Great thanks Chelsea! I guess the only thing I’m unsure about is when it comes to structural deficit as it is said that this is expansionary in last year’s examiners report:
An explanation related to budgetary policy may have included the following points. The 2016–2017 Budget sought to strengthen Australia’s fiscal position as the economy transitions from the benefits of the past mining boom to a platform of broader-based growth. The government stood firm on its goal of achieving a return to budget surplus in the next five years with a projected decline in the size of the budget deficit. Therefore the 2016–2017 Budget was considered to be mildly contractionary given the reduction in the size of the budget deficit compared to the previous year. This is because the federal government was injecting a smaller level of funds into the economy, relative to leakages collected from taxation and other revenue sources compared to the previous year.
While the size of the budget deficit in 2017–2018 was forecast to be smaller than in 2016–2017, which would generally indicate a mildly contractionary budget stance, the size of the structural budget deficit in 2017–2018 has increased thereby indicating that the 2017–2018 Budget is predicted to have a mildly expansionary effect on the economy. The discretionary budget changes, such as the increased expenditure on infrastructure projects, are policies designed to create jobs, which increases aggregate demand and economic growth (and over time improves productive capacity and aggregate supply as well) thereby increasing the willingness and ability of businesses to supply and thus increasing economic growth and job creation.