Last Night the Federal Treasurer handed down his 6th and possible last budget.
Here are my thoughts on the budget.
Traditionally, the budget before an election is filled with sweeteners for the electorate which is another way of saying bribes for votes, this budget doesn’t have that and from that perspective I see it as a fiscally responsible budget. According to traditional economic theory, in a time of economic contraction, a budget deficit can be used as an expansionary tool, stimulating the economy and reducing the size of the contraction. So whilst the deficit was certainly a backflip on a promised surplus, I think it makes economic sense at this stage in the current economic climate.
The $24 Billion spending on infrastructure spending I see as a positive.
There are no real measures in the budget that helps small business. The unemployment rate is predicted to stay reasonably high at just under 6%, so its disappointing that pro small business measures were not introduce to stimulate employment.
The introduction of the NDIS is a big positive and the medicare increase levy costs a wage earner on $70,000 a year about a $1 a day.
The removal of the baby bonus is a positive move as it has been replaced over the years by paid parental leave and therefore had become redundant.
I am disappointed by the delay in the increase in the Aid budget.
The Government has officially dropped the idea of the internet filter. Whilst i think there are some negatives on the internet like child porn, sexual violence etc, I have never been a fan of filtering the internet as I see it as another intrusion of big brother into our lives. I am not pro bad web based content, I am just anti big government.
Investing over $100 million in screening for breasts, cervical and bowel cancer, supporting critical chemotherapy medicines is a positive.
The carbon price is touted as being $12 a tonne which is significantly lower than the $29 a tonne that was predicted. The mining tax is predicted to bring in $2 million in revenues this year down from the $2 billion that was originally predicted. Both these figures make me exceptionally cynical of any of the other predictions in the budget as this Government doesn’t have a good track record of getting forecasts right.
I dont support any cuts to Higher Education. In this budget there will be a $2.3 billion cut to higher education funding. The 10 per cent discount on paying university fees upfront will be abolished, student start-up scholarships will be converted to loans, and there will be a lower limit on tax deductibility of self-education courses, saving the Government $500 million. Effectively the student who benefits from the money allocated to the Gonski reforms for the schooling system, will be worse off once they hit University.
I think it is disappointing that there is no targeting welfare spending on things like reducing the suicide rate in Australia, Mental Health issues and support services, dealing with homelessness and address in a greater way bullying and cyberbullying.
I will leave the final thought of this blog to David Willis, Senior Lecturer in Economics and Finance at the Queensland Uni of Technology, made this observation. “The budget relies on many assumptions – on the value of the dollar, the revenue that the government may or may not get in. Whether or not this future proofs the economic growth and reasonable levels of employment, if we assume all of those, then it’s not a bad start. But they are large assumptions and as we’ve seen over the last 12 months previously how those assumptions can be quite wrong.”