Super alarm: Don’t hike taxes, do cut spending

There is an ideological battle over the best way to shrink the Budget deficit.

Summary: Revenues did fall during the GFC but the ensuing deficit was more driven by the spending splurge that followed. Since the GFC, revenues have grown slightly below trend but spending was never reined in. Tax receipts are back to average rates but bureaucrats would like to lift the tax take back to a high rate. I argue we should instead bring spending down first given higher taxation would be harmful to growth.

Key take-out: Be prepared for the push for “reform” i.e. lifting taxes on super – the momentum is very strong.

Key beneficiaries: General investors. Category: Economics and investment strategy.


SMS Code Sent…

Hi {{ user.FirstName }}

Looks like you've already taken a free trial

Please enter your payment details

We have sent you a code via SMS to {{user.DayPhone}}

please enter this code below to activate your membership

If you didn't receive SMS code please

Looks you are already a member. Please enter your password to proceed

Please untick this box when using a public or shared device

Verify your mobile number to unlock a FREE trial

Please sign up for full access

Updating information

Please wait ...

  • Mastercard
  • Visa

Related Articles