Journalists will be locked up for seven hours in Parliament House today to pour over Treasurer Wayne Swan’s latest budget offering, which promises to return a $1.5 billion surplus.
Check out Crikey‘s budget watch breakdown from yesterday, outlining the latest cuts and plans (and occasional sweeteners) as the government cuts $20 billion in spending.
The biggest winner in this year’s budget will be families, says Jason Murphy in The Australian Financial Review:
“The average family with two school-aged children will get payments in the budget that, with promised tax cuts, will put them about $1200 ahead, even accounting for the carbon tax.
Families are emerging as the key beneficiary of the government’s “traditional Labor” budget with money for school-aged children plus compensation for the carbon tax.
Around six in 10 taxpayers will get a tax cut of at least $300. The government has decided on a lift in the tax-free threshold from $6000 to $18,200.”
Swan’s surplus is a small mercy, says the Fin Review’s editorial:
“It is a good thing that the federal government plans to deliver a budget surplus in 2012/13. At a time when most of the developed world’s economies are perilously indebted and struggling with genuine fiscal austerity, a surplus budget sends out a powerful signal that in the midst of resources boom, Australia can run disciplined finances. Europe’s economic depression and the political extremism, social unrest and political instability that it generates highlight the dangers of governments that fail to reform their economies while racking up unsustainable debt.
Even so, the picture behind the headline surplus is not so impressive given Australia’s unique reliance on the China boom. “
But the Gillard government struggles to define who is rich and who is poor in Australia, declares Dennis Shanahan in The Australian:
“The problem Labor has experienced in recent times is deciding exactly who is rich and who is poor, who supports Labor and who doesn’t.”
The government promised to deliver a surplus and it’s determined to keep that promise even if a surplus doesn’t make economic sense, writes Tim Colebatch in The Age:
“The government has been releasing good news before the budget, to make sure it gets noticed. But the bottom line is that in 2012-13, the government will pull more than $40 billion out of Australia’s economy, either by spending less, taxing more, or both.
It doesn’t have to do that. There is no pressure from markets or voters for Australia to run a budget surplus. Money is flooding in to buy government bonds. And an Essential Research poll found just 12 per cent of us want to get the budget into surplus in 2012-13.”
This budget is based on politics, not economics, argues Terry McCrann in the Herald Sun:
“Surprisingly for a slash-and-burn Budget there are going to be a series of new handouts.
Again, the Government wants to buy votes; and it is going to pay for those votes by a combination of taking money from higher-income earners and some welfare recipients.”
Meanwhile, the Fair Work Australia investigation into the Health Services Union was released yesterday, with damning evidence against MP Craig Thomson. The investigation found that Thomson, who was booted from the Labor Party recently and now sits on the cross benches — where he holds a crucial vote for the government — misused hundreds of thousands of dollars on union funds in his former role as HSU National Secretary. The embezzled funds were then allegedly spent on election expenses, restaurants meals, hotels, flights for his wife and nearly $6000 on prostitutes.
As Tony Wright says in The Age:
While the national press gallery and a gathering of hacks from throughout the nation are locked up tight trying to pull apart Wayne Swan’s Great Austerity Budget today, the real action is likely to be taking place on the floor of the House of Representatives.
There, Julia Gillard and colleagues will be endeavouring to stare down Tony Abbott and his Merry Men and Women over a surplus of that most delicious of political stews, the sex scandal.”
The government needs Thomson’s support to pass this year’s budget, notes Geoff Kitney at the Fin Review:
“The messy business of minority government has an awful smell which will linger for as long as the Labor Party depends on Craig Thomson’s support to hang on to power.
The damage this will do will start today, with the federal budget being brought down by Treasurer Wayne Swan immediately overshadowed by the appalling details of Fair Work Australia’s findings from its investigations into Thomson’s administration of the Health Services Union.
The government needs Thomson’s vote in the parliament to pass the budget.”
Stay tuned for Crikey‘s special budget edition email tonight (only available to subscribers).