We have an
$8.9 billion surplus, scope for tax cuts worth more than $20 billion
over four years, a forecast of 3% growth and unemployment at
“generational lows”. In other words, we have an economy running along
You can take the tax cuts as an admission that
parts of it – the revenue raising parts – are running too well. Ditto
the cuts for lower income earners that will kick in in a matter of
weeks. And take the welfare-to-work measures as a sign of the
Government’s determination to make sure everything keeps running well.
is a Budget for the future.” Well, yes, an aging population makes it
important that people who can and do work. But the Government hopes it
will have money for other things, too. Important things like middle
Sole parents and disability pensioners get
whacked this Budget – but not so hard that their squeals will disturb
the rest of us. “In the longer term as more people join the workforce
it will make the economy significantly stronger,” the Treasurer said
last night. Indeed. And it will also give the Government plenty of
money. A little bit more than it needs.
Since 2001 when the
Howard Government got its worst wobbles it’s been buying off key groups
with generous and well-targeted expenditure. One of these happens to be
oldies. Quite a lark with an ageing population, hey?
has worked quite well. They just pushed it too far with Medicare at the
last election. Universal health care is a little too universal, they
discovered – hence Tony Abbott’s recent discomforts and these wonderful
words in the Budget speech last night, “Mr Speaker, the Government will
also raise the Medicare Safety Net thresholds to the levels the
Government originally proposed”. Sniper rifles beat shotguns any day.
Keep the money coming in, but target where it goes. Save it up for next
We have a tax and spend government – but one that
finesses the second part of the equation in way that makes it look like
something different. The whole thing runs like a perpetual motion
machine. This year’s Budget is just a tweak, designed to get the money
coming in while leaving enough for goodies.
This year’s goodies
are tax cuts – tax cuts all round. Cutting tax has been the big agenda
item for while now and it has caused a few hiccoughs for the Government
and some embarrassment from its own side. And may it continue to do so.
The Treasurer claimed yesterday that his changes were “a very
significant structural change for Australia’s income tax system”. Pigs
arse, as another great Victorian Liberal used to say. The cuts favour
the wealthy – and nothing in the budget shows any will to genuinely
reform tax or expenditure. It’s tax and spend. Tax and spend. The
perpetual motion machine will run on – until a real estate crash,
soaring oil prices, a slowdown in China. Until something clogs the cogs.