BobinOz’s Probably Wildly Inaccurate Australian Budget Special 2011

I say that because I didn’t watch the budget or listen to it in any shape or form. Let’s face it, they can be a bit boring.

I’ve seen quite a few in England, they are all pretty much the same. The Chancellor mentions words like million, billion, since, increased, improved, deficit and previous many, many times. As in…..

Since this government has come to power we have spent millions and billions and increased the blah 3 billion previous 2 billion improved since coming to power 7 billion reduce 3 million billion blah previous government was rubbish blah deficit

Zzzzzzzz.

After all the banter, we’d get…

  • Cigarettes up 20p packet.
  • Beer up 5p a pint.
  • Wine and spirits up 35p a bottle.
  • Petrol up and up and up.
  • Tax up.
  • VAT up.
  • Woz up!

And that’s what I thought I’d find by skimming today’s news on the Internet. But I didn’t. In fact, I didn’t find a single reference to a beer, wine, spirits, petrol, GST or anything. Perhaps Australia will put that up on another day. I’m still learning.

The Budget, 2011.

Hold on, don’t go! There is some good news for some of you hoping to move to Australia at the end of this post. Please stick with it.

Wayne Swan, our Treasurer, says his budget is about “getting back in the black, getting more people into jobs and spreading the opportunities”.
money bag
This year, Australia’s deficit is a tad under $50 billion, that’s about $8 billion more than the government estimated just six months ago.

Danged housekeepin’!

But don’t worry, the new budget is going to get Australia back into a surplus of $3.5 billion by 2012/13. Well that’s all right then. So the budget for this year is supposed to save $22 billion which, by my calculations, means that next year’s budget will need to save $31.5 billion. (That’s probably my first wildly inaccurate assumption.)

So anyone who thinks that this year’s cuts are tough, just wait till next year!

But this year’s savings will come from….

  • Deferral of infrastructure projects saving $$$$$$$$$$
  • Defence, lots of efficiency cuts saving $$$$$$
  • Reduction and deferral of funding for the Carbon Capture and Storage Flagship Programme saving $$$

Well, enough already! If you want a list of the full savings, click here. I want to talk about the Carbon Capture and Storage Flagship Programme. I think I saw what this one is all about in a programme about climate change the other day.

Here’s what I think it is.

Scientists have now found a way of freezing carbon dioxide as it comes out of the chimneys at a power plant. Once frozen, they have to then find a safe way of disposing it. They have now discovered that the best way to do this is to inject it into rock, sandstone I think they said. And that, my dear friend, will reduce the carbon footprint of power plants here in Australia and around the world to zero.

There are only two drawbacks, according to the scientists. The first is that the technology to do this won’t finally be in place until 2022 and by then they fear it will be too late. (Oops)  The second problem is that it’s likely to put the cost of power to the end user up by around 60%.

Crikey, it’s not like electricity is cheap now, is it?

Let me get this straight. This government wants to introduce a carbon tax, but it wants to save money this year by not bothering to work on its programme to reduce actual carbon dioxide emissions.

There must be a word for this kind of behaviour. Anyone?

Back to the savings…

goldTotal savings this year – (as detailed fully if you bothered to click the link above) nearly $4 billion! So only $18 billion to save over the next 3 years to hit the target then. (According to those figures, not mine, but then I don’t understand, which is why this is wildly inaccurate.) Luckily, here in Australia, there’s gold in them thar hills….. or is it down in the mines.

The Good News.

As hinted at above with the gold reference, Australia is currently enjoying a bit of a mining boom. And the government has recognised the skills shortages in this budget attached to that industry and everything around it to support it.

So they have introduced three measures.

  • A National Workforce Development Fund to train 130,000 people in key industries.
  • There will be a clamp down on getting people off welfare. Single parents, the unemployed and young people. Those claiming disability may have their incapacity re-assessed and could be asked to actively seek work before receiving any benefits.

And here’s the one you’re interested in.

  • The government will open the doors to 16,000 extra skilled migrants annually.

There, told you it was worth hanging around.

To qualify, some may have to live in regional areas, but there’s nothing wrong with regional areas. Not only that, but usually you are only tied to that area for two years, after that you are free to go where you like. All you got to do during your initial stay, is secure permanent residency (PR). Which isn’t usually that hard to do, after all, you are skilled.

So, is 16,000 extra skilled migrants annually a lot?

My research suggests it’s not really 16,000 EXTRA skilled migrants, but it’s an additional 6,000 above the previous 10,000, which, if nothing else, is a 60% increase. But then what do I know? Maybe I’m being wildly inaccurate again.

That’s it for the budget, although we do still have the carbon tax lurking in the background.

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{ 10 comments… add one }
  • chris May 21, 2011, 2:58 am | Link

    Hmm all very interesting and informative comments but what the hells all that got to do with budgies????

    • BobinOz May 23, 2011, 6:27 pm | Link

      I’m sure there was a connection somewhere…..

  • Gordon May 16, 2011, 12:07 am | Link

    It used to be said ” If America sneezes , Australia catches a cold ”

    In just a few decades , the human population on this wonderful planet is predicted to peak at about 9 Billion , about year 2050 .

    That brings about a necessary shift in economics , which has historically enjoyed growth .

    The human future must therefore , by definition , include elements of what politicians and economists call “negative growth” and so they must incorporate things like a consumption tax ( GST , VAT )
    which have been around for a while now.

    I’ve been giving quite a bit of thought to the reasoning of the carbon tax and its implementation , and I’ll admit I have not reached a conclusion yet , BUT , I do wonder if it and other longer term views are in play , behind the scenes.

    I would hope that our politicians look beyond the current election term .

    Most people don’t think of these things but the fact is , in our childrens lifetimes , a fundamental shift will , of necessity , occur .

    I had a bit of an epiphany about this as a small child , I realised then that the world had to go through at least one more major social change before it reached any sense of balance.

    I think that change is nearly here.

    After all , it doesn’t take a rocket scientist to work out that this age of rampant consumerism is unsustainable on a finite world.

    Just as a mental exercise , think of the last 50 years , project that forward to the next 500 . Bear in mind that the human population has MORE than doubled in my lifetime ( born 1955 )

    Makes you think , doesn’t it ?

    • BobinOz May 16, 2011, 9:34 pm | Link

      I would think that if America were to sneeze now, one or two countries might say “bless you”. Other than that, not much else would happen. Shows how times have changed.

      For me, thinking too far into the future, even just 20 years let alone 50 or 500 is a frightening way to pass the time in my head. I think the latest forecasts suggest that we will reach “the singularity”, that’s when computers will be as intelligent as the human brain, by 2026. When that happens we will start to live in a totally different world.

      Some scientists think it will be a fantastic new world, others believe it will be too frightening for words. And it’s only 15 years away.

      Yes, it makes you think, but I sometimes prefer not to.

  • Rupert May 14, 2011, 11:37 pm | Link

    If Chine catches a cold, it won’t be for another 20 years. Their recent status as a global player has only really just begun and history tells us that for the Chinese economy to start collapsing, the ‘West’ has to be really strong in areas such as technology, healthcare and industry – which is not the case now.

    For this reason, I don’t think China will stop buying Australian commodities – why would they? Australian commodities are far more attractive than European or American commodities at the moment, no? And Australia is nearer and cheaper. Nah, I think Australia is just fine and will be for years to come. In twenty years Europe will be a museum of ruins, castles and Renaissance art. Look at Venice! Once the commercial hub of the world – now a decaying and depressing Disneyland who’s only source of income is tourism.

    I’m convinced that Australia is really well placed for the coming decade or two (so long as the government stays away from US and British foreign policy, because that WILL slow down the deficit reduction!).

    But, as someone who’s 12 months away from landing in Sydney for an initial five-year plan, I really hope that either Sterling recovers against the Dollar or that property prices come down. The latter being the most likely – which will soften the blow of the unlikely event of the former. I doubt we will see £1=AUS$2.50 for many years to come (if ever), but property prices in Sydney are so unsustainable, that the bubble has to start blowing a leak. It will shrivel slowly and methodically just like in the UK and the US. This is not a bad thing. It is a sign that the world is waking up to the fact that a house should be a home, not an ATM or a pension.

    All said and done, life is about excitement and avoiding boredom, not about amassing wealth to spend in retirement (?). Whether rich or poor, I know that I’d rather be living in Australia than the over-crowded, polluted and aggressive country I live in right now.

    Fingers crossed for all our sakes. Fortune cookie anyone?

    • BobinOz May 16, 2011, 9:28 pm | Link

      I suspect all of us here in Australia hope you are right about China in that its economy stays strong for at least another 20 years. That means Australia can continue selling them stuff.

      But on the downside, as far as I can see all we do sell them is what we dig out of the ground. Will that last 20 years?

      And if you’ve read some of my old posts, you’ll see that I was a little cheesed off when I only got $2.26 to the pound, I was hoping for $2.50 myself. That was in November 2007, now when I look at it I realise just how lucky I was.

      As for house prices, Sydney prices are out of line and you have every chance of house prices there at least staying flat, but possibly falling slightly. But I would say to anybody coming from England, why Sydney? I wouldn’t go there unless I had to. But I would rather be there than anywhere in England 🙂

      • Rupert May 21, 2011, 11:36 am | Link

        In my line of work, it has to be Sydney I’m afraid. But, after commuting every day from Surbiton and spending my day between Soho and Shepherd’s Bush, if I find living in a nice town up in the Northern Suburbs, not too far from the beach, just too much to handle, I should consider moving to Nimbin!

        Also, Sydney remains unrepresented by the rellies. My wife is from Adeliade (where her dad is), her mum lives on the Gold Coast, her sister is in Brisbane, her cousins are in Melbourne and her brother is in Darwin. We’ve even got mates in Alice.

        Sydney looks like a great city with beautiful suburbs, and for all the moaning I hear from Aussies about how crowded and busy it is, it can’t be any worse than London. As you say – I’d rather be there than anywhere in England! Too right mate.

        • BobinOz May 23, 2011, 7:36 pm | Link

          I like your thought process, choosing a city based on its absence of relatives. Most people don’t think things through as well as that.

          I think you’ll find Sydney bit more laid back than what you were used to, so I’m sure you will cope. And another great thing about Sydney, it doesn’t have an M25 and although traffic can be bad there, it’s definitely not as bad as London.

          Not much traffic around Nimbin though, and what is there drives real slow, just in case 🙂

  • Andy Painter May 12, 2011, 8:33 pm | Link

    Bob,

    Another great article. I’m all set to join the workforce in Melbourne on 9th June 🙂 Family due later.

    Another interesting perspective on the budget found here “Australian budget implications: If China sneezes Australia will get pneumonia” – http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=126833&sn=Detail&pid=92730

    I just hope we get a bit of time in Oz before any Chinese problems start to kick in, but creating a budget on another countries economy is not really a solid plan. What about tax rises and cuts in public spending, much like the UK will be doing for the next 4 -5 years?

    All you/we need knw is a Ozzy property crash, which will come if China stops buying up the commodities!

    ….. see you soon 🙂

    • BobinOz May 13, 2011, 9:05 pm | Link

      Hi Andy

      Glad you enjoyed the article and may I be one of the first to welcome you to Australia, not long to go now.

      Interesting article, it’s no surprise that we rely heavily on China. But what is a surprise is that this government thinks it has a plan to move us into a surplus so quickly from this 50 billion deficit after missing its target by 8 billion in just the last six months.

      On that basis, let’s all hope China doesn’t catch a cold.

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