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Betting on Animal Spirits
Budget 2019–20 is more concerned with getting private finance for investment, especially in infrastructure, rather than with finding ways to finance much needed state action to address slowing growth and welfare shortfalls. However, even that stance does not free it from the neo-liberal fiscal bind it finds itself in.
There are two aspects to a government’s budget. One is the delineation of where the government plans to get its resources from in a particular financial year or period and how it plans to spend those resources. The other is the macroeconomic frame implicit in those numbers, revealing the stance of the government with respect to driving growth and distributing its benefits. The first of these, the figures, as provided for in the budget for the year ahead, are by no means sacrosanct, being based on the government’s projections of growth and of revenue buoyancy, and on promises of how much it would spend and on what. Both projections and promises are routinely manipulated to pre-empt or deflect criticism of performance or of any implicit distributional bias.
Such window dressing, however, does have limits, since the credibility of the numbers can be judged based on trends in the recent past, especially the immediately preceding year, for which actual figures, or extrapolations based on provisional figures for most of the months are available. This makes it difficult to excessively exaggerate likely receipts or expenditures without them being discounted in the discussions that follow.
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