Let’s see what actually happens:
Tonight we get the Commonwealth Federal Budget for FY15 and this is likely to be a typical
first-term Budget in that there will be wind backs, cuts and a re-prioritisation of government
spending.
While this Budget is likely to weigh on consumer confidence more than usual, given the
ending of the “age of entitlement”, investors need to be comforted that Governments and
their Budgets don't have a big impact on the economy or corporate earnings growth, which is
primarily determined by the private sector.
The best thing any government can do is put the necessary infrastructure in place to enable
entrepreneurs to do what they do best - create wealth and employment. In this way, their
sole aims should be to stabilise the debt build-up and to get rid of all unnecessary obstacles
and let the grass begin to grow again.
This is because owners of capital are always smarter than the regulators in terms of
creating wealth.