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AUSTRALIA

Election budget fiddling

  • 06 May 2016

 

This budget won't produce much memorable commentary because there was little memorable about it.

When the history of May–July 2016 is written it will be forgotten and all interest will be on the 2 July election. The most memorable budget, which will define this Coalition term, came two years ago in 2014, when its first budget was a disastrous flop.

There weren't even any great surprises this time as almost all of the Budget was leaked and could be read about in the papers on the previous day. Commentators were able to draft their responses 24 hours early and didn't have to change much afterwards. It will all soon disappear into the maw of official election campaigning.

It was a political budget, of course, as all budgets are in the sense that winners and losers are often decided by political calculations. But it was political in a special sense this time given the forthcoming election. It had a special urgency.

It turned out to be neither an election-winning nor election-losing budget. It was more continuity than change. In that sense it probably was the best the government could hope for given the nation's economic and financial circumstances. However it falls far short of the sort of budget that might have been expected from a prime minister like Malcolm Turnbull whose image is one off a 'big picture man'.

It was in no way a visionary budget in that it avoided the bigger questions of taxation reform and redistribution, while continuing previously announced huge cuts in areas like foreign aid. Where it did take some steps they were cautious rather than bold ones.

Essentially the steps were fiddling, where small cuts were made in order to fund small gains for people at roughly the same socio-economic level. There was not much evidence of a coherent plan despite the promises by Treasurer Scott Morrison, who now has to sell it.

On taxation questions, like the treatment of superannuation concessions, it may have taken the edge off any possible Labor advantage in the election campaign by taking sensible steps to eliminate some of the unfair advantages to high income earners. But it avoided big questions like tackling negative gearing and capital gains taxes despite widespread popular and expert encouragement to do so.

 

"There was not much evidence of a coherent plan despite the promises by Scott Morrison, who now has to sell it."

 

This is not to deny that it is essentially