The Australian: Costello crafts a clever budget

There will be plenty of opportunity yet for the Government to spend its way back into power. But on what was announced yesterday, this year’s budget is responsible in its use of the forecast $10.6 billion surplus, the substance and timing of income tax cuts and its provision to lock away surplus funds to secure long-term prosperity. The philosophy that underpins the Future Fund, set up to meet commonwealth public service superannuation liabilities, has been repeated in the establishment of a dedicated endowment fund for higher education. It is both good economics and clever politics. Mr Costello has met Opposition Leader Kevin Rudd’s challenge that education is the key to future prosperity. But he has done it on the Howard Government’s own terms, enshrining choice, private sector participation and reward for performance….

…There is little to acknowledge concerns about climate change, which Mr Costello calls an emerging problem. Increased rebates for high-cost photo voltaic panels on homes is small-scale and tokenistic. The research funding for the CSIRO is known and in keeping with the Government’s cautious approach. Tree planters are big winners with favourable tax treatment for trees planted for the express purpose of absorbing atmospheric carbon.

The Age: Costello provides vision beyond the pork-barrelling

…on any reading of the figures, it has balanced, well-measured investment in the country with an ample splash of electoral gifts. There has not been a war chest like it, and yesterday the Government opened the lid. In doing so, it has taken the battle up to the Opposition in one of the key areas that Kevin Rudd has championed — education. The $10 billion surplus has allowed Treasurer Peter Costello to be both Mr Responsible and Santa Claus. He has invested in the future and put money into people’s pockets almost immediately.

…Australia’s overseas military enterprises have drawn a considerable slice of GDP. Last December, the Government announced an additional $1 billion for defence and yesterday topped that up with another $2 billion. The money covers the missions to Iraq and Afghanistan, and closer to home recruiting men and women to join the forces and retain them once they enrol. The target is 57,000 full-time personnel by 2016, up from 51,000. With Australia’s growing overseas engagements, the Government had to do something to make serving the country attractive. 

The SMH: Happy marriage of clever politics and sound economics

For a pre-election budget from a government behind in the polls, Peter Costello’s 12th was surprisingly responsible… The budget’s pre-election bribes are quite barefaced, yet they are cleverly done. Low-income earners will be the chief beneficiaries of the tax cuts to start this July 1. Howard’s battlers have had their taxes cut by the largest proportion of any group since 2004-05. Mr Costello has done his best to tempt back voters who might have been thinking of voting for Kevin Rudd.

…The Future Fund, to pay for public service and military superannuation obligations, is a worthy project but one that lacks a certain electoral pizzazz. That is presumably why this year the Government has diverted $5 billion into a new Higher Education Endowment Fund (to be managed by the Future Fund administrators) which will produce income to be spent on capital works and research facilities in universities. At a stroke, the measure blunts Labor’s attack on the Government’s damaging parsimony towards higher education. It is a backdown, certainly, but a welcome one that should be commended.

The Herald Sun: Politically correct

Empowered by a $13.6 billion surplus for this financial year, Mr Costello has responded generously. But this is a responsible and, for an election year, almost sober Budget. Clearly the Government is leaving itself room to offer more in what will surely be a white-hot election campaign.

The $31.5 billion in tax cuts over the next four years and the raising of the thresholds for higher tax brackets will benefit lower and middle Australia beset by pressure from rising interest rates and other costs. There is a touch of Robin Hood about the Treasurer in this, his 12th Budget: he is funding his election year personal tax cuts out of the increased corporate tax take. Businesses won’t like it, but they don’t vote.

The Daily Telegraph: Budget builds a better history

Moving on from the broad sketch of economic health for which he took entirely reasonable credit, Mr Costello outlined a range of spending initiatives calculated to enhance the Government’s credentials for nation-building – money for education, money for families, money for transport, for defence, for older Australians, for the environment.

…And all of that – the Government can say with perfect justification – is money invested in our future, money we have to spend if we are to continue to grow our economy and sustain our place among the community of first world nations.

The Courier Mail: Roll of dice to win poll

Politically, the test is to give every player a prize while setting traps and roadblocks for your opposition. Topping that list is the Higher Education Endowment Fund, which Mr Costello has established to try to head off Kevin Rudd’s “education revolution” and stymie his ambitious broadband plan to be paid for out of the Future Fund. Like so much else in the Budget, this is a slick mix of clever politics and sensible policy. Australia has under-invested in education; and the establishment of a perpetual fund can only provide a solid base for investment in basic physical infrastructure and key facilities for research.

The Advertiser: It’s all about the economy, stupid

For a Budget designed to save the Government’s electoral skin, it is a document with plenty of appeal. When voters today ask, “What’s in it for me?” there will be very few people displeased with the answer. There are tax cuts for low and middle-income earners, one-off payments for older Australians and carers, bonuses for superannuants, child-care incentives and huge education funding. The Government clearly has responded to some key electoral imperatives with a Budget designed as a springboard to a fifth term in office.

Mr Costello has now framed a critical electoral test for the resurgent Labor Opposition, which is yet to prove its economic credentials. Mr Rudd will have to find money for bold and innovative election promises, without damaging the Budget’s popular aspects. This will be a challenge. Mr Costello’s measured and balanced Budget has put the Government on the front foot. 

Peter Fray

72 hours only. 50% off a year of Crikey and The Atlantic.

Our two-for-one offer with The Atlantic was so popular we decided to bring it back.

But only for 72 hours.

Use the promo code ATLANTIC2020 and you’ll get 50% off a year of Crikey (usually $199) and a year of digital access to The Atlantic (usually $70). That’s BOTH for just $129.

Hurry. Ends midnight this Thursday.

Peter Fray
Editor-in-chief of Crikey

Claim Now