governments fiscal policy (1 Viewer)

[lollipoplisa7]

hi, i have an assesment analysing the govts fiscal strategy in terms on influencing domestic and external economic activity.
ive found lots of information on the budget, views and forecasts but im having trouble synthesising it all together.
can anyone help explaining what i should have in this essay and the simple theory behind this years budget cause right now im cramming everything i can into an answer which i dont think answers the question.
thank u

 

[phatic]

I'm not sure if this is simple/coherent enough, but it might help...

As a nation we spend more than we save, so our spending is financed by overseas borrowing. The interest on these loans must be repaid, but we're not saving anything, so how is it done? More borrowing. This is debt trap - it worsens the CAD in a cycle. Deteriorating CAD threatens our external stability since speculative investors might lose confidence and withdraw, causing massive currency depreciation (negative effects of this should be apparent...). See Indonesia 1990s, currency lost 90% of its value (from memory). To avoid this, the main aim of the government should be to encourage savings (i.e. compulsory superannuation) or running greater budget surpluses and repaying their debt, which creates a local pool of wealth that is an alternative to o/s funds. As to what they're actually doing...

Sorry, that didn't really answer the question either. What does it mean by external economic activity? Global factors? Perhaps trying to gain a stronger export base, stabilising and increasing the balance of goods and services in the CAD (which is volatile according to cyclical factors). But how can the budget influence this? I'm puzzled. Plus I don't know much about this year's budget. If you'd like, post up what info you've got and I might be able to help then...

 

[lollipoplisa7]

Thanks, um this is just some quick figures on this years budget:
underlying cash surplus of $8.9billion
economic growth forecast at 3%
taxcut of $21.7 billion over 4 years
tax thresholds will be reduced
superannuation surchage abolished
welfare to work scheme providing income support for those obliged to seek work
terms of trade increase forecast by 12.5%
CAD to narrow to 5.25% of gdp
unemployment to 1.75%
um, i duno if thats wat u wanted, the question is quite broad which means it covers a lot of areas. Some areas that can be addressed is the objectives of fiscal policy, long term and short term responses, external influences on ecnomy (ie int. business cycle, foreign investment, BofP, exchange rate, falling protection levels, int financial markets), policy mix, benefits and effects f major components......the list goes on.
i duno if that helped at all but i guess the main problem is trying to integrate all the facts and stuff into a response showing also my understanding of all the theories involved that we learn...if that made sense...ahhh... thanks for trying to help anyways..