According to the SMH:
Workers on a $20,000 income will save $280 a year. Those earning $120,000 will pocket an extra $2162 next year and $4252 in 2006-07.
Plus welfare cuts and punitive measures which will do little to workforce participation. And the Budget entirely squibbed on any investment in education or skills, not to mention infrastructure and fixing the labyrinthine health funding mess.
So, a downpayment on Peter Costello’s illusive trip to the Lodge? Currying business favour and the votes of the backbench high income tax cuts mob?
Faced with the choice of banking the surplus, or making a hero of himself, Costello not surprisingly opted for the latter.
It is a long time since we have seen tax cuts so blatantly targeted at the middle to upper income levels.
For the punter on average earnings it is all worth six bucks a week. Twelve fags if you like. In contrast the white collar professional earning $125,000 will get a cool $4500 a year. Not a bad down payment on those private school fees.
Coupled with $1.8 billion in tax cuts for business this is very much a budget for the big end of town. Indeed much of the budget reflects the lobbying from business groups in the run up to the budget.
Costello’s calculation is that this will be the group who will back him to the lodge. Maybe.
At least he stopped Howard from turning the Future Fund into a slush fund for the Nats.
Oh, and it’s always amusing to watch a new media meme develop - “this means Beazley’ll have to think in terms of two terms” from Michael Brissenden. Not if interest rates go up first.
Around the blogosphere: Analysis by Andrew Bartlett, wsacaucus.org and Andrew Leigh, a list of budget cliches at Cut Price Commentariat, and some justified outrage at the skewed tax cuts and the welfare bludgeon from Alex White and Mr Lefty. Flutey put himself through the torture of actually watching the speech, rather than waiting for the potted summary and analysis, and the result is some live blogging.
Update: Costello had some comfort for the low income earner on SBS news. You can’t give much of a tax cut to people who don’t pay much tax, he said. Well - you could - it’s called negative income tax. Or you could raise the threshold. Anyway, those on low incomes can comfort themselves by knowing that their tax cut is bigger in percentage terms than dollar terms. Last time I looked, this wasn’t legal tender.
Discussion question: So if you earn less than 63k a year (like most of us), what do you plan to spend your nominal dollars on (to use another Costello grab)? I, for one, would have preferred some investment in public services and infrastructure. But hey - as someone remarked, it’s a classic Liberal budget - good for the top end of town, taking a big stick to people on welfare. Note: ABS figures for May 2004 show that 75% of employees in all categories of work earn less than 50k a year.
Further update Newcopia has a link to a Parliamentary Library paper on the Future Fund.
Just so you know I am reading you and not watching television, may I ponder ‘illusion’ vs ‘eluded’, re ‘illusive’ and ‘elusive’. Being a high school dropout, unlike the many bloggers who manage to write theses for Masters degrees as well as blog, I may only ponder this.
May I also venture that you missed nothing by missing Mr Nicholas Cave.
I think I meant illusionary - not that I think about it, Brownie, I’m not at all sure that “illusive” is a word. I’ve been watching too much Big Brother, obviously.
Tax cuts, tax cuts, tax cuts, trackback, tax cuts. Blech.
I think the commentators are overdoing it by reading the Budget as “Costello’s tilt at the Lodge”. The sad thing is that I think this government are keen as mustard to offer tax cuts whenever they can, because it’s in their blood, so to speak.
Don’t get me started on the mysterious Future Fund… which seems to be something of a repository for taxpayer money where government policy should be instead.
Actually, on reflection, I think that “illusive” is quite a neat word.
It was utter cock. Shameful in its targeting. I’ve just seen Oakes go soft on him. Pathetic.
Amen to that, Brother Flutey!
Having said that, ms flute and I stand to gain a fair wedge so I’m wavering.
As an income tax payer (earning just under $20,oo a year), I would rather pay more tax and have a bulk billing doctor round the corner, a decent PBS, free public transport, reliable telephones and better funded universities than the paltry tax-cut I’m getting.
Sod the services, I can spend a shit load at Harvey Norman. More home theatreness to isolate me from the world so my brain ca Be primed by advertainment to buy more shit! A perfect cycle of effluence, the golden brown ring of spendology.
why is there a sodding yank on lateline?
A contrary view:
Try working your arse off doing three jobs to pay off a mortgage within 10 years and watch the govenment take half your pay in tax. Or try writing articles in your scant spare time and see the government pocket the same percentage. Could change your views about taxing ‘the rich’.
The group that does over half of the tax heavy lifting in Australia got almost nothing in the way of tax cuts. All the 21K-58K got was an inflation extension before they hit the next tax bracket. The tax brackets are designed to get people into the 30c in the dollar bracket quickly and then keep them there, with no relief.
The folks that do nearly the other half of the tax heavy lifting did better than the taxed majority in the 21K-58K bracket. The bottom ends of the tax brackets need to be raised; specifically . This is where bracket creep is at its worst in the taxation system.
We may as well start income tax at 21K for all the income tax the under 21K’s contribute.
On the future fund, last time Treasury did a bit of currency dealing, it didn’t turn out too well for the Smirker, as I recall. $5 billion in losses?
Some Super funds lose money some years. What if the Future Fund does? They’ll probably give its administration to nong cronies for a start.
And the boost to the sharemarket probably gives another windfall gain to the Liberal voting, champagne sculling, oyster eating, Turnbull admiring, SUV driving pinstripe elites.
I would forego any tax cuts if they fixed the friggin Calder Freeway deathtraps.
I’ll do all right out of the Libs Budget, I ususally do, but I usually think of the others that won’t.
Why bust your gut to pay your mortgage off in 10 years, it’s your choice to do that. You earn it, expect it to get taxed.
Rob, at the half you do get is being wasted at the anger management classes, they ain’t working. How about a great big hug?
Rob, working at four universities in one year left me with a significant tax debt courtesy of high marginal tax rates for second jobs.
But if the tax is taken out correctly, you should end up paying the marginal rate on the entire income at the end of the year, usually ensuring a tax rebate.
At the moment, you’d have to earn more than 70 grand a year to be in the 47c bracket for any extra income.
The ABS figures for May 2004 show that 75% of Australian employees in all categories earn less than 50k a year.
What a compendium of labels, Mark.
I, RWDB:
What complicated lives we live, to be sure.
Flutey, Rob could be an interesting candidate for Blog Big Brother though.
Rob, no need to take it personally - I never mentioned RWDBs - just a general reference to the real elites instead of the basketweaving, Labor voting, latte sipping, chardonnay drinking, VW beetle driving elites we normally hear so much about.
“…champagne sculling, oyster eating, Turnbull admiring, SUV driving pinstripe elites.”
Sounds like a barbeque at Paul Keating’s mansion.
Kerry Packer’s place, C.L., rather than PJK’s modest Elizabeth Bay digs.
Not taking it personally at all, Mark, just trying a little levity.
Recognising I’m flying into the storm here, can I just say - this:
70 gees ain’t that much these days. Most plumbers, plasterers and painters of my acquaintance earn far, far more than that - and far more than I ever will. I’m comfortable with that.
Retreats.
I’d settle for any bloody income at the moment, Rob, and I thought I was doing quite nicely when I was getting 50K. Didn’t seem to me that I was living in abject poverty. Though I guess I couldn’t afford that extra milkshake and sandwich that the new tax cuts would have given me.
70 gees ain’t that much these days.
Well, it’s all comparative isn’t it, since as I said before, ABS figures show that as of May 2004 75% of Australians in the workforce earn less than 50K. The government’s not doing much for them. Decaying infrastructure, hospital waiting lists, forking out for extra money for public schools, drop in bulk billing, etc etc.
Y’know, Mark, it’s a funny thing. You’re happy with what you’ve got, until you get more. Then you wonder how you ever managed. I was happy as a penniless student, and then I got a job and got to be happier at a higher level. And so on, and so on. My friends in private enterprise are happy at a quite stratospheric level, compared to poor old public service me.
Capitalism has us all in its vice, I guess.
Well, Rob, having given up work and gone back to being a penniless student, I’m still relatively happy!
So as to increase my happiness quotient, I’m now off to watch BB UpLate.
And flute - nice one, but not angry really - just mildly aggrieved. No anger management called for ‘at this time’, as our glorious allies are wont to say.
Yes decaying infrastructure. One minute Pete’s crapping on about a (private) port that can’t handle export demands, the next minute he’s handing down a budget that’ll encourage more imports. (Well I’m spending my tax cut on more made in Asia gadgets and another OS jaunt.)
Even 10% of the surplus would kickstart an infrastructure and energy and environmental technologies push, that would nicely position us as a player in the global long term - not to mention positioning his and other boomers’ retirements in a clean, green, well linked and energy-efficient neighbourhood.
Mental note to self: must have champage and oysters for lunch, followed by haunch of peasant with fava beans and a nice pinot grigio.
Fyodor you forgot the fffffffph.
No, Clarice, I didn’t…
Great comment from one journo on RN this morning - this budget “brings home the proscuitto”.
Great, so the futures fund investment gives the government an institutional interest in higher interest rates. I look forward to Smirker wrestling that one.
So much bullshit so close to home.
The one that really makes me laugh till I puke is the notion that port and road infrastructure (read, nasty ALP states)is the probelm with our exports & trade deficit. Try the fact that we’ve had no industry policy since 1996, and thus, have no value-added exports worth a pinch of shit. Specialising in primary commodities - now there’s a big future…
Look, I might be an idiot, (I probably am, in fact) but if the government is serious about tax relief (how I hate that term), why not raise the tax-free threshold? Double it from $6000 to $12 000, say? Can someone explain why this would be a bad thing, if tax reform is really needed? Putting my lefty head back in my shell now.
But Kate, that would benefit everyone, and we can’t have that now can we?
I think, Kate that would “reduce the incentive to work”.
We give the poor people less money so that they stop bludging You know that they’re not really disabled … just pretending because the DSP is, sorry was, such a lucrative rort.
Yeah - think of all the chardonnay and oysters you can buy on $240 a week.
Back to the topic:
Look, it’s simple. Costello reckons he’s got it in him to do a Keating. I reckon he doesn’t, but that’s not the point. The point is that if he’s gonna be Keating he’s gonna need a Kerin. Hence this budget. It’s not just about sucking up to a braindead backbench. He’s gone and lavished a fair whack of tax cuts, which will put upward pressure on interest rates. He’s matched that to a budget with nothing to say on infrastructure bottlenecks, EMTRs or the skills shortages; the very things the Reserve have identified as reasons for the rate rise. He’s added to this some very crude short-sighted measures that are nonetheless pretty much guaranteed to rev up workforce participation rates. You remember the tory whinge about how high unemployment was under Keating? That was because of turbocharged participation rates when he was treasurer. On the other hand, the Howard government has presided over a whole bunch of blokes with crook backs going onto DSP because society’s given up on them. So there’s alot of them to whack back into the workforce, not that they’re being given adequate support for it. But, without changing the numbers of jobless, or the numbers of employed, unemployment rates will go up simply because a whole whack of people are gonna be arbitrarily deemed to be in the workforce.
This gives Costello a nice little fallback position if he finds a pair and decides to challenge. Even if he loses, and there’s a fair shot of that because he’s not good at much, he’s got himself a very good story to tell the world: “Remember when I was on the team? Surpluses, low unemployment and tax cuts all round. Now look at it: Rising unemployment, rising interest rates”
If he can keep up this level of bastardry he might just get in.
Yeah, the key word last night was “bequeath”.
“why is there a sodding yank on lateline?”
Flute, I think you mean Norman Hermant. Didn’t he used to report on Iraq or something? As a wild guess maybe one of ours in the American office married him and brought him back home.
Aha. Thanks for making that clear everyone!
Sorry, Kate, I’m unclear - who was making what clear?
I was replying to your reply, and gringo’s, to my original comment. Sorry to be unclear!
Thanks for clearing that up, Kate!
I wish I could come up with some pun on the word ‘clear’ right now but I can’t…
How about the Leonard Cohen song with the line “that time I tried to go clear… did you ever go clear”?
‘Famous Blue Raincoat’ - good song.
Indeed!
I was surprised there was nothing about free trade under the rule of law in the Budget speech.