RECENT MEDIA HEADLINES have been dominated by vested political and community interests — following the Government’s May Budget.
The fact that there is screaming from so many quarters, probably means the Budget thrust is not too far off the mark.
And if you are prepared to step back for a moment and look at things unemotionally … it actually makes quite a lot of sense.
As Terry McCrann’s column in the Sunday Age (page 70) said:
“There is virtually no pain on the tax side. The income tax levy will only hit the few hundred thousand people earning more than $180,000.
The change to the fuel excise will add all of 1c to the cost of a litre of petrol, and then only over the course of the next year.”
The Wake-up Call
This came last week, when several Credit Agencies foreshadowed Australia’s AAA rating was potentially under threat.
While our growth rate isn’t startling, it currently sits at around 2.6% per annum. And our unemployment rate seems to have peaked.
So what’s the problem?
Put simply, it is the structural imbalance which will emerge over the next 5 to 10 years — as the majority of Baby Boomers move from production, to dependency.
Unfortunately, many Baby Boomers have not properly provided for their retirement. And they were expecting the government to pick up the shortfall.
The Gradual Transition
Back in the 1970s and 1980s, you witnessed the emergence of the “self-help” industry — with its numerous books and gurus, regular seminars and the like.
Nonetheless, it was initially a period of enthusiasm … as people recognised that THEY could actually better themselves.
But progressively, this enthusiasm gave way to … expectation and entitlement. And moreover, the concept of “self-help” has transformed itself into “help me”.
Bottom Line: Yes, the Budget brings with it some short-term pain, because people are suddenly losing what they considered to be “their entitlement”.
However, if Australia is to succeed as a prosperous and productive nation … we need to begin tackling these future problems, now!
That very point has now been echoed by the independent Parliamentary Budget Office. And further confirmed by the continued influx of forgein investors into our Commercial property market.