This Years Fiscal Stance??/ (1 Viewer)

[lil_miss]

guys i dont know what it is! help me please

 

[Sparcod]

$10.8b surplus. That's slightly expansionary due to tax cuts.

 

[_ShiFTy_]

Mildy expansionary fiscal stance of 06/07 aimed to:

• Sustain economic growth to offset the risk to growth from increased interest rates, a slowdown in the housin gsector and higher world oil prices. It is also designed to be not so expansionary so as to create inflationary pressures and increase the chance of interest rates

• Increase workforce participiation by offering incentives such as the increase in the tax free threshold and changes to superannuation arrangements

• By keeping the budget in balance, the government hopes to reduce the public sector's call on private savings and lift national savings. As the government has almost paid off the Commonwealths debt (in overall terms), future budget surpluses are to be added to the Government's Future Fund and contribute to the pool of national savings

• Increased spending in priority areas such as road and rail infrastructure. The Government has also increased spending on childcare, family benefits, heath, national security and defence

Overally, in 2006/07, fiscal policy will provide mild stimulus to the Australian economy, giving support to Australia's below trend growth performance. The expansionary budget will help offset the continued weakness in the housing sector and below trend household consumption. The 2006/07 Budget will be likely to increase income equality. Althought some changes to income tax will benefit lower income earners such as the Government's proposal to increase the low income tax offset, high income earners will still receive much larger tax cuts from the changes in come and supperannuation taxes, making Australia tax system less progressive.

 

[joeyjojoshabado]

fiscal stance is basically the effect the government hopes to have on economic activity

expansionary- if it wasnts increase economic growth
contractionary- if it wants to slow down economic growth

this years budget was slightly expansionary through increased government spending and tax cuts..but not so much to overstimulate the economy leading to inflationary pressures

..basically

 

[lil_miss]

THANK YOU SOOO MUCH *mwah*

 

[Monstar]

Mild expansionary with a 10.6 bn surplus down from a 16bn increase.
Its considered midly expansionary due to the decreased levels of tax.

HEres a killer LEARN THIS PARAGRAPH (although its a bit late)

The medium term objective of fiscal strategy is to ensure the budget stays on balance, on average over the economic cycle. This will promote macroeconomic stability, entrench low debt in the public sector as well as encourage investment in a low interest rate environment. It will also shift the CAD to reflect private savings and investment decisions.