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Dec 19, 2017

A budget for millionaires and multinationals, not middle Australia

The MYEFO has revealed that Turnbull doesn't want to do anything about fixing the deficit or debt, and it's going to be regular Australians who pay the price.

Jim Chalmers

Opposition spokesperson for finance

With a week to go until Christmas, Malcolm Turnbull has made it perfectly clear in his budget update that it’s big multinational businesses and millionaires who will get all the goodies, and not Australians who work and study.

The Mid-Year Economic and Fiscal Outlook (MYEFO) confirms that instead of making the right decision to rein in generous tax breaks for the top end of town, Turnbull, Scott Morrison and Mathias Cormann are once again asking the most vulnerable and those who can afford it the least to carry the can for the government’s budget failures.

The mid-year budget update is, at its core, a triple whammy of higher taxes for workers, lower taxes for the top end of town, and record and growing debt.

It also shows the Liberals still want to ditch the energy supplement for pensioners and increase the pension age to 70.

But perhaps the most damning example of the Turnbull government’s twisted priorities is the fact that they are prepared to rip away funding and support for students and universities in an attempt to fix their budget mess rather than ditch their tax breaks for the top end.

Yes, it’s elitist and out of touch. But it doesn’t make any fiscal or economic sense either.

Investing in higher education is a far more likely way to boost productivity and encourage growth than shovelling billions of dollars in the direction of foreign companies.

And when you look at the numbers in MYEFO, it makes sense why the Liberals chose to release the update when Australians are more focused on the festive season than they are on the nation’s finances.

Morrison and Cormann might have tried to talk up some modest and expected minor improvements in the numbers, but the substantial uptick in global economic conditions in recent times means they should have expected nothing less.

The fact remains that the headline numbers in this year’s MYEFO are nothing to be proud of.

The deficit for this year is eight times higher than the Liberals predicted in 2014; gross debt has crashed through half a trillion dollars and shows no signs in the MYEFO papers of peaking; and we have record net debt blowing out to new highs over the next three years.

The most troubling thing about all of this is that this fiscal mess lies squarely at the feet of Turnbull and the Grinch-like way he divides up tax breaks and tax hikes.

Turnbull’s pandering to the top end of town has left him and his Liberals incapable of fixing the budget.

They want to give multinationals and the big banks a $65 billion tax cut.

They want to cut millionaires’ tax bills by $16,400 a year.

They don’t want to do anything to make the tax system fairer by reforming trusts or stop wealthy property investors from using tax concessions they don’t need to lock first home buyers out of the housing market.

And all the while, the nation’s debt keeps growing and growing.

In fact, it’s not well known or understood that debt is actually growing faster now under Turnbull in favourable global economic conditions than it did under the former Labor government, which had a global financial crisis to deal with.

The Liberals are racking up gross debt $1.4 billion a month faster than the last Labor government did and, when it comes to net debt, $692 million a month quicker.

It’s time for Turnbull and Co to get serious about repairing the budget in a fair way.

The Liberals need to drop the tax breaks for the top end of town and adopt our sensible reforms on trusts, negative gearing and capital gains.

They need to stop pandering to the multinationals and millionaires and govern in the best interests of middle Australia.

*Jim Chalmers is Labor’s spokesperson on finance and was not paid for this article

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8 thoughts on “A budget for millionaires and multinationals, not middle Australia

  1. Alex

    I reckon it is disappointing to read a politician’s partisan, and obvious, view in Crikey when they have all the freely accessible media at their disposal. I tend to turn off when ‘experts’ have so little self confidence that they feel the need to latch onto non-words like ‘uptick’ to try to bolster their trendiness credibility. Less wank and more independent analysis I say.

    1. leon knight

      Maybe, but sadly you will never find out about the LNP’s woeful fiscal performance in the Murdoch rags, so good on Crikey for letting some truth come to the surface – hope the Guardian and New Matilda do the same.

  2. Alan L

    The so-called “debt” of a currency issuer is a chimera – an accounting fiction left over from the days of commodity-backed currency – now, no more than a myth perpetuated by Liberal small government ideology which, sadly, has been bought into suicidally by the ALP.

    We should worry about the real debt of currency users. That real debt- something that is generated in aggregate by federal surpluses, as currency is extracted from the economy and activity can only be sustained by excessive growth in private credit.

    Labor will never compete electorally with the Libs “on the economy” while it echoes their “fiscal rectitude” nonsense, burbles on about “fixing the debt”, and promises better “budget repair” – instead of consigning that idiocy to long overdue oblivion.

    1. A.Blot

      Been listening to Liberal rhetoric to long. Here is a link to change the reality

  3. klewso

    “Millionaires and multinationals”? The Limited News Party’s major sponsors/donors?
    ….. And fancy – “multinationals influencing our democratic system under this government”, in this case our tax burden? ….. So they wouldn’t be Chinese?

  4. AR

    Chalmer… hoo?
    Prove that this was not written by an ALP algorithm rather than an apparatchik… as if there were a difference.

  5. David Hardy

    Why the hell is the Government hell bent on giving a tax cut to big businesses that to the larger part do not pay any tax at all – just Liberals being idiotic . Address the real issue GET all big businesses to at least pay SOME tax in Australia to start with .
    Secondly the average punter would rather see improved Infrastructure than a meaningless Amanda Vanstone sandwich & milkshake tax cut .

    1. 124C4U

      An Amanda Vanstone sandwhich !
      That would be VERY big and probably cost a lot. That would be a worthwhile tax break.

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