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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