Monday, 9 March 2015

How the government spent our boom

In How the Budget was mugged (Treasury publishes the photo) Peter Davidson has a great graph, taken from a speech by the Treasury Secretary John Fraser, showing the impact of our unexpected revenue windfalls, spending decisions and tax cuts on the federal budget:
The following chart, included in his slides, shows how the windfall revenue gains from the boom between 2002 to 2008 (grey bars, circled by me) were spent (green, blue and red bars).

Basically much of the boom was spent on personal income tax cuts and public support for people who didn't need it (via mechanisms such as superannuation tax breaks and the Seniors Supplement).

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