“Not another election!”

“Not another election!”

by Aurora Financial — Posted on November 27, 2019

The major parties may not have managed to get their election campaigns off to a particularly smooth start, but with both promising large fiscal expansion in their election manifestos, it is no longer a question of if, but how or where extra public spending will go.

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For 2020, this should be positive for the economy either way, but the biggest long-term benefit to growth would most likely come from investment in productive public infrastructure, such as physical infrastructure, education and vocational training.

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The uncomfortable truth is that public health spending and policing are not likely to add directly to productivity in the short-term and so would inevitably have to be paid for through higher taxes in the long-term.

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Of course these things may be a necessary public good, but their immediate effect on GDP growth is hard to quantify.

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Whatever your political alignment- ensure you have your say by registering to vote!