OnPoint by Keith Ng

141

Budget 2009: “Aww, shit.” (Final Update)

It’s a simple, simple Budget. It’s only goal was bringing down the debt track. This is the scary-o-graph showing the debt track that the government was heading towards, with the alternative line showing the impact of the policy changes:

In 2011/12, the reduction in spending will be worth about as much as stopping contribution to the NZ Super Fund. By 2022/23, it’ll amount to a $9.8b reduction in spending a year.

To put it into perspective, the Super Fund contribution will be worth $2b that year, and the tax cuts that have been deferred would cost $840m.

This graph shows how much of the reduction in debt comes from this "reduction in future operating allowance" line (as a % of GDP):


Bottom line: Things are bad. Making things less bad is possible, but there are consequences. Harden up.

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