On the Budget

Dear All,

Budget night has come and gone and some colleagues at the Institute have drawn my attention to the need for an analysis that meets the needs of the common man. Not for me the high faluting language of the Economics PhD with the J-curve hanging out of his back pocket and a glint in his eye that says he's going to go co-variant regression on your sorry ass. Or arse as the case may be.

It has indeed fallen to me to translate the rude vernacular of the dismal science into the Queen's English. And from there to translate the Queen's English into a local dialect of Farsi that is more or less user friendly to the man on the street. (Please note I am well aware of the gender discriminatory bias in my language. But let's face it, while the women retire to do the dishes it's down to the guys to break out the port and cigars. Well, at least I would but my wife controls the finances in my house and there's nothing left in the household budget for either strong liquor or carcinogens.)

It helps I think to imagine the Australian economy as a biscuit barrel. Probably a biscuit barrel that is a mite bigger than Auntie Beryl's. We can then think of the Gross Domestic Product (or GDP) as the total number of biscuits in said receptacle(or TNBSR). We can then imagine that the investment in national infrastructure is akin to buying three or four more biscuit barrels. Or at least promising to buy three or more biscuit barrels in the next twenty years or so. Though how we're going to afford to fill those extra containers is a bit beyond me as yet.

The current accounts deficit then is the difference between the number of Tim-Tams currently residing in the sweet pastry filled urn and the number we've promised to donate to the parish fete. Though if it's a deficit then it must be a negative quantity of biscuits. Or cookies if we deal in U.S. currency. If anyone can tell me the current exchange rate of Iced Vo-vos to Oriels I would be eternally grateful (though not in any legally binding or indeed financially debilitating sense). Now a negative quantity of biscuits is not an insurmountable conceptual leap if we invoke quantum mechanics, though I'll leave you to do the heavy shifting re the maths.

The Treasurer then is the local greengrocer who vends said yummy confections. The only difference is that the government minister wears a smarter cut of suit and is more likely to come round to your house and poison the azaleas if he thought there might be a dollar in it.

Hopefully this has clarified the issues. If not, send me a cheque or money order for 25 packets of Milk Arrowroot bikkies and I'll gladly come round for a cup of tea and show you my collection of Burkina Faso zinc roubles.

Thank you for your time