Australian Federal Budget 2007 May 9, 2007
Posted by Fleeced in Budget, Business, Economics, News.trackback
Well, the 2007 budget is out, and I have to say, I’m disappointed (though not surprised).
There was potential to have a massive tax reform. Instead we got a token tax cut, with commentators under the misguided notion that bigger tax cuts would cause inflation. Politically though, it was an excellent budget, with most newspapers giving glowing reports… giving bigger cuts to low income earners, and spending in enough areas to take the wind out of the ALP’s sails. And, to their credit, they didn’t squander money on the broadband (as the ALP is promising to do).
They did waste money in other areas, such as solar cell rebates, and $500 cash handouts to the aged. Blog discussions at catallaxy, ALS blog, and Club Troppo.
I wonder if I’m the only one who saw that budget as “slow and steady” in recognition that the Libs aren’t going to win the next election?
With the exception of the HEEF, the budget could almost have been called “the budget we didn’t have” because nothing really happened. As you mention, no reforms on tax or anything else (for that matter), and really only token gestures on other things.
As a result, in my eyes, it’s almost like they aimed to do nothing so that no one could whinge and complain down the track (e.g. next budget no one could say “they did this and remember how bad that was”), effectively conceding this election and setting themselves up to have a good go in the 2010 election.
The only part that I actually liked is the bit about individuals being able to submit electronic tax returns, however it makes me wonder how that would work in actuality – it means that funds, banks etc would all need to provide specific information to the ATO on a persons earnings/deductions, which for timing reasons is impractical for funds (for starters) and means that there’s going to be a whole lot of people who can’t submit their returns on 1/7 if thats when they planned to do it.
Oh, I don’t think they expect to lose, not at all…
I think it was a lame budget because it was pretty much a case of tax’n’spend. The token tax cuts don’t even cover the increased tax revenue they’ve been getting. In other words: we’re paying more tax than ever before.
Politically, it was a safe budget. Make no mistake, they’re planning to win (and I think they’ll succeed).
What kinds of things are they moaning about that they claim to be so essential that they need more of your money?
You might be right. Maybe they do think that they’re in with a chance. There are various editorials which look very positively on this budget, for instance:
http://theaustralian.news.com.au/story/0,20867,21702389-7583,00.html
However the commentary on the various news.com.au blogs is often less than flattering, and that seems to be consistent with the general moaning in the public arena. It seems that Tampa, Workchoices etc are finally starting to catch up on the Government.
As I think we’ve both said, and has been said in plenty of other places, this was an opportunity for reform which was lost. And that’s a terrible shame.
What kinds of things are they moaning about that they claim to be so essential that they need more of your money?
Lots of things, mad dog… at the moment, the big one is child care. The fact that child care is expensive is apparently unfair to women.
Of course, if the lowest tax bracket was dropped (for everybody, not just women – and I mean dropped, not just lowered), that would be a much better option that subsidising childcare.
But mainly, it’s an election year… so even though the current (conservative) treasurer seems to believe that taxing and spending is bad, he’s more than happy to betray these principles if it’s perceived to be popular to do so.
Tax revenue has been increasing because of productivity incrases (and a bit of inflation, but that’s not out of hand yet), so the amount he’s gicing back in tax cuts is actually less than the extra we’re paying.
Brett,
It’s funny, but most criticisms seem to be coming from people like me, who still see them as a better option than the ALP, and the Left, who would not have voted for the conservatives anyway.
It seems to be mostly welcomed by those centrist, middle-of-the-road, swinging voters. The best example is to look at how betting odds have change. These are better than polls, because they’re effected by where people are putting their money (giving a more reliable indicator).
I never cease to be amazed at how likely the betting arena is to pick the winner.
For the record, I’d like to see the Libs get back in. The notion of Labor holding office makes me feel ill, and the notion of the Greens/Dems holding the balance of power makes me feel even worse…
Oh, I probably should have read the budget.
“But mainly, it’s an election year… so even though the current (conservative) treasurer seems to believe that taxing and spending is bad, he’s more than happy to betray these principles if it’s perceived to be popular to do so.”
This is why I like the politicians who are more fanatical about things, who will keep their promises, no matter how much grief everyone else puts them through.