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Editors' Picks — 10th May 2015

In this week’s Editors’ Picks, we continue to monitor news surrounding the Australian budget deficit; we look at how the budget fell through, and new proposals to combat the situation. We also consider how changing the minimum wage rate may impact on employment and how to cope knowing a marketing crash is inevitable.

The state of the state

In the lead up to the November state election, Brody Viney takes a look at how the Victorian economy is tracking.

2013-14 Budget: That's a Wrap!

And it’s that time of year again – Budget 2013-14 has been released, full of figures, policies and ideological gobbledygook. Never fear, the ESSA budget wrap-up will get you across the headline data, big ticket spending items, new sources of revenue, as well as the reactions of the major stakeholders and political parties!

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Two Sides of Politics – A Fiscal Tug of War

swan hockeyWith the September Federal election looming, both Labor and the Coalition are expected to use every political weapon in their arsenal, aimed at capturing every possible vote. Undoubtedly some of the most lethal are fiscal policies offering the highest possible marginal political benefit. Already, treasurer Wayne Swan’s decision to rescind the long held promise of a budget surplus has captured headlines in almost every major print newspaper in Australia. In contrast, the Coalition remains loyal to a surplus even though the budget’s automatic stabilisers are dragging it into a deficit. Juxtaposing these two budgetary stances, it is important to ask: which of the two is the better policy?

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It’s Politics, Stupid

by Amal Varghese

SYDNEY- Before David Axelrod- one of the finest political strategists in modern American history- there was James Carville; the man who played a big hand in Bill Clinton’s rise to the White House. His greatest achievement was touted as devising the catchphrase for the campaign ‘The Economy, stupid’, which was modified after it caught on fire to ‘It’s the Economy, Stupid’. That mantra highly resonated with American voters who were gradually convinced by the Clinton campaign that George H.W Bush, despite ending the Cold war and coming out a victor in the Gulf War, was not the man who could turn the downward-spiralling economy around. The year was 1992, and in the decade that followed America grew at an average of 3.8% GDP and managed to balance its budget for the bulk of that time under Clinton. The divides that are a caricature of Washington today were present back then (though perhaps the climate was not nearly as polarized) but political leaders found a way to come together and carve a future path for growth. In the decade and a half that followed Clinton’s exit from Pennsylvania Avenue, America’s deficits have ballooned to over US$16 trillion, its growth prospects remain bleak nearly five years after the financial crisis and political paralysis has become the hallmark of Washington. But in stark contrast to the 1990s, America’s deepest problems today are rooted in politics, not economics.

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