Tax receipts from the first few months of the year were better than expected as were labour market conditions – and both pointed to an undershoot in borrowing this year.
Six weeks ahead of an election there was always going to be the temptation to spend, but even though the deficit is lower than expected there is still a significant hole to fill. A detailed plan on tax and spending was unlikely this close to an election.
In terms of the measures announced, the overall package was broadly neutral this year. Funding for new policies will come from a combination of asset sales, reprioritisation of existing budgets or the private sector. Some announcements were inevitably politically driven, and other may well be short lived.
Overall there was little that will substantially change the short outlook for the economy.
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> Budget 2010 - Not much to shout about... thankfully
> Industry relieved by neutral Budget