1. The 2012/13 Budget and the Australian Economy Moir Group May 9, 2012 John Edwards Visiting Fellow, Lowy Institute

2. The Quiet Boom

3. Australia’s wealth

4. Jobs

5. Manufacturing and mining

6. Household consumption

7. Home building

8. Investment Upswing

9. Mining investment

10. Investment by sector

11. Investment pipeline

12. Household saving

13. Gross Household Saving

14. Housing credit growth

15. Business credit growth

17. Slowdown in employment growth

18. Slower GDP growth

19. Lower inflation

20. Key Budget Measures – Carry back of up to $1m in business losses against tax paid on former profits, from July 1 Corporate tax cut shelved – Doubling super contributions tax on incomes over $300,000 – School rebates and a dental scheme for low to middle income families – Carbon tax-funded compensation – National disability insurance – Increased family benefit from July 1 2013

21. The 2012/13 Budget Returns to surplus of $1.5bn from deficit of $44.4bn, a turnaround of 3% of GDP – Revenue up 1.5% of GDP, spending down 1.6% of GDP But contractionary impact mitigated – Payments in last months of 2011/12 will be spent in 2012/13 – Some major spending cuts have little domestic impact e.g. foreign aid, defence – Some tax increases have little spending implication e.g. superannuation, corporate tax cut shelved Major revenue increase from existing tax plus MRRT, carbon tax etc. Some major program payments to begin next July 1 2013 – $1.8bn increase in Family Tax Benefits A

27. The declared strategy “Consistent with the fiscal strategy, the return to surplus is being achieved through a combination of targeted and responsible savings and allowing the natural increase in tax receipts associated with a strengthening economy to flow through to the budget.”

28. Multi factor productivity

29. Labour productivity

30. Capital productivity

31. Contribution to output growth

32. Inputs of capital, labour

35. Gross National Saving

36. Household Consumption

37. Mining output