Australian budget rules out further austerity

Australian treasurer Joe Hockey who vowed to balance Australian fiscal imbalance shifted strategy and declared no further austerity, which he called a strategy to boost growth and opposition called a budget to persuade voters.

Mr. Hockey said that every nation including Australia must live within its means, however taxing is not the way to prosperity.

Key highlights -

• Australia will continue to pose budget deficit for another four years in tune of 2.5% as of now, 2% in 2015-16 and 1.3% in 2016-17. Current deficit stands at A$ 41.1 billion. This means higher debt issuance by government over the next few years. Mr. Hockey projected budget deficit of A$ 17 billion for 2015-16 last year compared to A$35.1 billion today.
  
  
• Mr. Hockey announced tax cuts for small businesses and increased spending on childcare and infrastructure. Additional $3.5 billion for childcare and 1.5% point tax cut for small businesses.
  
  
• Mr. Hockey is hoping to fund these additional costs by higher levy on digital businesses such as Netflix, Google and by cutting back tax avoidance.
  
  
• Growth for 2015-16 has been downgraded to 2.75% from 3% projection in last December.

This year's budget has more of a politics driven one than what is actually required.

• Last year several of the austerity measures and savings plans were blocked in senate raising questions over Prime Minister Tony Abbott's leadership. This stands as the main reason for such populous budget. However if the budget gets blocked in senate Australia would move into new political uncertainty as Prime Minister Abbott might have to resign.

 Aussie has ignored much of the budgetary proposals, however might face brunt if country moves into political uncertainty.