Terry McCrann: There is one huge message for business in the Budget. Do not expect a cut in the company tax rate any time soon. Like at least as long as Peter Costello is treasurer… To my mind it’s hard to argue the 30 rate is too high in international comparison terms. And it’s bordering on the obscene to argue it is too high compared with personal tax rates. BHP Billiton and the ANZ Bank get to pay the same rate as Joe and Joanna Public earning (from July) less than $80,000 a year. I’d suggest that’s more than ‘fair’ – to business, big and small. Unless a persuasive case was made that business was paddling and so investment and jobs were at risk. Take a look at the investment numbers: booming. Take a look at the jobs numbers: very strong. Take a look at business profits. And be thankful Costello doesn’t need to contemplate taking the rate back to 35. Herald Sun

Laura Tingle: This is a budget which provides the Howard government with traction to check Labor’s momentum, paste over a lot of its political vulnerabilities, but doesn’t really move it significantly ahead politically. It goads Labor to try to outspend the government, and outbid it on tax cuts, at the risk of raising questions about the opposition’s economic experience and credibility. But if the assessment of pollsters is right — that voters are grumpy and bored with the Howard government, and do not believe it has the answers to the issues of the future — there is still lots of work to do. Costello’s presentational problem in designing the budget was spending lots of money while appearing not to do so in an economically responsible way. Australian Financial Review

Jennifer Hewett: Peter Costello looked more than usually pleased with himself as he delivered his 12th budget — “rounding off the full dozen” as he described it. He may have talked incessantly about investing in the country’s future, but he knows what a solid investment this budget is in his own political future. If it works, he may – at long, long last – get to be prime minister. And he’s clearly convinced it will do the trick. The first order of business is to use the budget as a battering ram to win the next election. This means Costello was never going to make the mistake of being too parsimonious, leaving a lot of leeway for attractive Labor promises. But he also needs to blunt Kevin Rudd’s charge that the Government is just handing out election-year bribes willy-nilly. His lectern in the budget lock-up for the first time featured a carefully chosen message. “Locking in the gains, investing in the future,” it read. The theme is subtly personal as well as overtly political. The Australian

Mike Steketee: This is the budget the Government hopes will bring home the battlers… Last year’s budget delivered to the Liberal heartland. The income at which the top tax rate cut in was lifted from $95,000 to $150,000. Only six years earlier, the income threshold for the top rate had been $50,000… That left this election year to restore faith with the Howard battlers and middle-income earners, who include most of the swinging voters and who have delivered the Coalition four successive election victories. It is a political task that has become all the more urgent with the concern among many in this group about the Government’s industrial relations changes… Costello stepped in last night with his fifth successive set of tax cuts, though that record also includes the introduction of a new tax in the form of the GST. This time he pitched the cuts to lower- and middle-income earners. Because the large mass of taxpayers are in the middle-income range, tax cuts in this area quickly become very expensive. But the $16 a week for those on average earnings is at least more generous than the widely derided sandwich-and-milkshake cut of $6 a few years ago. The Australian

Jack Waterford: Peter Costello has had generous budgets over the past four years, with tax cuts and targeted handouts to parents, pensioners and others. This one is right in the mould, and, come (probably) early October, he will have even more good news, provided that voters keep the faith and return the Howard Government. Yet it has been a long time since Budget giveaways, tax cuts, or major policy announcements have given the Government much of a bounce in the opinion polls. The electorate is not only cynical – particularly around election time – but takes generous budgets for granted. Howard did not win the last two elections with generous budget handouts, or with election promises. Canberra Times

Imre Salusinszky: Apart from rendering it legal to drive down the middle of the road at about 20km/h with both indicators flashing, it is hard to think what more Peter Costello could have done in this budget to please older Australians.
In retirement communities and assisted living facilities around the nation, oldies will be abandoning one of the key beliefs of their age group – that there is much to be said on both sides of the question – and declaring of Costello’s 12th budget: “It’s all good!” The Australian

Alan Kohler: These days the operation of federal government has narrowed down to a very simple, very agreeable task: to shovel the colossal amounts of cash being removed from companies back to the grateful, blissfully ignorant souls who are responsible for buying the products that make the profits that lead to the taxes that John built. But of course they must be the right blissfully ignorant souls, politically that is. Fiscal policy in Australia has become the ultimate virtuous circle (or perhaps vicious, depending on how you look at it). Encouraged by low interest rates and high employment, we go into mountainous debt to buy houses, cars and TVs. The companies that make the products and those that dig up the raw materials for them, and the transport companies that deliver them, and the retailers that sell them, not to mention the banks that lend us the money to buy them, all make a colossal fortune and then cough up a third of it to the Government, which showers some of it back over some of us, carefully chosen. Beautiful…The key to this budget is that the Government is going to be swamped with $117 billion more in taxes over the next four years than it needs to keep operating in the manner to which it has become accustomed. The Age

Ross Gittins: I’m amazed to say that, as pre-election budgets go, this one is not bad. As you would expect, there are a lot of giveaways, but their total cost is not sufficient to put upward pressure on interest rates. And most can be justified as adding to the economy’s capacity to produce goods and services, not just adding to the economy’s demand. Such spending is thus less likely to add to inflation pressure. For once the budget has lived up to its advance billing. It is about investing in our future…most of the measures he announced last night — the extra spending on education and training, preventive health care, child-care subsidies, road and rail, and water security — will, in time, help expand the economy’s production capacity.  Sydney Morning Herald

Nicki Bourlioufas: [While] the tax cuts will initially make life easier, they will simply spur on spending. Low and middle income earners won’t be saving these cuts. Another rate rise in 2007 or 2008 would drive many housholds to the wall, especially those in the mortgage belt, who have been whipped by higher interest rates. Other big-spending measures will add to inflationary pressures. There are childcare benefits for families, as well as tax cuts. Government assistance for child care in 2007 08 will be $3 billion, nearly three times the level in 1996 97. Perhaps the real good news – and it won’t pressure interest rates – is that tax returns will be dramatically simplified, with the Australian Tax Office pre-preparing returns for taxpayers to sign off or amend. Courier-Mail

Peter Hartcher: Peter Costello has produced an election-year budget stocked with immediate cash benefits, but he has also kept in mind the Yes, Minister definition of gratitude in politics. As the battle-hardened Sir Humphrey Appleby put it, “gratitude is merely a lively expectation of favours to come”. The budget is not a one-night wonder but a four-part plan for locking in electoral gratitude over the months to come. SMH

Andrew Fraser: The Address In Reply to each year’s Budget is normally given by the Leader of the Opposition on the Thursday after the main document is presented to the nation. Peter Costello has turned that on its head in large measure, by making tonight’s speech very much a Budget-In-Reply to the various pronouncements of runaway opinion-poll leader Kevin Rudd. While such a strategy can easily be derided, it is smart politics, especially when it comes with a multitude of fresh dollops of largesse, and in some cases supercedes the Rudd promises with comprehensive, long-term black-and-white programs. Where Rudd has fanned the sparks of voter expectation, Costello has bought the Coalition a seat at the election campfire – and he’s turned up with marshmallows to roast. Canberra Times

Matt Price: The way Kevin Rudd’s been travelling lately, waltzing around the country pretending to be prime minister, it was half-expected the Labor leader would break with tradition, suspend standing orders after question-time and release his own detailed economic blueprint for Australia. Not so much budget-in-reply as Budget-in-advance. No need, Kevin. By 7.30pm the other bloke was delivering the type of budget any Labor Government would be proud of. That bloke’s name is Gough, sorry, Peter. He’s from Victoria. And if his largesse passed you by last night, you’re either an international drug trafficker or a cane toad. Wayne Swan began claiming credit for Peter Costello’s 12th budget long before it was announced – “they’re playing catch up” – and the Opposition treasury spokesman was last night consulting a copyright lawyer hoping for a share of royalties. The Australian