with David Barnett
The federal government’s 2017 Budget sets the Turnbull government on a road that could avert electoral defeat in two years’ time. The Treasurer Scott Morrison gave up on fiscal rectitude and embraced big spending.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The deficit will be down $8 billion to $29 billion, which is not worth cheering. But, it’s good big spending. Who can quarrel with more money for defence, with more money for security, or with an inland railway line linking Melbourne with Brisbane.
Who can quarrel with stiffer controls over temporary work visas, tighter citizenship tests for migrants, and a dollop of fiddling to make access to housing finance easier. Certainly not me.
Who can quarrel with higher taxes on banks, and an increase in the Medicare levy to finance the National Disability Insurance Scheme. Well, me. I do.
The argument that expenditure should be based on expenditure savings, not on higher taxes is irrefutable, but it is one in which Bill Shorten’s ALP sees no merit. The ALP and its ragbag of allies in the Senate have blocked $14 billion in expenditure reductions.
Shorten has a sneer for that. He calls the defeated savings measures ‘zombies’, the walking dead of the Carribbean’s voodoo religion, failing to mention that he killed the bills and made the zombies.
His political strategy was to sabotage the country economically in order to sabotage the coalition government politically, and a very effective strategy it has been, up until Morrison’s 2017 Budget.
Shorten’s friends were reduced to nit-picking. This or that measure didn’t go far enough. What about negative gearing? That’s when people buy a second house with a mortgage, rent it out, and claim the loss against income, thus using the taxation system to subsidise rents. Morrison wisely left it alone.
Their other point was that it amounted to an ALP budget. It was certainly cunning. It has taken the coalition a long time to discover political cunning.
Some approved because they like to see other people’s money spread around. Business liked it because it might save Australia from a Shorten government. The Budget changed the political game.