Tuesday, May 8, 2018

Today by Nick Feik

Budget 2018: expect the expected
Morrison will predict great things for the economy and spend accordingly

Image of Scott Morrison and cabinet ahead of Budget 2018


Tonight is budget night, which means that journalists, including our own Paddy Manning, are currently sequestered in the budget lockup. Why does the government continue with this anachronism? They have, after all, been leaking details of the budget for weeks.

Paddy will give you a full report in a special edition of The Monthly Today when they let him out this evening, but in the meantime, allow me to set the scene and make some rash predictions.

The treasurer will step up to the despatch box tonight intending to express all the gravity and solemnity one would expect from a leader finely tuning our economy in front of our eyes, setting the course for the nation’s future with his carefully chosen words, and inspiring us with his humility and intelligence. This being Scott Morrison, however, he will likely appear to the public rather differently. He is more likely to come across as a man trying unsuccessfully to suppress an entitled grin, having been handed company tax revenue windfalls that allow him to spray money across the electorate in the final budget before the next election, despite his party’s rhetoric over many years about the need to reduce the deficit.

There will be tax cuts of around $10 per week for low- and middle-income earners, more money for older Australians, some infrastructure funding and much more besides. In fact, it’s safe to predict that it will appear from his address that everyone in Australia is a winner!

This won’t be the case, of course, and here are some other observations to bear in mind tonight: treasurers in every recent year have predicted that growth will improve, wages will rise, total tax revenues will increase and the budget will return to surplus soon. Governments are always on the path back to surplus soon. Just not this coming year. And not enough, in the meantime, to raise social spending or foreign aid or … (the list goes on the same way most years).

As the ABC’s business editor, Ian Verrender, pointed out yesterday, the rising company tax revenues have little do with the government’s economic management. Instead, these increased revenues reflect higher global commodity prices and the fact that companies can no longer keep writing off the losses they incurred during the GFC and need to start paying more tax.

Not that any of that will stop Morrison performing the usual charade of fiscally responsible, firm-but-fair economic manager who prescribes corporate tax cuts for every occasion. Meanwhile, he will be throwing money around the electorate because an election approaches, instead of investing it or reducing the debt that is double what it was when his side of politics tore into Labor about it.

since this morning

Voters rank boosting ongoing funding for hospitals and schools and assisting job-creating industries ahead of the personal income tax cuts the Turnbull government is poised to deliver at tonight’s budget, according to the latest Guardian Essential poll.

Australia is ranked sixth in the new Lowy Institute Asia Power Index [$], which assesses power among Asia-Pacific nations. The United States just managed to stay in first place, ahead of China.

in case you missed it

The ABC reports that tonight’s federal budget is likely to forecast a return to surplus in 2019–20, a year earlier than expected, while low- and middle-income earners will receive tax cuts worth up to $10.50 a week. The Australian reports [$] that the centrepiece for baby boomers will be a multibillion-dollar aged-care and retirees package, including 20,000 new home-care places to allow older Australians to live in their homes for longer.

Liberal senator Linda Reynolds, chair of the Joint Standing Committee on Electoral Matters, has said that there is no easy fix for section 44, which is “profoundly undemocratic”, meaning that a referendum may be the only way to solve the problem.

Former prime minister Bob Hawke was admitted to a Sydney hospital last night. The ABC has been told that reports he was suffering from pneumonia or a stroke were false, and that the 88-year-old is “fine” and “just in hospital for some minor tests, nothing serious”.

The Coalition and Labor have struck a deal over the Murray-Darling Basin Plan, after Labor decided not to back a Greens’ disallowance motion in the Senate. Under the deal, the major parties will support amendments proposed by the Murray-Darling Basin Authority that will substitute water efficiency projects instead of buying back 605GL of water for the environment.

An independent panel has advised the government that there is limited or no evidence to link exposure to PFAS chemicals with human disease, but that limited links between PFAS exposure and other health effects cannot be ruled out.

The New South Wales government will conduct a review of sexual consent laws in the state after a Four Corners investigation into a high-profile sexual assault case. The NSW attorney-general says the review will determine if the law needs changing to protect survivors.

by Anne Manne
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by Jessica Au
The unusual calm of reality series ‘Terrace House’
The highly addictive Japanese show returns to Netflix for another season

Nick Feik

Nick Feik is the editor of The Monthly.



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