Introduction
This column takes a long-term view in analysing the 2012 budget, which is set to see spending of $193 billion in the next fiscal year. In the Development Watch columns it is natural to focus on trends and policies that are transformative – thus making the distinction between short-term stabilisation and long-term growth. Stabilisation measures include efforts such as prudent fiscal and monetary policies. The target of these policies includes maintaining stable prices and exchange rate. Fiscal policy refers to tax and expenditure policies. When we subtract total government expenditures from total revenues we obtain either a fiscal deficit or surplus (the fiscal balance). At the core of fiscal policy is maintaining a