My budget instant reax for Crikey
I didn’t do the Budget lockup for Crikey this year, and given the Canberra cold and the slim pickings, probably a good thing. Some thoughts I gave Crikey, over the fold
The budget has been fairly successful as a political exercise in expectations management. A lot of cuts were foreshadowed but didn’t eventuate. That gave a sense of relief, and gave the government some cover to kill off a range of programs and tax expenditures which no one would seriously defend as good policy.
There was the dependent spouse offset, a relic of the days when respectable women didn’t go out to work, and was replaced years ago by Family Tax Benefit B for those with children. Showing its customary caution, the offset is being killed only for those born after 1971, so the number of people immediately affected must be tiny.
Then there’s the tax break for entrepreneurs, a Howard government initiative from which I benefited in my capacity as a columnist. I only claimed it after getting a series of letters and even (if I recall correctly) phone calls pointing out that I was eligible. I can’t imagine that those eligible for social welfare benefits are similarly encouraged to claim their full entitlements. Various other aspects of middle-class welfare (such as the Family Tax Benefit and rorts of the Low Income Tax Offset) have also been tightened.
And there’s been an attempt to rein in the long-standing rort of favourable Fringe Benefits Tax treatment for cars, partly offset by a giveway encouraging small businesses to buy new vehicles. This is targeted at the “ute owner” who seems to have displaced the “working family” in the governments affections.
The other aspect of expectations management is that we expected nothing positive and, with a handful of exceptions, that’s what we got. There’s a reasonable initiative on mental health and some modestly positive initiatives for the long-term unemployed, wrapped up in a bunch of focus-group-driven tough rhetoric.
But the Education Revolution championed by Julia Gillard before her rise to the prime ministership has been forgotten. The idea that the global financial crisis might imply a need for substantial restructuring of the economy along social democratic lines is similarly a distant memory. Overall, this is a budget that Peter Costello would have been happy to bring down.