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Budget 2012 expectations: No shock or awe

Thursday 24 May 2012 8:17 a.m.

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By Political Editor Duncan Garner

There is going to be no shock and awe today – it’s going to be a Budget of austerity and uncertainty.

The Government is most likely going to confirm there is a massive deficit of around $11 billion or $12 billion and they will confirm a surplus in 2014/15 –which is the political goal now rather than the economic goal.

There will be the vice tax – the tax on tobacco – and there is also the possibility that alcohol taxes may go up too.

In the so-called ‘rich man’s tax’, targeting the boat or the bach, the Government will try and close a loophole on how people write off tax.

All-in-all, this Budget will not be one that puts more money in your pocket – it is a Budget that addresses uncertainty.

Because of the crisis in Europe there is a downside scenario painted in the Budget, but with Europe melting down over the last few weeks that may not be downside enough.

The Government’s forecasts were locked and loaded before the situation in Europe escalated in the last few weeks, and today’s Budget may not give a true picture of how bad it could actually become.

Watch the video to see the full story.

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