Yesterday the US administration released their budget proposal and further details on their infrastructure plan, in a 55 page document, which mirrors and expands on the six page document already leaked to the market last month.
Although the headline figure for investment infrastructure spending is quoted as $1.5tn, the federal cost would be just $200bn which would be used to leverage and encourage private investment. However, the document does not come up with ideas of how this funding should be enacted, although President Trump has made comments regarding raising the tax on gasoline. Of the $200bn, half is for the infrastructure incentives programme which provides grants of up to 20% of a project, and a further $50bn would be used for rural projects, with the final $50bn put to work on higher risk projects and to expand existing infrastructure projects.
Now of course this is largely a political plan which is heavy on requests to meet the president’s election promises with the budget, agreed and signed last week, more critical than the administration’s proposal. In fact, the president’s plan is in contrast to last week’s agreement which lifts budget caps on military and non-military spending. We caution about drawing conclusions from the president’s proposal as congress is responsible for spending levels not the president and the document appears full of policy priorities which have no chance of becoming law.
Elsewhere, according to the World Travel and Tourism Council, for the past seven years the travel and tourism sector has outperformed the overall economy every year and contributed $7.6tn in 2016 alone. The Council predicts that over the next decade almost one in four jobs created will be related to tourism. China’s outbound tourism accounts for more than one fifth of all monies spent by global tourism, twice as much as second place US tourists. But the frightening thing is that only around 5% of the Chinese population has a passport, although the government is currently issuing 10 million new travel documents a year which is a little over 0.7% of the population per annum.
Anyone want to do a joint venture: Stratton Street Travel based in Shenzhen, a bit like Thomas Cook but without the frills idea….