Andrew Ong Year 11 Economics Budget Research Assignment
The Federal Commonwealth 2007-08 budget was announced by Peter Costello for the 07/08 financial year on 8TH May 2007. In a period of economic growth the government will want to sustain the expansion to ensure the security of Australians in the future.
A budget is a financial plan where revenue and expenditure are planned and itemized. A budget's purpose is to have a set goal that can be achieve within a set time. Forecasting or predicting expected future events and knowing where the revenue would come from and where the revenue should be spent is important to continue cash flow.Ã¯Â¿Â½ There are two main types of budget; personal and government budgets. Personal budgets focuses on spending income on personal needs and wants of a household, the aim of a personal budget is to match income with expenditures-making ends meet. Government budgets is a summary of revenue and expenditure collected from government tax and excises and should be approve by parliament, government budgets usually have political purposes along with economic purposes.
Unlike a pure economic budget, government budgets are not fully aim to allocate its limited resources for the best economic use. Instead most government budgets have political purposes where the limited resources would be allocated to the government's special interestÃ¯Â¿Â½ eg; Bush administration funding of faith-based initiatives. Ã¯Â¿Â½
The Australian federal budget of 07/08 is a government budget. Government budgets are determined by the fiscal policy of the particular government. The two main components of a fiscal policy are the structural and the cyclical component. Structural component is where the governments spending and taxation policies show an explicit change while cyclical component is where government spending and revenue change because of changes in the economic activities according to the business cycle. The...