Budget shares the burden of adjustment

ScreenHunter_152 Nov. 07 10.05

By Leith van Onselen

If there was a catchphrase from Treasurer Joe Hockey’s Budget speech last night, it was “If we all contribute” . He stated the phrase over and over during the introduction, seemingly in a bid to warm us up for the Budget cuts that followed. And to give Hockey some credit, he did at least deliver.

Few groups will be spared from this Budget – the young, the old, families, the sick and disabled, and higher income earners – will all be called upon to bear expenditure cuts and/or tax increases.

The twice yearly re-indexation of the fuel excise and the 2% deficit tax on people earning more than $180,000 per year were implemented as flagged during the lead-up to Budget night, with the excise lift sweetened by a promise to hypothecate all funds raised to new road funding. This is no tax grab, according to the Government, but rather an investment in nation building. High income earners are also placated somewhat by the three year sunset clause placed on the deficit levy.

In a gutsy move, the Government has also placed Aged Pension reform on the table, more or less adopting some of the recommendations from the Commission of Audit.

From September 2017, increases in pensions will be linked twice a year to inflation, rather than male wages as is currently the case for the Aged Pension. Asset and associated income test thresholds will also be indexed for three years from 2017, whereas the age of eligibility for the Aged Pension will be raised to 70 by 2035. Importantly, untaxed superannuation will also be included in the income test for new recipients of the Commonwealth Seniors Health Card, and the annual Seniors Supplement will be abolished from 1 July this year.

These are sensible measures that should not only improve equity vis-a-vis other welfare recipients, but also help to contain a fast growing area of Budget expenditure. They also take courage politically, given the large and powerful grey vote.

Families will also see their benefits pared-back. As widely flagged during the pre-Budget build-up, the Family Tax Benefit Part B income threshold will be reduced to $100,000 (from $150,000), and will no longer be available when a family’s youngest child turns six and is at school. Whereas for families receiving the base rate of Family Tax Benefit Part A, payments will start to reduce when family income exceeds $94,316 per year.

Young Australians aged under 30 will be hit particularly hard under this Budget, with the Government pursuing its “earning or learning” initiatives.

Starting next year, unemployed Australians aged under 25 will receive the lower Youth Allowance, not Newstart. People aged under the age of 30 will also have to wait up to six months before getting unemployment benefits, and then will have to participate in Work for the Dole, in order to be eligible for income support.

By contrast, older unemployed recipients will receive extra help to find a job, with the Government to provide a payment of up to $10,000 to a business that employs an Australian over the age of 50 who has been on unemployment benefits or the Disability Support Pension for six months. That said, older workers will lose the mature age worker tax offset, worth $760m over four years.

Those attending universities will be charged a higher interest rate on their HELP debts, raising $3.2 billion over five years, with repayments kicking in at a lower threshold of $50,000 per year. University fees will also be deregulated and funding cut by $1.2 billion over three years, which will likely lead to increases in fees charged.

By contrast, trade apprentices will benefit from concessional interest loans (similar to HELP) of up to $20,000, but will lose a subsidy for tools.

And everyone will pay more to see a doctor, with the Government proceeding with its planned $7 payment for GP visits, with all funds raised to be hypothecated into a Medical Research Future Fund until its pool reaches $20 billion.

The foreign aid budget will also be cut by $7.6 billion – although I doubt few will notice or care.

The Budget also explicitly acknowledges the expected unwinding of the once-in-a-century mining investment boom, and the deleterious impact that it will have on employment. To see Australia through this challenge, the Government announced an $11.6 billion infrastructure growth package, which aims to boost total investment (both public and private) to $125 billion by 2020 – although as always it is unclear how much is actually new funding.

Finally, the Government seems intent to genuinely tackle duplication across federal and state governments – an admirable goal – and plans to work with State and Territory Governments to reduce overlap. It also announced the abolishment of some 230 bureaucratic programs and 70 government bodies – moves that will ultimately see 16,500 public servants lose their jobs, but supposedly “without compromising frontline services”.

The give the Government some credit, it has at least delivered on its promise to “share the burden” of adjustment, with virtually all segments of society sharing the pain.

That said, opponents will argue that too much is coming out of health and welfare budgets, which are responsible for 88% ($25.8 billion) of the $30 billion of the government spending cuts over four years, with the young, disabled and families bearing the most of the pain. There were also no cuts to egregious tax lurks like superannuation concessions for higher income earners and negative gearing; although hopefully these will be addressed in the Government’s upcoming taxation review.

As mentioned earlier, a big plus from this Budget is that the Government has not shied away from the need for long-term reform of the Aged Pension, and has implemented sensible measures starting after the next election. It is a particularly gutsy move in light of the large and vocal grey vote, which could savage the Government at the polls.

While not perfect, and arguably a bit too regressive, this Budget has succeeded in placing the Budget on the path to long-term structural reform, without smashing the economy in the process.

[email protected]

www.twitter.com/leithvo

Comments

  1. Cutting funding on tertiary education is only going to further erode our ability to compete – especially if we are to continue to evolve towards a ‘service economy’. I guess we’ll just continue to import mature-aged labour and let the youth unemployment creep up some more.

  2. Few groups will be spared from this Budget

    Except:

    – Mining companies
    – Big polluters
    – Wealthy self-funded retirees
    – High income earners approaching retirement
    – Property investors
    – Sharemarket investors
    – The military
    – High income earners who salary package

    • GunnamattaMEMBER

      That comes back to the one thing the budget lacked – vision.

      Spreading the pain around the way they have means the Tories will be able to plausibly say they have shared it. But only for those who dont think about things terribly much and get their call from the MSM. And I see nothing in the budget which would suggest to me that Australia’s economy is en route a decent outcome for my kid

      • Billybob McBob

        +1
        Vision is definitely lacking on all sides, that’s the major issue we face IMHO.

        I also find the ‘spread the pain around’ notion a great example of anchoring bias. We’re implicitly assuming that things were fair before the pain was spread when justifying this notion. So we just talk about the increment, rather than dealing with the whole picture. I’m certainly not convinced our system of tax/spend was fair before, so ‘spreading the pain’ is inherently unfair to those that were already less able. Of course that also assumes the pain is fairly spread, which it clearly is not…

      • Lorax, don’t forget the ballerinas in your list of winners.

        They’re getting $1 million for boarding accommodation (and boy/girl? would I like to know the story behind that one – perhaps a senior minister’s daughter?)

        Edit: And how could I forget the $250 million for school chaplains?

      • migtronixMEMBER

        @AB And how could I forget the $250 million for school chaplains?

        That’s right with a Catholic in charge even the pedophiles get a boost.

      • Oh come on Mig. Look they’ve balanced it out by winding back funding for CSIRO. I mean what have they ever done for advancing other than small things like Wi-Fi and others. Science? Pffft..

      • This budget is rubbish.

        Social incomes are cut and taxes increased in order to finance the repeal of the carbon pricing mechanism and the introduction of PPL. Overall spending is basically unchanged but the direction changes to mollify Tory hatreds of the unemployed and the ill.

        Some lament the lack of vision. This is false. There is a very clear vision: it’s full ahead to the 1920’s – to the days before the Curtin/Chifley social settlement.

        Rather than using the budget to support incomes, investment and jobs, they have gambled everything on Chinese and Australian property. The budget is already out of date from that perspective and the result will be another LNP policy failure – rising unemployment and collapsing fiscal balance.

        Hopefully the Senate will reject the whole lot.

      • migtronixMEMBER

        Disagree! It was a pathetic pitch at the over 40s – stick with us and the boomers we’ll make sure you’re OK. No wonder you liked it…

      • From September 2017, increases in pensions will be linked twice a year to inflation, rather than male wages as is currently the case for the Aged Pension.

        I am not sure if this is real reform… With the end of the mining boom, wage growth is likely to slow down, while private debt will have to rise (see Steve Keen’s budget article on BS) and RBA will “look through” any rise in inflation rate. Voilà, we have a pension increase by stealth and no budget savings at all.

      • “I am not sure if this is real reform…”

        Everyone else loses money. The oldies just get smaller increases in their payments.

      • migtronixMEMBER

        @AB The oldies just get smaller increases in their payments.

        Sure but thanks to company tax cut they’ll get bigger dividends.

      • migtronixMEMBER

        IP rentseekimg, nice. Gardasil who’s profits come from government funded projects. Nice again. Maybe just maybe if we looked to environmental causes of cancer… But where’s the profits in that?

      • dumb_non_economist

        UE,

        You couldn’t have been expecting much is all I can say!

        Pension Reform: What, of those who only get the pension? Are they tightening up the rorting of part pensions by those not in need?

        Sharing the Pain: You’re kidding, right? The 2% wealth tax is for 3 yrs, all the rest is permanent.

        Screw the youth, make them pay more for their education and when they can’t get work cut their UE payment while giving a subsidy to older workers. Super rorts continue, retirement age for boomers unchanged and then make the young work to 70 after funding the boomers retirement.

        Co-Payment: Well, unless you’re bulk billed you ALREADY make a co-payment of around $24.

        What’s there not to like?

    • migtronixMEMBER

      Precisely 3d has been all “get in the big tent and share the pain, the water is warm! Leave the petty coat at the gate” lately – I just knew that BS was code for something.

    • First Home Savers Account will stop getting government co-contribution…i.e. no prior notice given to the poor buggers before their deposits are locked up without any incentives for 4 years.

      So add first home mega mortgage mugs who never bothered to save a deposit to that list of winners.

    • casewithscience

      You missed the one group that is actually deserving – medical research.

      The fact is that Australian private investors just don’t spend money on research and our future economy is suffering because of it. The boost to medical research through a future fund is a very good move for Australia.

      • migtronixMEMBER

        Bwaahaahaa our future economy is hurting, what about our present economy?

        How is research into keeping unproductive boomers around longer at everyone else’s expense a benefit to our “future economy”? Maybe it’s because you can smell the patent claim money rolling in

      • 20 bill medical research ? 20 Bil for Libs mates who run pharma companies more like ..

      • casewithscience

        As I said elsewhere, this money is not going to pharma.

        The fact is that I would prefer that we produce a Gardisil (the vaccine against HPV and consequent cervical cancer) than digging a pit in the ground and sending our resources overseas. They cost about the same.

        This is not about patent licence fees or anything of that nature. I could make far more by going in-house at a mining company and tricking farmers out of their land. Money is not the point here. It is about what we want to do as a society, and curing the ills of the world is a noble cause (digging up iron and coal is not).

      • migtronixMEMBER

        Bullshit again! We have 0 capacity to PRODUCE any vaccine we might “invent” so guess who the real beneficiaries will be.

        I have been doing work with the National Trauma Research Center and most of the research is into aged trauma care so don’t bullshit me to my face and expect me to lap it up.

      • @casewithscience

        Sorry, but that’s utter bollocks. What this nation has a good history of is inventing things but the commercial benefit disappears overseas because we don’t fund commercialisation. Our company is a case in point.

        If it was such a good idea to fund pure research why did CSIRO get the big chop? (Yes, I know they can be a nasty bunch to deal with and stuffed full of bureaucracy, but that’s a classic baby out with the bath water response and cognitive dissonance to boot.

        What the new funds is likely to end up managing is guaranteeing jobs for the kids (of rich parents) who can afford to go to Med School at the top Unis. Welfare anyone?

      • casewithscience

        @MDsee

        I think you will find that we are far more sophisticated than in the 1970s (again, see cochlear, cook medical, Uniquest, Gardisil, etc).

        Yes, it is true that we often need to get overseas funding, but that doesn’t mean we dont get the benefit. Cook medical, for instance, builds a factory in Brisbane for the manufacture of medical implants based on Aussie innovation. Leo Pharma (a Danish trust company) built a factory on the Gold Coast for the manufacture of the peplin molecule (a QIMR invention).

        Medical devices and pharma is one of the only areas with growth potential in Aussie manufacturing.

      • casewithscience

        @Mig

        The 110 mill that UQ made off the licensing of Gardisil to Merck could be interpreted as an export. Of course, that is the output of research – the intellectual property. We don’t need to do all the manufacture if we control the IP. On top of that, if we do want to do the manufacture, then having the IP is the fundamental component to being able to make that decision.

        Yes, dementia and the elderly are big research areas, but they pale in comparison to cancer research (which totally dominates the medical research sector at present).

      • migtronixMEMBER

        IP rentseekimg, nice. Gardasil who’s profits come from government funded projects. Nice again. Maybe just maybe if we looked to environmental causes of cancer… But where’s the profits in that?

      • Medical research, scores a home rum…pity Aussies can’t commercialize what they research..

        My guess is that this money will get mostly squandered on “orphan drug” programs, because that’s where the vested interests will scream the loudest. AND the commercial drug companies will complain the least.

        It’ll be interesting to see what sort of market analysis is used to drive the research and focus the expenditure. Makes me wonder if this wont also create a golden age for the likes of PWC to provide tailored market research and properly scoped / developed business plans. Australian accountancy firms have a lot of previous form in somehow attaching themselves to teats that were never intended for them.

        Unfortunately real cutting edge medical research is a difficult field to quickly ramp up because there are very few people with the skills to really help (and they’re ALL already employed), so expansion in this field only comes from contraction in some other closely related field. The ONLY alternative is 100% importing of the research talent which is an own goal because it guarantees the commercialization will occur elsewhere.

        Maybe I should start a training company to retrain mining engineers and Auto workers as medical researchers, sounds like I could collect double fees…..

    • Miners?
      Big polluters? and just who might they be?

      Suspect after the tax review some of the others may participate in a somewhat delayed ‘sharing of the burden’.

      And then GST broadening and uptick.

  3. “And everyone will pay more to see a doctor, with the Government proceeding with its planned $7 payment for GP visits, with all funds raised to be hypothecated into a Medical Research Future Fund until its pool reaches $20 billion.”

    Could someone please explain why such a small country needs the world’s largest medical research fund?

    And why we actually need to lock money away to live off the income rather than using on-going tax revenue?

    And why the government plans to picks winners in this sector and not others?

    It’s a joke.

    • Actually I support this initiative.

      The medical industry is leveraged labour and no shipping, and it is the edge of technology.

      Because we are small we need focus.

      The elasticity of demand for medical services is much more inelastic than cars.

      We will pay heaps for the rights to procedures, we will pay some for the rights to a car.

    • casewithscience

      “Could someone please explain why such a small country needs the world’s largest medical research fund?”

      Sure.

      In the 19th century, the nation that mastered the steam engine could compete.

      In the 20th century, the nation that mastered the combustion engine and computer could compete.

      The 21st and 22nd centuries are still unclear, but there seem to be 4 favourites as dominant technology:

      1. Data and AI – doing all that cool stuff with information and decision making;

      2. Nano-materials – the least present of the three, new materials designed at the nano level could have a massive impact on engineering and vehicle;

      3. Genetic Engineering – new plants and animals resulting in improved yields and new access to traditionally difficult to manufacture chemicals.

      4. Human Health – improving worker productivity across longer lives and thus improving social efficiencies.

      Australia is outmatched in Data and AI, by light years. We are leaders in nano, but like solar panels it is likely that private industry just won’t give support and we don’t have the industrial base to support its broad uptake. In any event, the US, Japan and Germany are quite a way ahead of us. We are competent in genetics, but we are behind Korea and the US and we also have some of the most difficult regulation of genetic engineering (Commonwealth Gene Technology Regulator, etc).

      So that means that, if we are going to compete, then Health and medical research is the cheapest and most available option. It is a very smart decision.

      • migtronixMEMBER

        Bullshit! If you don’t have Data and AI you will NEVER EVER EVER get off the ground on medical research.

        What planet are you living in?

      • Phil the engineer

        @ migtronix. Isn’t the point that we can buy data and AI from someone else? Distribution of labour, focusing on what you’re good at and all that..

      • casewithscience

        @Mig

        Most data and AI in medical research can be off the shelf products created in the US or elsewhere. It is not necessary to be at the forefront.

      • migtronixMEMBER

        @Case but most pharma can’t be?!?!?!

        If you can pay for “data/AI” you can pay for anything else. Why do you think we can do “medical research” but can’t do “AI”?

        Why do you think its OK to by OTS products for one sector and not the other? Is it because those are the patent fields you work in?

      • flyingfoxMEMBER

        @mig The difficulty is that we have somehow managed to have a pretty decent medical research and training system. The same can’t be said for eng and IT.

        As someone with a IT/engineering background and working in the health/health informatics research area, it is sad but true when you see this.

        Anyways the NHMRC money does and will flow into the subsidiary areas.

      • casewithscience

        @Mig

        As I initially said, and flyingfox reiterated, we are competitive in medical research and we are totally outclassed in AI and data. Its a simple fact that the US will dominate the AI and data into the mid 21st century and after that Japan and China will join them. Australia simply can’t compete in that field.

        In medical research, the situation is different. For instance, did you know that the highest concentration of CT scanners per capita in the world is between Brisbane and Melbourne? Our medical schools dominate university funding (just as IT and engineering dominates in the US). This is an area where we can, and have, made a difference. It should be supported.

      • migtronixMEMBER

        @Case and did you know that all of those machines are made elsewhere and Australians pay a very high premium? Hmmmmm….

        Like I said more aged care, less over all care, and any benefit from NHMRC will flow straight to the rentseekers so stop bullshittting me with your Ricardian “this is what we do well so lets focus there” crap.

      • drsmithyMEMBER

        @Case and did you know that all of those machines are made elsewhere and Australians pay a very high premium?

        You really do have a staggering ability to miss (avoid?) the point sometimes.

      • casewithscience

        @Mig

        I recently moved from one of the largest medical research institutions in the country. The majority of data was collected and collated on Excel. While population infomatics required more, the most part of clinical trials and clinical studies were no so intensive as to require software and hardware which you describe. Rather, off the shelf products are sufficient.

        Australia cannot “value-add” much to the AI and data sphere, but we are in a position to add huge amounts of value to the medical devices and pharmaceuticals areas.

        Also, I take issue with your view that pharm can come “off the shelf”. The fact is we benefit deeply from our own pharma industries (Cook medical, Cochlear, Leo Pharma and peplin, among many others) beyond the mere fact that IT MAKES LIFE BETTER FOR THE SICK AND DISABLED!!!!!!!!!

      • migtronixMEMBER

        So lets see we are doing research that is so limited in scope it can be handled on spreadsheets and this will bring benefits billions how?

        @smithy and you have a staggering ability to say nothing

      • casewithscience

        @Mig

        Because it is not the numbers that underpin the IP. They are just used to endorse the hypothesised effect. The real value is in the invention being tested. You can do a calculation for xenograph to genes on a x486 computer for heaven’s sake. That’s how Myriad did it.

      • migtronixMEMBER

        You can do a calculation for xenograph to genes on a x486 computer for heaven’s sake. That’s how Myriad did it.

        And they did it with OTS s/w did they?

      • We have resources. We have to make a decision as to what is the best way to employ them.

        But common to all endeavour is the lowering of cost that is a function of specialisation.

        Medical research is good enough as a choice, it ticks all the boxes.

        The second point to make is that we need to be equally honest and decisive with regards our analysis on what is needed regards property.

        Let’s itemise some points here:

        The first point is that to load such expensive housing into labour costs is the design only of policy morons, and that policy makers can’t see it or don’t have the countries interests at heart enough to take the political contest out of it or the skill to manage its rectification it is not a good sign.

        The second point is exclusive property structure. As we move more capital to leveraged labour and reward IP to drive innovation monopolistic positions can emerge creating economic sub-optimisation and morally inappropriate attitudes to the right to property in the face of poverty.

        The key initiative at this dynamic is to require that all personal assets in excess of a particular amount must be held in listed tradable liquid public company structures.

        To be frank anyone can produce some of the stuff that came out of Canberra last night, but that the picking of medical technology did is a sign that we can take that very Australian don’t care whether it came down in last storm or is the first layer of red stuff at the bottom of Ayers Rock – if it’s a goer it’s a goer and be stuffed what anyone thinks.

        We can do that with equity, and if we do we will have the structural financial technology to match the future alongside the industries.

      • migtronixMEMBER

        @case now! Not when myriad did it! Sheesh it’s like you’re just slow or something

  4. Billybob McBob

    Too much on the spend side and too little on the tax side for my liking. We have sufficient tax rates, we just need to remove all the lurks, deductions etc and we’d be in a far better state on the budget bottom line, as you’ve mentioned many times before, UE. Putting in a ‘deficit levy/tax’ without reforming the holes in the tax system you already have shows pretty weak leadership, in my view.

    Oh, and I’ve said it before and I’ll say it again, income =\= wealth. Means testing of supports needs major reform to deal with this issue. As a start, let’s stop giving cash to retired multimillionaires, if we’re in supposed budget strife…

  5. I can tell you that people are shit-scared and will be keeping their wallets shut in anticipation of all this govt tightarseness.

    There will be a big impact on the economy.

    • Yeah, I agree Ortega.
      The real negative interest rates have already taxed the 20 to 30 year olds and those over 60 years… and that’s before we even get to the budget.

      Most of us will have less discretionary spending.

  6. No changes to NG rorts (as expected), and we’re spending $250M on chaplains in schools?

    Another opportunity for savings foregone.

    Maybe next year….

    • “The budget allocates funding of $243.8 million over the next four years. Under this program, all Australian schools can apply for $20,000 grants towards the cost of employing a school chaplain”

  7. I don’t understand how the below 30s welfare changes can gel with the equal opportunities and anti discrimination acts.

    I also don’t understand how it is supposed to do anything useful.

    I expect it to triple the crime rate overnight, and double the bastard birth rate and make our charities even more overloaded.

    Is it going to be a back door minimum wage decrease? Sham contractors paid by the ‘job’ earning maybe $5/hour?

    That’s the most significant change out of all of it. A massive social change.

    Or is this how Tony pulls a double dissolution? By forcing socially sane people to “back the bludgers”?

    • Yep, its astounding. Zero safety net for 6 months. The assumption being that somehow there is paid position for every worker under 30; and that they are being rejected. In preference to what? Being broke and homeless?
      Bad societal implications. To my knowledge, even if you are under 30 you are a citizen of this country, and people are not treated like this by their own government.
      One term.

      • migtronixMEMBER

        But the Fiberals know that dumpster-diving is all the rage with Green voting hipsters.

        Fe Fi Fo Fum I smell the blood of a salary man

      • There also seems to be this assumption that anyone single & unemployed under 30 can just move back home with mum & dad.

      • Perfect time for the setup of a private prison.

        The smaller businessman should look to home security.

      • migtronixMEMBER

        @marked64

        Don’t look now but Tassie could be just the place! Send all the unemployed under 30s there – no one will ever hear from them again…

      • Exactly Hamish, although there is more of course: shaping attitudes, bidding down wages by pitching desperate people against one another.
        Anyone who read Hockey’s original AoE speech in London will recall the numerous examples of Asian filial piety, (although in reverse if adult children are being supported by Mum and or Dad). In other words the Asian model of family unit as the sole providers of social welfare. Are they living in a Christian fantasy of the 1950’s?

    • Very mean spirited from a Treasurer & PM who like to call themselves Christians…

  8. Overall I thought that it was a fair effort – certainly not the stuff up that I was expecting.

    Love the tax reduction for companies which will give some stimulus for business. OK with the aged pension changes to the indexation and losing Family Tax B for households with higher incomes. OK with fuel subsidy indexation and most of the other measures. Still a lot of budget changes to come to grips with.

    It could have been far worse than this.

    • You obviously don’t remember being young and looking for a job – or were you enjoying your free university instead when you were that age ?

    • StomperMEMBER

      You mean they could have F^&%ed over the youth even more?

      FFS what is being done to the under 30s is a national disgrace.

      – Youth unemployment rate of 12%+ and growing
      – Debt funded University Education with increased interest and lower repayment threshold
      – Housing prices at 9x income
      – Tax benefits that favour the Boomers at the expense of the young
      – Restrictions on New Start and Youth Start
      – Under-investment in apprenticeships / university
      – University free market arrangements
      – 457 visas because it’s cheaper to import skills than train our own

      AND with no material change to the budget spend as a % of GDP

      Fixing the debt / deficit – my arse!

    • Wow – 4 strawman arguments and the whine of 5 Boeing 747’s straining to take off.

      The budget must have been even better than I thought.

      • I think that we all won a little because it wasn’t the horror budget trumpeted by many. Certainly not as bad as I expected.

        I can’t believe the whingeing here, I could cut and paste the verbiage into some very trendy wallpaper but seriously where would you put it?

        Maybe at the comedy club, that would work well. Sort of “it’s soooo bad it’s cool”

      • Really? Because I’m pleasantly surprised that the budget is much better than I expected I’m anti under 30 Y/O’s.

        That’s a very long bow to draw Mig. Perhaps you should take a bath in the pool of reality and calm down.

        Tomorrow is another day.

      • dumb_non_economist

        PF,

        It wasn’t a horror budget for whom? You? What about Uni students, what about the young UE and since when did someone 25-30 become young again ffs.

        Peter, you have shown yourself to be like 2d, where self interest prevails as always.

      • DNE – Every single post on this thread is about self interest including yours.

  9. drsmithyMEMBER

    And everyone will pay more to see a doctor, with the Government proceeding with its planned $7 payment for GP visits, with all funds raised to be hypothecated into a Medical Research Future Fund until its pool reaches $20 billion.

    I think we should use the same logic and change all police stations over to 1900 numbers.

    The funds raised can be “hypothecated” into a “Police Force Future Fund”.

    We can also put turnstile in front of each school so every child has to drop in a $1 coin every morning. The money raised can go towards a “Teacher Future Fund”.

    • migtronixMEMBER

      I like the part where they get a pay rise this year then not another till next year! Shocker!

      How on Earth is this idiotic idea of a future fund anything but severely Inefficient?

    • It is a bait and switch like the Future Fund..

      Future Fund is misleadingly referred to by its creator, Peter Costello, as a sovereign wealth fund.. whereas it is a senior public servant + pollie pension slush fund, used to fund the generous pension liabilities that the PS themselves created in the first place!! And since the fund is off the government balance sheet, it is shielded from any real Greece style budget crisis that may force a cut in pension liabilities.

      • “…whereas it is a senior public servant + pollie pension slush fund, used to fund the generous pension liabilities that the PS themselves created in the first place!!”

        Don’t forget that it’s also useful to provide an income for the politician that created it in the first place.

        I expect that Hockey already has dibs on becoming chair of his new medical research future fund. Or perhaps Costello will move on to that so Hockey can take care of the original future fund. Or rather so it can take care of him.

    • The Budget is itself a Back to the Future Fund. First,
      Back to the 90’s, then
      Back to the 50’s, then
      Back to the 1400’s

  10. reusachtigeMEMBER

    Yeah, mainly shared amongst the weak and poor, but that’s ok, they’re not very productive anyway and hold us back.

    • migtronixMEMBER

      Shoulda bought last week reusa, this time next year buying in Melbourne will start at $1mil for a 2 bdr out in Lillydale.

  11. A budget of liars.

    Budget, Noun, collective, applied to the biggest liar of a politician in living memory. Rudd had a GFC, Gillard had a hung parliament with a Green MP. Abbott has no excuse.

    He outright lied when Mr Abbott said on the night before the 2013 election: “No cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS.”

    And it is a budget built on the misery of the least fortunate.

    Work for the dole is fine but only if accompanied by a job guarantee, but under Abbott you get unemployed with a wife and 3 kids at 29 after you’ve been working for 7 years and you are treated like a no good layabout.

    • migtronixMEMBER

      That’s not a bail in *pulls out the budget* this is a bail in!

      Thanks for paying losers…

  12. Perhaps I missed something here.

    If a person under 30 loses their job and can’t find work now they will have to live for 6 months before getting unemployment benefits (dole/newstart). How?

      • migtronixMEMBER

        Selling drugs and stealing.

        You got it wrong that’s the boomers. Or did you mean on a tiny tiny scale?

    • Personally would like to see a short term emergency safety net, i.e. 3 months benefits if you lose your job, but then switched off if you haven’t regained employment. As I understand it the opportunity is there for young people (25-30) to increase their employability by further training or study during which time I assume they would still be eligible for Austudy. Is that an unreasonable ask if they are going months without employment?

      • migtronixMEMBER

        No no its entirely reasonable, barrista courses don’t take all that long do they?

        But all those dear boomers past 65 will go years and years and years and decades w/o employment… but, you know, don’t look there…

      • If hospitality is an area with a need for staff then why wouldn’t someone who is unemployed do training or seek employment in that area?

        Over a decade ago I worked at McDonalds. I’m a long way from that line of work now, but if I lost my job & couldn’t find a similar job I wouldn’t be too proud to return to McDonalds in order to support myself.

        I’m not really sure what your point is with the boomers. I am half the age of the boomers. I do not automatically support other policies just because I think young people should be pulling their weight.

      • migtronixMEMBER

        Wow! Truly a vision for the future, train in a go nowhere job today and go nowhere tomorrow because we chose not to invest in developing higher value added industry.

        Thanks and maybe I’ll get a McLatte from you one day

      • lol what the heck mig? What does “developing higher value added industry” have to do with my comments or those I was responding to on unemployment benefits?

      • drsmithyMEMBER

        Over a decade ago I worked at McDonalds. I’m a long way from that line of work now, but if I lost my job & couldn’t find a similar job I wouldn’t be too proud to return to McDonalds in order to support myself.

        What if they’re not hiring ?

        What if they’re only hiring 16 year olds they can pay less ?

        The whole premise behind conservative “punish the unemployed” philosophy is that most people are unemployed voluntarily. There is nothing to support this idea even in theory, let alone actual evidence.

        Current unemployed persons in Australia: ca. 800k.
        Current available jobs: ca. 140k.
        And on top of that are the million or so underemployed.

      • Cost IndexMEMBER

        He’s just pissed and venting BB. Just look at the number of posts he’s made just on this page, he’s inconsolable now. (Rightly I might add.) Don’t take it personally

    • drsmithyMEMBER

      If a person under 30 loses their job and can’t find work now they will have to live for 6 months before getting unemployment benefits (dole/newstart). How?

      Weren’t you listening to Hockey wax lyrical about how the asians do things ? By moving back home with mum and dad, of course.

    • I put this in another thread but I suspect that the Australian Army will be raising a number of ‘cannon fodder’ battalions in the near future made up of under 30’s from Macquarie Fields, Minto etc.

      Next step will be Courts allowing enlistment into the Defence force as an option in sentencing for property crimes.

  13. Ronin8317MEMBER

    Unemployment benefit for the young is changed, and they can only be paid 6 months in a year, while business who employ over 50s will get 10K from the government. I hope they have the hard data to back up the move, and an ideological social experiment.

    Cutting off the Australian Network, cut in foreign aid, and increase in the defense budget. Australia is moving away from ‘soft power’. Then again, by continuing to piss off Indonesia with ‘Stop the Boat’, ‘soft power’ is not going to work anyway.

    Now for the interesting part : how much of it will get through the senate? Clive Palmer has flagged he won’t support the GP co-payment. If the LNP ends up backing out of all the unpopular budget cuts due to a blocked Senate, then they have spent their political capital for nothing.

    • migtronixMEMBER

      They don’t care the fascists have hitched their boat to the boomers and the corporatocracy will use them to get their way against everyone else.

      Cutting company tax rate?!? WTF!?!

  14. Ah, the sweet sting of opportunity. We should all welcome its hot embrace.

    the opportunity to pay higher taxes

    the opportunity to pay more for petrol

    the opportunity to pay more at the doctor

    the opportunity to starve welfare recipients

    the opportunity to marginalise single mothers

    the opportunity to undermine universal health care

    the opportunity to starve hospitals and schools of funding

    the opportunity to continue subsidising property speculators

    the opportunity to continue subsidising boomer superannuants

    the opportunity to turn the young into unskilled minimum wage slaves

    the opportunity to keep Gina Rinehart in the manner to which she is accustomed

    the opportunity for your kids to pay more to get a university education and spend longer paying it off

    the opportunity to further render meaningless our political discourse by labelling a litany of broken promises an opportunity

    This is the opportunity we had to have.

    • migtronixMEMBER

      Your comment (with my screensize) looks like an exponential curve!

      I suspect the opportunities to pay our masters for the benefit of working for them will indeed increase exponentially.

    • General Disarray

      Don’t forget the opportunity for your child to see the school chaplain. That one comes at the bargain price of a quarter billion.

      • migtronixMEMBER

        Probably to cover the expense of putting hidden cameras in all the toilets… to prevent suicides of course…

      • We can have another royal commission in another couple of decades to look into how taxpayers funded pedos to be employed in schools.

  15. More plaster on the temples [wealth buffing] w/ increased human sacrifices to bring the gaw – bobs gifts.

    skippy…. thousands of years of economic thunkit still echos….

      • Yep.

        Biggest mining boom in Australia’s history.

        =

        Torture budget, unwinding of universal healrthcare / education rights.

        Cant wait for future mining booms!

        Pension age will be pushed to 95.

        Ahhhh ‘Straya….

        WINNING

    • migtronixMEMBER

      3d1k seems you’re not terribly well placed to make that call, but with your fascists at the helm I suppose that’s how things are going to roll from now on… by fiat!

    • migtronixMEMBER

      You could have warned us that we essentially have a pedophile ring running the nation now

    • Next Budget GST.

      And Super/NG fix required – the hard line on the young need be replicated in some way on those considerably more comfortable.

      • General Disarray

        @3d

        And Super/NG fix required – the hard line on the young need be replicated in some way on those considerably more comfortable.

        Agreed.

        • migtronixMEMBER

          Hard to tell if you’re falling for it — 3d will always throw out a bait that “in the future your concerns, which are valid, will be addressed, but for now, be an adult and suck it up”.

          But it will never be delivered.
          Its called a delphi technique.

          Does anyone remember 3d being an adult and sucking it up a year ago?

      • “Next Budget GST.

        And Super/NG fix required – the hard line on the young need be replicated in some way on those considerably more comfortable.”

        And what do you think the odds of that are 3d?

        Seems to me that they’ve far more heavily targeted non-Coalition supporters with this budget. I can’t see them turning around and then targeting their own supporters when we are a year closer to the next election.

        • I think GST stands a fair chance. It is an obvious choice for increasing revenues and we all ‘share the burden’.

          Super and NG I agree are more problematic from a supporter base view but could be flagged as up for discussion and brought to the next election. In the interim proceed with the tax review and if recommendations arise that support change to both get the public dialogue going, get media on board and who knows NG changes could be sold to new generation if voters as improving housing affordability and Super as an equity position – all in time for the next budget!

          • flyingfoxMEMBER

            We don’t need another review. No one bloody acted on the last one. While much has changed since, if we adopt even a quarter of the strongest recommendations, we’ll be in a better place.

          • dumb_non_economist

            2d,

            What a crock ….. and we all ‘share the burden’. The burden will disproportionately fall on the low income and UE.

            Next: Super and NG I agree are more problematic from a supporter base view but could be flagged as up for discussion and brought to the next election.

            You really are a slime ball, you know their is no chance that will ever come off. I just have to laugh at the “it’s hard on the poor now, but the rich still have it coming” line. We both know that isn’t going to happen.

          • dumb_non_economist

            2d,

            What a crock ….. and we all ‘share the burden’. The burden will disproportionately fall on the low income and UE.

            Next: Super and NG I agree are more problematic from a supporter base view but could be flagged as up for discussion and brought to the next election.

            You really are a slime ball, you know their is no chance that will ever come off. I just have to laugh at the “it’s hard on the poor now, but the rich still have it coming” line. We both know that isn’t going to happen.

  16. This site is turning into a left wing rant with no sensible comment, apart from the writer of the article. The comments exemplify what Hockey is trying to do. Turn Australians back into men, instead of a bunch of carping whingers who can never get enough of other peoples money. Seems like we just can’t churn out enough liberal arts students.

    • migtronixMEMBER

      Oh yes dj men and of course the traditional way of turning boys into men is to gift the boomers years of goodies.

      What degree do you hold? I have 2 engineering degrees…

      • Mig, although I am not into one-upmanship, I will confess to having a degree of commonsense, although not all will agree. There are a lot of things that need doing, and hopefully will be done, but given the outpourings of grief and pain emanating from this small attempt at redressing the profligacy of the ALP/Greens shemozzle, I guess they will make haste slowly. I like most would like to see housing addressed, and the unfairness some young people face.

      • come on Mig, there is some good and bad here:

        bad – no hit to property specufestors, hit to middle class via higher taxes
        good – a path to balance the books again, elimination of large parts of the public service, income testing family benefit payments, winding back of pensions

      • dumb_non_economist

        mig,

        The traditional way of turning boys into men is the military way, bastardisation!

        DJ, I guess a Degree in Common Sense isn’t a science degree, so it must be a liberal arts degree, yes??

    • Having perused Facebook, some news articles & now Macro Business comments… it is disappointing to see how we have mastered the art of the whinge.

      • migtronixMEMBER

        Well let me assure you we can cop it on the chin and soldier on!

        But, just for shits and giggle, do tell what is the Art of Whinge? Perhaps Newscorp is more to your liking, they cover everything with a positive light — well except carbon taxes, or gold — and you’ll find no avenue for anyone to “whinge” there.

        BTW have we mastered the art of central banking too?

      • BB yep. To brighten the day the OECD again has Australia top of the list as a place to live. (Can’t link, goes to spam).

      • @Mig “Perhaps Newscorp is more to your liking, they cover everything with a positive light”

        It’s not about only reading or talking about things in a positive light, it’s about coming to terms with the fact that we are likely to have a deteriorating standard of living. Why whinge about it when we knew it was coming? The Macro Business bloggers have been saying as much (even if you have to read between the lines sometimes), given demographic & growth challenges we face. Instead we’re all like “waa waa the government cut this or that”. Seriously we need to HTFU because it’s likely to get a lot worse than this budget.

        This may have been shared here in the past, but well worth the watch (I only caught it this weekend and it’s a good dose of reality for those trying to hold onto yesterday): https://www.youtube.com/watch?v=3K2m7NnO7iY

      • migtronixMEMBER

        Who’s holding onto yesterday? Oh yeah the boomers and this government!

        Company tax cut is just crushing isn’t it BB?

      • General Disarray

        I don’t disagree with you, BB. However, my main frustration comes from the areas the government won’t touch.

        This budget is loaded with a little too much ideology for my liking. An evidence-based approach across the board and it’s very hard to complain.

      • @mig I agree with 3d1k’s comment down further, “And Super/NG fix required – the hard line on the young need be replicated in some way on those considerably more comfortable.” I agree the boomers have gotten away lightly this time.

      • “I agree the boomers have gotten away lightly this time.”

        And isn’t that a large part of what we’re whinging about?

        That and the fact that the government deliberately excluded tax revenues and expenditures from the COA?

      • drsmithyMEMBER

        Having perused Facebook, some news articles & now Macro Business comments… it is disappointing to see how we have mastered the art of the whinge.

        Can you expand a bit on how complaining about the deliberate targeting of the weak to further entrench the strong, is “whinging” ?

      • @drsmithy, amongst the whinging there are also some valid and well argued points, but the whinging is taking centre stage across most of the platforms I mentioned. Some of the images I’ve seen shared by Abbott hating friends on Facebook have included reference to the debt levy tax, when they are not earning anywhere near the amount required to pay it. Hilarious. Much of it is whinging for the sake of it, not because it furthers the conversation.

      • dumb_non_economist

        BB,

        I suggest you read the comments more closely, the WHINGE is about the budget hitting those less able to deal with it while leaving those higher up the financial poll virtually untouched.

        Most have objected to hnh labelling it as reasonably spread across the community.

        I haven’t been touched by the budget, but it has incensed me as bloody unfair. But I never expected anything different.

      • drsmithyMEMBER

        I haven’t been touched by the budget, but it has incensed me as bloody unfair. But I never expected anything different.

        My feelings exactly.

    • General Disarray

      For someone complaining about the lack of sensible comment you sure failed to lift the bar.

      • migtronixMEMBER

        Whinging about whingers is perfectly acceptable — no dissonance there. Besides, I bet dj is a liberal arts major and he just doesn’t like the competition

    • +1. These people are primarily here because they think house prices are too high. This budget will put a bit of downward pressure on house prices. Now they want to vote Labor/Greens who’ll spend like drunken monkeys and who most definitely will not hurt house prices.

    • This site is turning into a left wing rant with no sensible comment …Turn Australians back into men,

      You are a moron. Policies that would turn Australians back into men:

      * drop helmet laws and seatbelt laws
      * increase speed limits
      * drop DUI offence.
      * lower beer and alcohol taxes
      * allow citizens to build their own structures on their own land without complying with the strictest rules on earth.
      * allow citizens to bring food and drink in to watch the cricket and then run onto the field at the end of the game.

      • Also allow an Aussie man to walk onto a building site (no fences and stupid signs) and speak to the boss man and offer himself to do a day’s work and collect his pay at the end of the day – no paperwork – no tickets needed.

      • and allow an Aussie kid to let off a few crackers once in a while*

        * fireworks that is.

        Also allow kids to ride their bikes up to the corner shop (allow corner shops again) and buy some cigs or beer for the old man.

        And the kids could have air rifles or BB guns again, and pocketknives (and no frisking without cause).

      • Thanks for the compliment, I think history will judge morons better than ALP/Green supporters, if only just. And I said men, not cavemen.

      • migtronixMEMBER

        @dj Fat chance, history will not be written by the boomers. What men? Like Tony-Do-As-I-Say-Not-As-I-Do-Abbot?

      • * drop helmet laws and seatbelt laws
        Agree. People should be responsible for their level of safety, but they should be prepared to wear the consequences (i.e. insurance may choose not to cover those who decide against safety measures).

        * increase speed limits
        Agree. In consultation with local residents affected.

        * drop DUI offence.
        Disagree. That is putting others in harms way.

        * lower beer and alcohol taxes
        Agree. I drink infrequently, so wouldn’t benefit much myself.

        * allow citizens to build their own structures on their own land without complying with the strictest rules on earth.
        Agree.

        * allow citizens to bring food and drink in to watch the cricket and then run onto the field at the end of the game.
        Depends… you should be at the mercy of the ground owners rules.

  17. ceteris paribus

    I personally think people tolerated the biffo of Abbott and Hockey when they weren’t in power. But last night, watching the delivery of the budget on TV, I got the distict impression that people will turn. The attack on the young, unemployed, hospitals for the sick, the disabled, pensioners was nothing short of a bashing – stupid and cruel.

    I think they have gone a bit mad.

    • They have gone a bit mad.

      They actually believe Australians will enjoy being beaten with the old Stuart Surridge from the back shed.

      Looking at Abbott’s expression in media this morning; shock/disbelief.

      Sadists.

  18. What about the elephant in the room? Large migration?

    If migration was cut to pre 2005 levels, I suspect the savings in infrastructure spending would be huge and would go a large part to making up the deficit.

    Anyway, suck on some lemons Australians. Pensioners. Future uni students. Younger unemployed persons. And remember to make your sacrifice to the altar of large migration.

  19. About the only person on the ABC last night talking sense on the budget that I saw was John Hewson.

  20. dumb_non_economist

    Quote:

    Few groups will be spared from this Budget –…………………………………………………………..and higher income earners – will all be called upon to bear expenditure cuts and/or tax increases.

    What a crock of shit.

  21. i propose an upper limit on posts to one topic. Please Migtronix, WE GET YOUR POINT!!!!!

  22. I’ve got a Love and hate relationship with this budget.
    Family tax benefits certainly not sustainable.
    But they’ve gone too hard with cuts in some areas and overspending on roads.

  23. I did not rate Joe Hockey highly before, but I must admit that he did a decent job this time, and by doing so, he earned my respect.

  24. Hi

    I have been a long-time lurker on this site, for several years now and have always appreciated the articles and material as providing a badly needed alternative to the mainstream commentary which seems to get so much wrong. The comments are also a constant amusement :).

    I have felt the need to finally create an alias and post due to this site’s response to the May budget. I am really disappointed at the limp pass mark that has been handed out, and the reasons for supporting various measures instead of promoting the alternatives that the blog has been pushing for months now.

    In particular I am puzzled as to why, when there is agreement as to the treasury forecasts for significant headwinds from the drop in mining capex as well as the shift in terms of trade with lower export prices, the mostly regressive measures in this budget that will further impact on future growth are accepted. I seem to recall from previous budgets the message was that we needed to avoid any sudden measures to drastically cut the deficit in order to prevent this very thing occurring. Are we now resigned to accepting we will be in recession in the near future?

    Measures such as the copayment on GP’s & other medical services & increase to the PBS drug charge are regressive, to say nothing of breaking the principles of universal public care. While the argument can be made that it will reduce ‘unnecessary’ visits, I think a stronger case can be made that it will result in more expensive treatment being required down the track, an ounce of prevention is worth a pound of cure. What this will definitely do is mean less money in the pocket of those people who would otherwise be most likely to spend it – those on lower and fixed incomes. This will impact on aggregate demand in the economy at a time when we need to support it to counteract what is coming.

    That most of the funds raised will be stashed away in a ‘fund’ to pay for medical research seems like a great idea in theory, in practice many of the discoveries are susceptible to capture by rent seeking interests instead of the full benefit being passed on to the taxpayer. Also why not make this copayment available for funding directly instead of creating another pot of money that will be subject to political favour.

    The resumption of indexation to the fuel excise is likewise a net drain on the economy – the brunt of which to be borne by lower and middle income earners. While you certainly make a valid point that the freeze by the Howard government was unnecessary and has contributed to the structural deficit we find ourselves in, any changes made now need to be considered in relation to the effect they will have on overall demand now.

    The ‘least bad’ change – being the deficit levy on high income earners – is one you disagree with! While I personally am against any increases to income tax, this would have a lower impact to growth. Rather than being spent and cycled through the economy, too much of this money goes into unproductive asset price inflation in this country 🙁

    This is really the perfect time for some serious reform by this government – they recognize the future headwinds we face, they say they are serious about reducing the chronic deficit condition created and perpetuated by both sides of government over the last decade. What they have delivered is a Budget that will drive us toward recession over the coming years. Maybe its the Budget we have to have. Instead of such major cuts and a financial squeeze which is directed more to those less well off, this is the opportunity to move to more efficient and equitable arrangements that can reduce the deficit by the same or more without the negative effects from the measures currently proposed.

    Options to collect economic rents from government granted and restricted licenses, land value tax, a resource rent tax on our finite natural gifts, a royalty from those who are given the privilege to create our new money. These are all options to help balance our books without the push toward recession and have been promoted at various times on this site.

    I won’t go into all the concessions and tax expenditures that remained untouched. Australia is a world leader in this area. So much for the egalitarian society. While this appears at the bottom of a heavily commented article, I was hoping that some people would raise most of these issues in the conversation.

    The economy has been goosed by rate falls, but we are beginning to see this peter out. Look for further contraction if these Budget measures get through. Anyway I’ve said my piece, I would welcome feedback especially from the hosts (who otherwise do a fine job) especially if they consider their reaction to this budget compared to those past.