Howard/Costello budgets were in structural deficit

[Jovial Monk]

Plus there is reference to a Treasury paper talking about the budget structural deficit.

[Jovial Monk]

A budget can not 'appear to be in surplus'. It either is or it isn't. The reality is there is no such thing as 'structural deficit' because the conditions for a 'deficit' are simply not there if the budget is in surplus. For a deficit to occur spending needs to increase or income needs to fall. Then you have a real deficit. You can see one today with the ALP.

Answer me this Rainbow. Why were there no deficits for the last few years prior to the ALP being elected? Lefty and the Monk are afraid to answer.

Heh, the above is a plaintive plea that "Costello is the best Treasurer we ever had!" Sorry, chum, but they ain't in govt no more and their self-proclaimed title of 'good economic managers' is now seen as the threadbare tissue of propaganda it always was.

Everything I have argued here is 100% consistent with what I argued in the Sheep Pen. History is showing more and more clearly my view is close to the actual state of affairs.

[deepthought]

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[LeftofCentre]

Deepy,

the first post of mine on this thread to which you responded contains the answer you are seeking.

I'm off camping for a few days - I'll leave you to work out the answer in my post

I'm back - earlier than I was hoping - and I see you still don't understand.

Oh well

[deepthought]

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[Jovial Monk]

Like I said, just another desperate attempt to keep the old mantra alive. The world has moved on tho and the mantra no longer has any power.

[Rainbow Moonlight]

Structural deficit, from the wikipedia article would appear to be a term that refers to a budget that sets up an unsustainable future system of payments and tax cuts based on one off and boom incomes that it is not certain will continue.

However, it also refers to the more serious issue of budgets where income from sales of public assets is counted on the positive side of the budget to create a surplus falsely. Anyone can make their books balance by selling off family heirlooms and counting the money gained a sincome, but it isn't really fair or right to do so, because it isn't regular income.

Say you were getting into difficulties so you decided to sell your car. There is only so long that money could be expected to last you- when planning yoru budget you should not count it as part of your regular living income but as a one off special income amount. The problem with a budget in structural deficit is that it predicts and plans to buy the groceries using the selling of your car, and the sellign of yoru car is not endlessly repeatable but the need for groceries is.

[Jovial Monk]

Spot on, RM! That is exactly the difference between cash and structural deficits.

Most Treasurers will gild the lilly a bit but Costello believed the mining boom would go on forever and gave tax cuts based on that, then complained about Howard's spending, LOL!

[Jovial Monk]

Find any saphires, Lefty?

[deepthought]

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