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Australia to become first Major Economy since start of Financial Crisis

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Australia will become the first major economy in the developed world to record a surplus since the start of the global financial crisis.

Julia Gillard, the prime minister, has pinned her political future on a “Robin Hood” budget which includes sweeping handouts worth more than £3 billion to reverse her dwindling public support.

Relying on extra revenues from mining companies, the Government has forecast a surplus of about £1 billion – the biggest budget turnaround in the country’s history, from a deficit this year of about £30 billion.

But analysts have warned that austerity measures to claw back about £11 billion in savings over the next four years could lead to the sort of widespread public anger that have plagued governments in Europe. The savings are the biggest in 24 years and include cuts of almost £4 billion from defence, slashing 3,000 public service jobs and a reduction in scheduled company tax cuts and foreign aid increases.

“Tonight we make a forceful statement that ours is one of the world’s strongest economies and fairest communities,” said Wayne Swan, the Treasurer. “The deficit years of the global recession are behind us. The surplus years are here.”

In a budget that introduces dramatic changes across all sectors of the economy, the Government proceeded with its controversial mining and carbon taxes and plans to use the revenues for massive tax cuts and pension increases.

“It’s a Labour budget to its bootstraps,” Mr Swan said.

Australia has benefited from a China-fuelled mining boom which has helped to shield it from the global downturn and kept unemployment stable at just over 5 per cent. The dollar is at record highs, inflation has been stable and interest rates are relatively low, though well above current international levels.

While the Government’s new carbon tax will bring in substantial revenue by charging a levy on big polluters, it has proven unpopular and raised widespread concerns that it will add to household bills. To compensate for the likely increase in electricity and power prices, the Government has cut taxes and flagged handouts worth £400 a year each to 1.5 million families.

Low-income families and students will receive an extra boost of about £140.

But analysts have criticised the big cash handouts as largely driven by Ms Gillard’s need to improve her shaky political position. The prime minister’s standing has become increasingly tenuous amid a series of back-flips, scandals, unpopular policy decisions and – most significantly – a non-stop run of dismal opinion poll results.

An economics commentator, Ross Gittins, said handouts were driven by politics but the austerity measures largely involved delayed spending and would not hamper the economy.

“The cash splash has no economic justification,” he said on smh.com.au. “It is a political bribe from a deeply unpopular government.”


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4 Responses to " Australia to become first Major Economy since start of Financial Crisis "

  1. Bonsai Guy says:

    Those nuclear waste landfills..

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  2. Rick Alexander says:

    Juliar Gillard is one of the most manipulative and connniving Prime Ministers this country has ever had. I need to state some facts which is impossible to publish in Australia’s media which is highly censored. Julia Gillard is a Fabian Socialist – who had her teachings from the likes of George Bernard Shaw and Karl Marx. She is completely ‘red’ (socialist) in her views and she struts around celebrating key changes in her famous red jacket. However, what the whole world needs to know is that Julia Gillard is an imposter. She is the Western worlds only un-elected female prime minister. That’s right. No one elected her. She had shafted the freely elected Kevin Rudd in a party room battle to save the labor parties sorry butt. Under the Australian Constitution she sits illegally in our Australian Parliament. If you don’t beleive me, then type in Julia Gillard Treason Charges into google search toolbar. Back in 2004 she was indicted for treason in the Victorian Supreme court by a Graham Daniels and Brian Shaw. This was based on her attempt to remove the constitutional monarch from our laws. Under the constitution, any person indicted for an offence of treason can not sit in government office. The supreme court judges in Victoria sought to seek the evidence pertaining to those treason charges, but they were reminded by Shaw in the hearings that they (the judges) would be in breach of the law and they themselves would be indicted for an offence. The law specifically states that when a treason matter comes before the courts, the judge can only notify the sheriff of the court to form a grand jury and it is the grand jury that considers the evidence. When this was pointed out to the judges in the supreme court they were enraged and deferred the matter tot he DPP (Director of Public Prosecutions). The DPP tired to sweep it under the mat. Shaw went to a court registrar who heard the complain in private, and she issued a warrant for the ‘arrest’ of the supreme court judges. Two weeks later – that Registrar was murdered. Check it out. This is factual. Now, back to Gillard. The budget she delivered through her commie Treasurer steals from the hard-working rich and gives it to those who are less fortunate. This may sound good in principle and I am not against support for those in need – but I do not support rampant handouts at the expense of our economy. She is irresponsible and she and her whole government will be thrown out on the ear when they go to the next election when we will freely elect a new Prime Minister and not have an imposter governm this great nation. She and the whole labor government have been riding on the astute governance of the previous Liberal (Conservative) government led for 11 years by Hon Prime Minister John Howard. It is John Howard and Peter Costello (the former treasurer) who deserve all the credit for our former (but now dwindling) prosperity.

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    • Nexus789 says:

      Actually mate I just think she is not very capable and rather average. Never been elected.

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    • Nexus789 says:

      Not sure what you mean by prosperity. More like created the biggest debt binge in Australia’s history. So we have public infrastructure that is crap and the highest private debt in the world.

      Let’s see how you feel when the bubble deflates and all the imaginary wealth evapourates.

      Costello and his little mate were following the idiotic mantra of the Chicago School – private debt is rational and all public debt is irrational.

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