| The Australian Budget 2007 was published at 8th of May by Treasurer, Peter Costello. According to Phillip Coorey, Chief Political Correspondent from Sydney Morning Herald, the main issue of the Budget 2007 is the $70 billion in spending over four years including around $31.5 billion in tax cuts and $9 billion on education. “Could this Budget be benefit to the Australian Economy?” Heather Ridout of Australian Industry Group said “It includes a range of targeted measures that address current priorities and introduces important initiatives with the future mind.” Also, she said the tax cuts would stimulate workforce participation, and investment in education would improve training and productivity from Herald News on 9th May. In our point of view, we agree her comment and support this budget is benefit to the Australian Economy. The reasons are following:
1) The Budget mentioned that Child-care benefits will be increased by 10%. That may encourage mothers back into workforce and the employees with children may more concentrate on their work. This may lead to stimulate workforce participation or productivity.
2) The focus in university spending of the Budget can help to enlarge the university infrastructure and research facilities as well as the student number. This help to improve the workforce training and productivity.
3) From the Budget, the $32 billion tax cuts are focused on low-income earners who are most likely to respond to financial incentives by working more. That may be result of increasing productivity or planning for spending.
4) Obversely, the huge tax cut would be result of increasing money that is originally not belonging to your pocket. So, your consumption or spending might increase due to the extra money.
5) Increasing government spending would be leading the economic development. The Government will invest a further $22.3 billion in road and rail transport. Those spending help to be beneift on consumption and unemployment. Also, these infrastructure is a key for the ecomonic to develop.
From the Budget, although huge government spending might be causing problems such as the rise in inflation and interest rates, these problems would be overcome by the above benefits. On the whole, the Australian Budget 2007 is benefit to the Australian Economic development.
By MAK Chun Man Denny and YU Man Kit | |
