Wayne Swan evidently can’t win. He’s copped a shellacking from the fiscal whip wielders (among whom I confess I number) outraged the budget didn’t cut further. Alan Kohler led the charge, calling it a budget any decent CFO would be embarrassed by. Chris Richardson, famous for the really uncanny accuracy of his economic predictions, got stuck in as well, warning it would increase pressure on interest rates.
But then the Telegraph bases its entire budget coverage around the bizarre idea that Swan is “pickpocketing” the middle class, complete with confused illustration of the Treasurer as … well, it’s not clear who — maybe Fagin, maybe the Artful Dodger, maybe the banker guy from Monopoly — reaching into the pockets of an honest, unsuspecting family.
Sadly, of course, Swan didn’t even do that. Continuing the existing pause on indexation of the thresholds at which middle-class welfare cuts out isn’t even pickpocketing of money that high-income families shouldn’t be getting in the first place. That would require actually reducing the thresholds — something unlikely to happen while we have a Treasurer who, as Swan did yesterday at his lock-up press conference, supports the idea of “family payments”.
The weird logic of attacking Swan for his non-existent attack on the middle class isn’t confined to the perverse world of News Ltd columnists. It was only recently that the Sunday Age ran multiple stories on why families earning $130,000 a year “don’t feel rich” and should continue to get welfare.
Still, it’s only borrowing from our kids, who’ll have to pay higher taxes in decades to come to support an ageing population. We do that an awful lot anyway. There’s no war on the middle class in this budget. It only fiddles at the margins with our fiscal war on the taxpayers of the future.
Putting aside yet another failure of fiscal nerve, from the vantage point of the morning after, it’s clear now Swan has crafted a budget that wilfully defies the traditions of recent fiscal history, almost an anti-budget: no big surprises, no elaborate theatre, many of the spends and saves revealed in advance, aimed squarely at a solid, worthwhile but not exactly scintillating economic agenda of maximising participation. It’s a contrast even with Swan’s previous budgets, such as 2008 when big infrastructure spending was hyped as “new era of investing in Australia’s long‑term future needs”. Swan may have oversold his fiscal vigour — his $22 billion in savings includes $1.7 billion from the flood levy, hardly new and hardly a saving of any kind, but the overall pitch of the budget is aimed at such dry economic challenges as capacity constraints and maximising the use of our human capital, not exactly the glamorous stuff of budgets past, but of rather greater long-term benefit, provided its welfare reforms can actually achieve anything.
It’s a positive contrast to the hype and melodrama of budgets over the last quarter-century and of earlier versions of this Government.
As for the Coalition’s line about the absence of a carbon price scheme from the budget, Tony Abbott’s own comments give the game away. On Monday he said the carbon price would be the biggest change to the tax system since the GST (which presumably is an acknowledgement by Abbott that a carbon price will have a lower inflationary effect than the GST, but that’s another issue) and therefore should be in the budget.
So, did the Howard government include the GST in its budget forecasts after it announced it?
John Howard first announced he wanted to break his “never, ever” promise on a GST in May 1997. His cabinet endorsed his proposal to pursue tax reform in August 1997, and the government established a process to develop what became “A New Tax System”, involving consultation with business and the public.
So did the 1998 budget include forecasts for “A New Tax System”? No. You’ll look in vain for revenue forecasts relating to a GST. It wasn’t until the 1999 budget, after Treasury had costed “A New Tax System” as part of the pre-election Charter of Budget Honesty process in the 1998 election, that we saw any forecasts for the GST, two years after Howard first said he was embracing tax reform.
Still, Abbott isn’t famous for his consistency from one week to the next, let alone one decade to the next.
Yes, Labor is loosing support at the extreme left, the right and now the middle of their party.
Bernard, this article should be in all mainstream newspapers.
Its about time Abbott and co’s wild accusations, constant negativity and inconsistencies are brought into the light. Hardly any journo challenges them to explain their policies. People might not like the carbon price but they must give close scrutiny to what else you will get if Abbott and co are ever allowed to be in charge….especially policy based around his right wing catholic ideology. That’s if you can get anything out of them to scrutinise!
One can hardly take anything the Tele says as serious, surely? As for the Age article a few weeks back, well, it was quite galling really to see these families whining about how tough things are – no sympathy at all.
How can there be any surprises in the budget when most of it is ‘leaked’ and/or roadtested in advance to make sure the focus groups agree?
As a single person the Budget is a bit of a non-event for me, if you look at it purely on a personal level – all you can hope for is a little income tax cut really. If you’re not a ‘working family’ you don’t count.
Sorry I’m only replying to the headline about kids but want to say “hear, hear” and add a bit.
Simple question (in which I have no personal interest beyond that of someone who gets nothing in transfer payments, and hasn’t for decades, and doesn’t have a mortgage though I do benefit from superannuation concessions): who should be encouraged to have more children and who are likely to be deterred at the margin (or postpone having children equivalently in actuarial terms) by the cost of the mortgage going up in the areas where there are good state schools or by the lack of after tax income with which to pay school fees?
Clearly it is – 0n average and as a generality (but still most significantly and decisively) – people who are successful commercially, professionally or otherwise in occupations which test brains and determination. It is in the interests of ALL of us whether we are old, young, stupid, clever, well-educated or illiterate. The children of people who, on average, are clever, organised and determined, will be more likely than the children of those who are not to advance scientific research, invent ways of dealing with climate change, improve productivity and the methods of exploration for minerals, become church leaders, coach football teams successfully. Let’s face of it, most of us are and always have been dispensable from the point of view of most compatriots and the improvements in our lives and in civilisation always have been and still are normally the result of people who have exceptional abilities. And, let’s just repeat the key word, on average, such people will be produced in larger numbers by people who display better than average abilities in their careers.
So, why not tax my tax free pension in due course, and be a bit less generous with pensions and associated benefits for those who are quite well off? Isn’t that the kind of “middle-class welfare” which should be trimmed? And then ensure that people of child bearing age are assisted in producing the next generation of bright contributors to all of us.
Why not exchange some of the middle class welfare for tax deductions for anyone paying school fees? And isn’t it a bit odd to effectively tax young families health expenditures, however it is done, rather than take from some of the grey nomads who might have to use a slightly less luxurious campervan or put off replacing the expensive stove and oven in the sea-change retirement house?
The Dailly Terror’s budget coverage was ludicrous.
The poor little rich family from Castle Hill were most likely Liberal voters anyway. They belong to Alex Hawke. Labor didn’t need to keep them onside.