The Australian Federal budget

I find it hard to be critical of a surplus budget brought down by a Leftist government. I never thought to see such a thing in my lifetime. And the fact that the surplus was partly achieved by welfare cuts is all the more amazing. And even the defence cuts did not involve any reduction in personnel numbers. And allowing for business losses to be carried backwards as well as forwards is both innovative and potentially very helpful to business. And lifting the tax-free threshold was WAY overdue.

As ever, however, there are clear negatives. A government seriously concerned for the welfare of Australians would place great priority on tackling a vicious killer that tears families apart on a daily basis: Our roads. But instead of big allocations for highway upgrades, what we got was a series of fripperies that will be at best of marginal benefit to anyone.

And the fripperies could well be counterproductive. The much touted national disability insurance scheme will undoubtedly even up disability support for people -- but in the usual way of these things, the support will be levelled downwards, not levelled up.

The fripperies were of course politically necessary as a sop for what the carbon tax will do. When the carbon tax cuts in a few weeks from now, the price impact will likely be huge -- not necessarily because of the tax itself but because any business that thinks it can get away with it will put up its prices and blame that on the carbon tax. That should filter through into the statistics and come out nicely just before the next election. What fun! (for Tony Abbott).


  1. Given that last year`s budget was forecast to be a $20something billion defecit and it turned out to be a $40+ billion defecit, there is no possibility of this tiny surplus actually happening. This is a "forecast" surplus that will only happen if spending and revenue happen as forecast - and that NEVER happens exactly. If the economy goes well and they are careful with spending, then the surplus might end up being higher (as in the howard years), but given Labour`s track record, and the stagnant economy, it`s inconceivable that will happen. Then again, Labour being what they are - are likely to defer every possible piece of spending until the following year to fake an actual surplus - just in time for next year`s election.


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