desperately needed in order for exporters, like the mining sector, to export.

Why?  Exporters export and in doing so earn money for this nation, if the government (or someone) doesn't provide the export capital infrastructure then we earn less because they export less.  (As a side note that is why some large mining companies have gone ahead and built their own rail and ports, not waiting for the governments over the years to do what was needed, and they were happy to because they were earning more money by having that infrastructure there ..... so why can't the federal government see the same thing?)

   ….Now the government has to go further into debt and that will push inflation up, but they say trust us, don't look at reality look at our assumptions and predictions ….
Turn It Up...I'm Michael Robinson

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