Posted by Mark the graph has a very nice collection of charts on the tax take from the Q2 national accounts.
By my figuring they are headed for a ~10bn deficit in 2012-13, and a similar deficit in 2013-14 — as they have pushed so much spending forward that they need strong revenue growth to make that year balance.
I thought of the above cartoon when i saw this story on Reuters. Our “World’s Greatest Treasurer” remains committed to his surplus:
While we have budgeted for a decline in our terms of trade, commodity spot prices have fallen more than we anticipated in May. And obviously it would be a further hit to our budget bottom line if these lower prices were sustained,” Swan said.
That will make our budget task harder. But we are absolutely commited to delivering a surplus in 2012-13.
How re-assuring…
ricardian ambivalence 
Income tax looks reasonable indeed if anything a touch better than implied budget forecasts.
I would like to add an historical note on nominal GDP growth.
Way back in 1993 a group of us in the market were perplexed why so many people thought the economy was in a hole when it clearly wasn’t.
the reason was the nominal GDP was at recession levels and people’s inflationary expectations were far too high ( We have never really thanked Bernie for keeping inflation low).
I suspect we have something similar going on now. The mythical cost of living pressures have people believing inflation is much higher than it is and we also have a low nominal GDP level.
Notice nominal GDP falls when inflation does as well.
Any ideas at all?
By the way nominal GDP wil pick up in annual terms if only because the low quarters will be disappearing
On your Marx, how you can say “mythical cost of living”…. Have a look : http://www.rba.gov.au/inflation/measures-cpi.html
[check weighted median y/y]
… and that does not include house prices and mortgage repayments.
I would say just now we are starting to have inflation finally under control after a decade of failure.
The decade of high inflation was the decade of strong nominal gdp growth due to rising export prices – and it was also the decade of low government debt due to strong revenue growth. I think they were all part of the same story. The house price story, i think, was relaxing bank regulation – that is why it happened everywhere at about the same time.
Falling export prices and tightening bank regulations could be nasty.
inflation has been falling and low for some time in fact ever since a change of government given the lag involved.
cost of living ‘pressures’ involves how much prices rise and also how much wages rise. mortgage rates are lower also.
Getting rid of NET government debt was more a result of selling off Telstra at far too higher price than due to budget surpluses built on rising revenues which we may not see again.
I would like some comment on lowish nominal GDP growth and its implications and are we now copying 1995-6 all over again?
I think maybe we are going through 96-97 again, except perhaps more radically. NGDP eventually picked up after a few rate cuts and hopefully the same will happen this time. I don’t think rising house prices over the decade starting 1997 was due to relaxing bank regulation. What regulations were relaxed? I think it was due to strong global economic growth and easier monetary policy.