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UK to miss budget goal

Wednesday, December 03, 2014 - 02:00

Britain's finance minister says he will miss his short-term budget deficit targets but can afford tax cuts for most home-buyers. As Ivor Bennett reports that could offer some relief to voters from his austerity push before elections.

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Political theatre in action. UK Finance Minister George Osborne's Autumn Statement not just a budget update... but a chance for the government, and the Conservative Party, to get their message back on track. SOUNDBITE (English) IVOR BENNETT, REUTERS REPORTER, SAYING: "The run-up to this speech has been dominated by a drip-feed of announcements. Extra funding for flood defences, a roads revolution. The Tories have been milking their chance to set the agenda, and holding some things back for maximum impact." This year's rabbit from the hat - a tax overhaul on property purchases. Changes the chancellor says will benefit 98 percent of home-buyers. He also unveiled a so-called 'Google tax' - cracking down on corporate tax avoidance. But his main message was one Britain has heard before. (SOUNDBITE) (English) BRITISH FINANCE MINISTER, GEORGE OSBORNE, SAYING: "Out of the red and into the black for the first time in a generation - a country that inspires confidence around the world because it seeks to live within its means." The economy is seen as the Conservatives' strong suit Osborne revising the UK's growth outlook this year up to 3 percent. But the opposition says that's on the back of low-paid labour which has led to fewer tax revenues. The Chancellor has admitted he'll miss his short term targets, with the UK's deficit likely to rise above 5 percent this year. Marshall Gittler from Iron FX. SOUNDBITE (English) MARSHALL GITTLER, HEAD OF GLOBAL FX STRATEGY, IRONFX, SAYING: "I think the problem isn't on the spending side, the problem is on the revenue side, so to do this without raising taxes, it's very difficult. But a lot of research has shown that the most successful fiscal restructuring, the ones that have a lasting impact on the economy and stimulate growth rather than causing a recession are those on the spending side, where governments cut spending rather than just raise taxes to cover the hole. So I think he's got a real struggle." With barely 5 months to go until the General Election, the race to the polls is well underway.

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UK to miss budget goal

Wednesday, December 03, 2014 - 02:00