The Politics    Wednesday, May 13, 2015

Kicking the can down the road

By Nick Feik

Last night’s budget does little but put problems off for another year

If last year’s budget laid out what the government wanted, but failed, to achieve, what was this?

Putting aside the rhetoric and just looking at the numbers, the second Hockey budget was that of a big-spending, big-taxing government, one content to deal with major fiscal challenges later.

“Is this what political retreat looks like?” Leigh Sales asked the treasurer, moments after his budget speech.

Government spending will reach 25.9% of GDP in the coming year, higher than any budget in the past two decades, bar one of Wayne Swan’s in 2009 (mid-GFC). For fear of angering voters, austerity is out, and stimulation in.

Hockey re-produced the now-familiar graph that shows the national books improving every year until reaching surplus in the mid to distant future, but analysts were unimpressed.

As George Megalogenis pointed out afterwards, all this budget did was delay by a year any attempt to address structural debt. The significant improvements projected for 2017 and beyond are, in any case, based on optimistic growth figures, and still include savings measures that have been rejected by the senate (cuts to health, higher education and from Family Tax Benefits).

The notable winners were small business owners – which is hardly surprising under a Liberal treasurer. The tabloid press lauded it in the best way they know how: by presenting Joe Hockey as a working man, doing physical labour. Ludicrous, I know. (Abbott tried to introduce “Tony’s tradies” into the lexicon in a press conference today – he should know that such monikers are for others to bestow.)

Hockey in his budget speech also made a big deal of cracking down on tax avoidance by multinationals (something he announces with some regularity these days), but his efforts may still come to nought: in revenue projections, there was literally not a single dollar of revenue attached to his proposals.

A lot has also been made of new childcare subsidies, which were broadly welcomed. But whatever parents gain from these changes could easily be lost in reduced parental-leave payments and Family Tax Benefits.

The government again refused to go near superannuation tax concessions, family trusts, negative gearing, or other mechanisms favoured by the wealthy.

This budget, with its many winners and few losers, looked almost like one you’d put out in an election year.


In a scandalous development related to arts funding, $104 million has been stripped from the Australia Council (our "arm’s-length” peak arts funding body) and handed directly to the Arts ministry. Minister George Brandis will have a ball.

Foreign aid has again been cut, with contributions to Indonesia almost halved. Which of course would have nothing to do with the recent execution of two Australian citizens.

The Coalition also put a tax on deliciousness, and banana-smoothy drinkers around the nation will be hit hardest.

Budget round-up:

Tim Colebatch

Ross Gittins

Peter Hartcher

Lenore Taylor

Stephen Koukoulas

Barrie Cassidy

Greg Jericho

Ian Verrender

Annabel Crabb

First Dog on the Moon

Nick Feik

Nick Feik is the editor of The Monthly.

@nickfeik

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