Paying the price for past mistakes

THE public was led to believe in recent weeks that Budget 2009 would be very rough and that has indeed turned out to be the case.

The element of shock in the budget was dampened by the fact that expectations had been carefully managed in the weeks leading up, but nevertheless yesterday’s offering is still very rough and will further dampen an already fragile economy in 2009.

The bottom line is that prior to yesterday’s budget there was a distinct lack of confidence in the economy amongst consumers and business people alike. The external environment is turning distinctly nasty, credit availability is virtually non-existent in the ailing domestic banking system, and the savage adjustment in the housing markets continues to worsen.