Or “the budget” as most of us may be familiar with. I touched on this in an earlier post as I have now entered the world of taking an interest in “the budget”. It really isn’t branded appropriately because what the budget aims to do is increase social cohesion, or functioning. That is, the reduction in anti social behaviour (largely crime related) and increased welfare of citizens.
I was privileged to attend the NSW budget briefing delivered by the NSW treasury secretary and what an inspiring man. Treasury have a pretty tough job – keeping millions of people happy through maintaining our living standards through effective fiscal planning! He said if he could summarise the FY15 budget in a sentence, it would be through Ross Gittins’ (SMH economics editor) remark the new Premier ‘Mike Baird is nothing if not game. His first budget as Premier is a model of fiscal rectitude.’. The >$60b tax payer funded fiscal plan takes us through to a surplus, which is ideal to maintain our strong economy.
Protecting and supporting fellow Australians
The NSW Government has said it will invest heavily in:
- Child protection “Keeping them safe reform” – which is a sound strategy as a supportive childhood often leads to increased wellbeing as an adult. Which in turn produces labour that is productive and enhances economic stability therefore leading to increased wellbeing due to sufficient living standards.
- National Disability Insurance Scheme (NDIS) – ensuring that those who are less able have greater choice as part of their care plans. This scheme also seeks to support carers in their quest to support themselves and others.
- Home owners grant extension – likely due to promote property ownership which in turn leads to greater labour productivity through motivating citizens to work to pay off their mortgage. In turn, also creating a more stable lifestyle ensuring adequate housing and a potential profit making asset when sold to downsize upon retirement, or later enter an aged care facility. The ageing population, as a result of the Baby Boomers post WWII, will put pressure on resource allocation through increased demand for aged care facilities, more health services and increases in welfare / pension distribution and reduced labour productivity.
- Payroll tax reductions – ensuring revenue can be raised from a variety of sources and that low income earners see increased take home pay as the cost of living continues to rise. In ACT for example, Land Tax is one of the greatest revenue raisers.
- Asset recycling – will play a large role in heading to surplus by, for example, outsourcing infrastructure projects to international investors. For example, the $400m Pacific Highway upgrade.
- Private investment opportunities and partnerships – It’s no secret Australia’s federal treasurer has slashed health funding from 26% of the total budget to just 13%. However it should be noted that there are greater incentives in place to keep people out of hospital and the health care system. Another example of state’s increasing revenue bases from outside sources include private investment into the new Northern Beaches hospital to be built.
- Potential for revisiting older models e.g. use of funds / source of funds. Fuel excise at 3% goes straight back into maintaining and developing road infrastructure.
The end of the mining boom
One of the stand out components of the NSW budget delivery is the huge impact reduction in demand for Australia’s natural resources that are being mined which has affected Gross National Investment (GNI). This relates to income and subsequently affects expenditure, thus reducing Gross Domestic Product (GDP) i.e. production.
In good hands
In order to maintain a strong economy based on equal parts production (supply) and consumption (demand) we need strong labour productivity. This in turn will continue to drive Australia’s largely globally envied living standards, ‘the lucky country’ and ‘the Australian way’.
Innovation in the public service is key with bureaucracy and old ways of doing things no longer feasible. In order to serve the citizens of NSW effectively public servants must embrace change and new, more efficient and innovative ways of creating best practice service delivery and “unleashing talent”. An example more recently of this has been the roll out of Service NSW branches, a one stop shop for many of your administrative needs e.g. licence, etoll, seniors card.
The NSW treasury secretary ended by saying he sees tax as needing to be fair and efficient and that effective roll out of the forecast budgeted projects requires collaboration, trust and clarity.
My take is that as long as we stay passionate about being educated, work hard, buy a property and stay healthy we will be all good! And for those of us who may be disadvantaged and unable to, those who can will support you. Any criminals who impede achievement of these ideals will be punished….
I think we are in good hands…