Federal Budget Analysis
Impact of the federal budget on the Australian economy
To succeed you must;
a) give a definition of the federal budget
The federal budget is delivered in may of each year by the house of representatives and is delivered in two parts: government income/receipts (what the government earns) and government expenditure/outlays (what the government spends). The correct title to the budget is the Appropriation Bill 2006/07,' it is commonly referred to as the supply bill.
The summary of the Appropriation Bill takes approximately 30 minutes to read, however the actual budget is very extensive and consists of many thousands of pages.
The Federal Budget is basically an estimate of the federal governments income and expenditure for a one year period. E.g. 2006/07. …show more content…
deficit G > T (usually but not always expansionary)
Components of the budget
2 components 1. the structural component this is the deliberate (explicit) spending and taxing decisions of the government.
2. the cyclical component this is the non-discretionary spending, taxing and spending of the budget often called automatic stabilizers.
c) list possible outcomes of the budget on the economy
There are three possible outcomes of a budget on the economy. These being
1. balanced G = T (tens to be a neutral budget on economic activity)
2. surplus T > G (can be contractionary- not always)
3. deficit G > T (usually but not always expansionary)
each type
d) the impact of the budget on the economy
The budget impacts on the economy in the following ways. A decision to lower tax rates would lead to people having more disposable income. This could influence producers to increase the price of their product and also lead to an increase in the price of a whole range of products. This rise in price is referred to as inflation and is measured by the CPI (consumer price index)
e) the direction and objectives of fiscal policy in Australia at present
Key terms and concepts which must be
To succeed you must;
a) give a definition of the federal budget
The federal budget is delivered in may of each year by the house of representatives and is delivered in two parts: government income/receipts (what the government earns) and government expenditure/outlays (what the government spends). The correct title to the budget is the Appropriation Bill 2006/07,' it is commonly referred to as the supply bill.
The summary of the Appropriation Bill takes approximately 30 minutes to read, however the actual budget is very extensive and consists of many thousands of pages.
The Federal Budget is basically an estimate of the federal governments income and expenditure for a one year period. E.g. 2006/07. …show more content…
deficit G > T (usually but not always expansionary)
Components of the budget
2 components 1. the structural component this is the deliberate (explicit) spending and taxing decisions of the government.
2. the cyclical component this is the non-discretionary spending, taxing and spending of the budget often called automatic stabilizers.
c) list possible outcomes of the budget on the economy
There are three possible outcomes of a budget on the economy. These being
1. balanced G = T (tens to be a neutral budget on economic activity)
2. surplus T > G (can be contractionary- not always)
3. deficit G > T (usually but not always expansionary)
each type
d) the impact of the budget on the economy
The budget impacts on the economy in the following ways. A decision to lower tax rates would lead to people having more disposable income. This could influence producers to increase the price of their product and also lead to an increase in the price of a whole range of products. This rise in price is referred to as inflation and is measured by the CPI (consumer price index)
e) the direction and objectives of fiscal policy in Australia at present
Key terms and concepts which must be