Jim Power

organizations and lobby groups that set out their feeling that yeah this is going to be a great budget we're going to get a load out of it why not there are massive surpluses being run but i would throw a lot of cold water on that suggestion because from the government's perspective i think the exchequer balance is more important because that tells us the taxation that's being collected

And at the moment, that taxation picture is strong.

Even if you strip out the so-called Apple taxes impact over the last couple of years, income tax is still growing strongly, reflecting the strong labor market VAT, which is...

Basically, a consumer spending tax in the main, it's growing quite strongly.

And corporation tax, of course, is still growing very strongly.

So the tax side of the equation is fine.

But on the other side of the coin, government spending is growing in excess of 9% year on year at the moment.

And of course, the government's concern is that if you well, I think I'm just putting myself in the shoes of government or particularly Jack Chambers.

I'm not sure about Simon Harris, but I'd say Jack Chambers is thinking at the moment, the Minister for Public Expansion Reform.

If you look at the tax take, it is very exposed to cyclical developments.

You know, if the Iranian crisis gets deeper and becomes more prolonged, that's ultimately possible.

going to impact on employment, it's going to impact on consumer spending, and that is going to put downward pressure on taxes potentially.

And at the same time, it is really difficult for any government to curb spending.

And in fact, all of the pressure is on the other side.

So I think it is going to be a really, really interesting debate here over the next few months as the budget is being framed.

And what I would have said to a

If sensible realism actually dominates the budget on October 6th, well, then you'd be doing well to maintain the status quo in terms of various tax incentives and so on.

So have I lost you?

Oh, yeah, absolutely.

The circus is already starting.