Rudd wants an 18b surplus to 'fight inflation'.
I'm all for razor gangs and cutting government spending, but why is it so good that the government takes more money out of the economy than it needs? Surely a balanced budget is the way to go, in good times and bad.
They say we need to run deficits in bad times and surpluses in good, to smooth the economic cycle. I don't buy it.
I dont believe taking money out of the economy during a boom helps the boom, it stifles growth and restrains capacity. I dont believe the surpluses are being safely locked away in good times for a future government to spend on building dams when the next downturn comes stimulate the economy.
I don't accept this interventionist model. I want free markets with the govt doing less, all the time.
Most of all I want my money back!
Rudd is using inflation as an excuse not to cut tax. How on earth is he going to deliver all these tax cuts and get his surplus?
How on earth is he going to cut the public service and maintain support of the huge public sector unions?
He can't do all this. Chairman Rudd might wish he was the leader of a communist dictatorship, but he does not have the power to do this in reality.
Why on earth does he not just deliver the budget, rather than make outlandish promise months ahead of time?
I'll tell you why, because he expects alot of opposition to what he's about to do and he's trying to drill in the message of inflation first. He's expecting politcal flak from renegging on election promises like tax cuts and the so-called education revolution.
If he delivers his tax cuts, great. If he cuts the public service, great. But we will need to maintain the pressure and the scrutiny all the way to make sure this happens. He is trying to shift the public mood so that they think the and the economy are better off without tax cuts.
As another indicator of how full of shit Rudd is. A whopping surplus is the key part of Rudd's inflation right (he hopes), but he attacks Howard for fueling inflation. If budget surplus were the key to stopping inflation, then the Howard governments efforts against inflation would be the greatest any government has ever made in any country at and time. When else have so many surpluses existed in a row?
I still don't believe in surpluses. And i dont believe they are the reason why inflation is still amazingly low given our extended period of growth. The reason was the Howard Govt's economic reforms, of which IR reform was a central part. If Rudd wanted to tackle inflation for real he would leave them in place.
