Increasing Taxes is a Spending Cut?!?!?

Qld economist & member of our Board of Advisers John Humphreys summerises yesterday's mini-budget, and the media reaction:

In releasing their mini-budget yesterday, the government explained that they faced $1.9 billion of negative "parameter variations"... and given they only had a $1.5 billion surplus, then this would have put them into deficit.

In response, the government decided to increase spending by $0.4 billion. Yes... I said "increase spending".

To square the circle, they then decided to increase tax by $1.8 billion to bring them back to surplus... but in a wonderful example of Orwellian double speak, they have called them "revenue savings measures".

The Sydney Morning Herald described this as "a new round of spending cuts".

Fairfax media really is hopelessly bad...

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