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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Jim McMannis who wrote (50342)	1/23/2006 8:35:03 PM
From: shades	of 110194

What was that about Hoover and balanced budgets? DJ Australian Treasurer Says Budget Won't Pressure Inflation . CANBERRA (Dow Jones)--Australian Treasurer Peter Costello Tuesday said his next budget, due to be handed down on May 9, won't put pressure on inflation. "The most responsible thing to do if you want to keep inflation low and not put pressure on interest rates is to balance the budget and to add to savings through a budget surplus," Costello told ABC Radio. A government update last month said Treasurer Peter Costello will have an underlying budget surplus of A$11.5 billion in 2005-06 and a surplus of A$9.7 billion in the following year ending June 30, 2007. Costello has previously hinted his next budget may include some form of tax relief for families, and over the weekend Finance Minister Nick Minchin suggested cutting the tax on contributions to superannuation, or pension, funds, was one way of returning surpluses without putting pressure on interest rates. Costello declined to say whether he was considering Minchin's plan. "He was saying that one way of ensuring that you don't overheat the economy is encouraging savings," Costello said. "The way in which we are building savings in this country at the moment is by having the government save and if the government gets out of the business of saving at a time when individuals are borrowing and businesses are borrowing, then you won't have any of the components of saving going on in our economy and that will not be good for national saving." Handing down a budget that caused interest rates to rise would cancel any tax cuts or increased spending on services, Costello said. "The one thing this budget will do is it will ensure that Australia continues to grow and it will be poised so as not to put pressure on inflation," he said. -By Barbara Adam, Dow Jones Newswires; 61-2-6208-0901; barbara.adam@dowjones.com

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