A budget to save Joe’s bacon



We’ve listened and we’ve learned.

That was the way the Treasurer explained his second attempt to shape the nation’s finances. He wasn’t admitting as much in his televised speech. No, for the audience at home he was up beat. A glass half full man here to get the nation confident and spending.

“Our economic plan is working and things are getting better,” was the recurring theme. The reality is the deficit has deepened, unemployment risen and confidence shattered.

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Last year’s budget was about saving. This year’s is all about saving the government, or more precisely himself and his Prime Minister.

Had a Labor Treasurer came up with the same big spending and deficit priming the Liberals’ outrage would have gone off the Richter scale.

This is about buying voters’ love which the Treasurer set out to achieve without embarrassment. The nation’s four million pensioners, including the 2.3 million on the aged pension are no longer in the firing line. Gone last year’s indexation change. Now the pension will be tied to cost of living or wages, whichever is higher.

Cleverly, or luckily, there is not another near-record $40 billion deficit painting a very ugly picture. A late improvement in the iron ore price and lower unemployment than forecast now has a $35.1 billion bottom line in the red. In fact this is still twice as big as he forecast last year.

This treasurer’s forecasts are in the same league as his predecessor’s. The excuse, or explanation depending on your mindset, is the same; an unforeseen revenue write down of $90 billion. In the past such revisionism was blasted as incompetence.

All of this matters of course but what matters most this year is political revival. So, the harshness of denying unemployment benefits to anyone thirty years old or younger for six months has been ditched. In its place a one month qualifying period but much more help on offer to be job ready.

The budget papers show this administration is every bit as big a spender as it’s much criticised predecessor. In fact from when the coalition took the reins spending has increased at a faster rate than in the last three Labor years.

And wait for it, revenue as a percentage of GDP keeps rising. Projected at 24 per cent this year rising to 25.2 percent in the out years. That is unless someone decides to hand back the funds coming in thanks to bracket creep.Tax cuts may be next year’s show stopper unless of course, this is the pre-election budget.

The two big items, the family package and the small business package are decidedly user-friendly. Hockey far outdoes Swan as a Father Christmas for the nation’s two million small enterprises. The instant asset write off is immediate and huge; a tax write off for all asset purchases up to $20,000

There are losers, the most baffling the clampdown on paid parental leave, but probably not enough to worry about. The whole thing does have to get through the senate. It’s success there will depend in no small part on how well the treasurer goes in selling it.

If last year is a guide it may not be enough to save his bacon.

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