Revenue and expenses
What is government capital expenditure (G2)?
government revenue minus expenditure
what is the budget outcome?
BP is impacted by political motivations
What is one weakness of BP?
When the government is aiming to slow down AD in the economy
What is a contractionary stance?
Tax collected by a third party and transferred to the government
What is an indirect tax?
The budget outcome excluding once-off transactions
What is the underlying cash balance / budget outcome?
BP can be specifically tailored to remedy certain issues in the economy
What is one strength of BP?
When the tax rate rises as the level of income falls
What is a regressive tax?
Causes an increase in the level of public debt
what is a budget deficit?
Average tax return of $1888 in 2024/25
What is the stage 3 tax cut policy?
Slightly expansionary due to the budget deficit of $28.3 billion
What is the stance of budgetary policy for 2024/25?
A government expense which isn't included in G1 or G2 in the AD equation
What are welfare transfer payments?
Money lent to the government by investors with an agreed return rate and time length
what is a government bond?
Working counter-cyclically to regulate the level of AD in the economy
What are automatic stabilisers?
The largest source of revenue for the government
What is personal income tax?
repaying debt accumulated from issuing government bonds
what is one way to utilise a budget surplus?
Personal income tax and government welfare transfer payments
What are 2 examples of automatic stabilisers?
Tax cuts, larger amount of government expenditure on infrastructure
What are some of the elements of an expansionary stance?