You might have noticed that every year there is a swirl of excitement for some and frustration for others over what is called ‘the budget’. Basically, since the Federal Government oversees where funding goes and what to spend that money on, they do that through an annual budget. While they can make any decisions about spending whenever they like, the budget shows us how much they’re bringing in and how much they’re spending overall as well as details on what is being funds are being spent where.
There is usually a lot of discussion around budget time about whether it is in deficit, meaning the Government needs to take on debt to cover spending over the amount taxes and investments can cover, or in surplus, meaning taxes and investments more than cover spending and there is money left over. Now while deficit can produce negative responses, it is important to remember that a government budget is vastly different to a household budget. The budget delivered by the Federal government has the unique goal of managing the entire economy and government debt itself is distinct from typical debt because governments, especially stable ones with their own currency like Australia, have strong borrowing power and handle debt differently to households.
Essentially, the need to deliver a surplus is seriously exaggerated in Australia and it distracts from what could be the priority of government spending, limiting Australia’s ability to address some of our biggest challenges like climate change, growing generational inequality, the housing crisis and more. It is true that the government cannot spend endlessly because eventually it would impact things like inflation, but it can still shift priority away from delivering a surplus and toward investments for a sustainable and fair future.
The budget also contains many small but important decisions about what the government is choosing to prioritise by outlining the allocation of funds to organisations, projects, or services, as well as any lowering or raising of particular taxes. So, while the budget can feel like an overwhelmingly dry document full of large numbers into the millions and billions, it outlines the current government’s future plans for things like climate action, education, mental health, housing and everything in between.
Stay connected to YACSA’s for more information post-budget release about what’s included in this year’s budget. If you’ve got any budget-related questions, let us know!
