So all up in percentage of GDP terms, revenue will continue to rise over the next four years from 23.0% in 2013-14 to 24.9% of GDP by 2017-18. It’s worth noting that the ALP governments never had a revenue take of more than 23.2% of GDP…
Expenditure in 2014-15 is expected to decline in real terms by 1.7%, which is among the biggest cuts in the past 40 years. But it’s worth remembering that that cut is in comparison to spending in 2013-14 – which includes the extra $11.9bn Joe Hockey spent in the Myefo – including nearly $9bn on the RBA. So that alone made reducing expenditure in this year an easier job.
Overall, it’s actually not a bad budget, and while it makes some dumb cuts, opens the gate for high fee universities in an effort to “get Australian universities in to the top 20” (like money alone solves that!) and establishes a $20bn “Medical Research Future Fund” that no-one except the pharmaceutical companies would have asked for while charging for doctor visits and lifting the costs of medicines… it’s nothing you wouldn’t have expected from a Liberal government.
If they had retained the carbon pricing scheme, I would have even said it was a respectable budget. I actually do like the fact that increased fuel excise revenue is tied to infrastructure spending, even if the bias towards roads over rail is stupid and very backwards looking. I’d even have respected Hockey more if he’d gone on the media afterwards and owned up to the fact that these were new taxes introduced – breaking a promise and then trying to spin your way out of it always seems to get things into farcical situations, rather than actually having people buy the spin.