Analysing The Australian 2002 03 Budget. Essay

632 words - 3 pages

A budget is an estimate of Commonwealth revenue and expenditure for the forthcoming fiscal year. The Budget contains information on matters such as economic forecasts, the provision of G/S, the Government's social/political priorities and how the Government intends to attain these priorities.The main objectives of the federal government are to gainfull employment of people 15-over who are willing and able to workprice stability - government attempting to maintain stable prices by controlling inflation ratesexternal balance - low current account deficiteconomic growth - increasing real GDP per capita so living standards improveThe role of a budget is to assist the government in achieving its economic objectives. The 3 possible budget outcomes are a Budget Surplus, this occurs when total level of economic activity is reduced by increasing taxes and lowering government spending. A Fiscal Policy is the use of government taxes and spending to alter macroeconomic outcomes. The contractionary fiscal policy (GT) increases the amount of money available to the population.The Government is budgeting for a $2.1 billion surplus in 2002-03 although most countries in the OECD are expected to be in deficit. Strong growth in business investment should drive overall economic growth with low interest rates, low inflation and falling unemployment.Strong economic and productivity growth is leading to the creation of new jobs, which will support continued growth in household consumption. Stronger business investment will be reflected in higher imports. With economic growth strengthening and employers becoming more confident, employment is forecast to grow. Strong and stable terms of trade has helped to increase real incomes and reduce inflationAn intergenerational report provides long-term projections for government spending and drivers of budget pressures over the next 40 yearsAustralia's population is ageing. Women are having fewer children and people are living longer. Lower birth rates are likely to result in a reduced rate of growth in...

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