Wednesday, May 09, 2012

The budget

I find it hard to be critical of a surplus budget brought down by a Leftist government.  I never  thought to see such a thing in my  lifetime.  And the fact that the  surplus was partly achieved by welfare cuts  is all the more amazing.  And even the defence cuts did not involve any reduction in personnel numbers.  And allowing for business losses to be carried backwards as well as forwards is both innovative and potentially very helpful to business.  And lifting the tax-free threshold was WAY overdue.

As ever, however, there are clear negatives.    A  government seriously concerned for the welfare of Australians would place great priority on tackling a vicious killer that   tears families apart on a daily basis:  Our  roads.  But instead of big allocations for highway upgrades, what we got was a series of fripperies that will  be at best of marginal benefit to anyone.

And the fripperies could well be counterproductive.  The much touted national disability insurance scheme will undoubtedly even up disability support for people   -- but in the usual way of these  things, the support will be levelled downwards, not levelled up.

The fripperies were of course politically   necessary as a sop for what the carbon tax will do.  When the carbon tax cuts in a few weeks from now, the price impact will likely be huge  -- not necessarily because of the tax itself but because any business that thinks it can get away  with it will put up its prices and blame that on the carbon tax.   That should filter through into the statistics and come out nicely just before the next election.  What fun! (for Tony Abbott).

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