“If people are arguing there hasn’t been a strategic long-term change to our tax system, I don’t agree with them,” the Prime Minister told ABC Radio this morning.
Well, the average weekly windfall from last night will be a mighty $16. True, that’s better than Amanda Vanstone’s famous “a sandwich and a milkshake if you’re lucky” –but it’s only two sandwiches and a milkshake.
The simple fact remains it’s dead easy to run a surplus and give away goodies at budget-time when you are over-taxing the electorate.
The Budget papers spell it out very clearly. Personal income tax continues to be the Government’s largest source of revenue.
It’s likely to remain that way. There’s been a lot of talk about a boom in revenue from company tax, but this always ebbs and flows.
Hitting the punters remains the Government’s best source of revenue. Last night’s tax cuts barely give away bracket creep.
I hate to invoke Sharan Burrow in any economic argument, but it’s hard not to agree with her comments that the tax cuts are too little, too late “when we know that average-income earners will get only $14 and they are paying up to $100 extra in interest-rate increases, in petrol, in rising costs of food and services”.
Much is made, however, of John Howard’s empathy with middle Australia, and he seems to have made a remarkable observation.
He seems to have noticed just how many Australians know that playing the pokies is dumb, but keep feeding in the coins in the hope of hitting the jackpot once in a while. He’s realised that for them the magic of the moment overcomes the logic of the economics.
Come budget-time, he and his Treasurer provide bells and whistles and flashing lights.
Some lucky punters get a handful of coins — but everyone is entertained.