Henry Thornton struggles to identify losers from this budget.
"My overwhelming impression is that this is not a conventional Treasurer’s budget, and of course we all know why this is the case. Here is a prime minister in waiting, dishing it out to all and sundry, responsible, grave and, well, Prime Ministerial. Good on you mate."
This is the modern Australia, and our kindly Treasurer – a budget with (almost) no losers. • We have the mooted welfare reform, but existing welfare recipients lose no entitlements, just new ones, who have to work if opportunity knocks. (Not restated but, remember well, honest toil is good for your soul.) • Public servants with massive unfunded superannuation lose no entitlements - $16 billion plus much of the sale of Telstra will establish a “Future fund” to pay the relevant pensions. The officials who administer the Future fund will be winners, as will investors in the Australian share market whose shares will be increased in value as the fund invests. • Tax cuts for all, poor, middle and rich alike and the superannuation surcharge abolished. Gadzooks – is that retrospective, Mr Costello? • More opportunities for young people, extra training opportunities and presumably more diligent “NewStart” bureaucrats to help. • An anti-smoking campaign for young people – prevention being better than cure. • Old folk – science will find new drugs (cancer and dementia especially are targeted), health spending will grow faster than any other catagory and the government will provide helpers (whose allowances shall be untaxed) to ease your final days. • The RBA – the apparently permanent surplus of around 1 % of GDP (compared to Labor’s 2% deficit, note well) will keep interest rates down, you will be loved, especially when you mix with other central bankers whose governments run deficits. • Business – taxes will be cut and infrastructure will be improved, with something significant to be built in every state – so State governments are also winners, and should not forget their massive GST windfall. • Coastal dwellers everywhere in the region - there will be a Tsunami warning system, we shall continue to police the Solomons, and “stabilize and reconstruct Iraq” – Saddam and the Saddamites being rare but deserving losers from this budget and our recent work. • Embassies and borders will be better protected, there will be e-passports, use of biometrics and “improved intelligence services”, staffed presumably by retrained former builders with bad backs. • The economy – another winner, if the forecasts are right - will experience solid growth of around 3 % in the “forecast year of 2005/06” after a bit of a pause this year – “the pause that refreshes”, although this was not offered as a description. Unemployment will remain low, the terms of trade will remain high (I lapse into the economist’s argot, as the Treasurer did not, to his credit) and investment in mining projects will boost exports next year. This is, incidentally the forth year in a row that Treasury has predicted export recovery – like a stopped clock, it will be right sometime.
There are plenty of risks to the benign economic outlook - monster US "twin deficits", Australia's monster CAD, the western world's housing bubble deflating, ditto consumer debt-driven spending boom, China overheating and slowing, etc etc. Our biggest concern is loss of investor confidence in Australia's "miracle economy." But this was no time to emphasis these risks.
The Treasurer sat down to loud applause from his colleagues, rueful silence from the opposition benches. We watched Kerry O’Brian’s team, and Red Kerry himself, try unsuccessfully to lay a glove on the budget or the Treasurer. Wayne Swan spoke so quietly that we had to ask Fortesque to turn the volume up, but we hadn’t missed much. “It’s not responsible” Wayne squeaked when Kerry told him Labor faced another two terms in opposition.
Mrs Thornton agreed. “It’s quite good, isn’t it?” she volunteered. “The Libs will get reelected.” Fortesque complained that there was no extra money for research into killing cane toads. Bert practiced the saxophone, a career as a street entertainer never far from his mind. Emily Rose was at her dancing class that, she later asserted, “was boring.” The Thornton family has survived another budget, Henry’s 37 th as it happens.
I almost forgot to mention the losers from this generous budget. Apart from Saddam and his former colleagues, the only clear losers are her majesty’s loyal opposition.
My overwhelming impression is that this is not a conventional Treasurer’s budget, and of course we all know why this is the case. Here is a prime minister in waiting, dishing it out to all and sundry, responsible, grave and, well, Prime Ministerial. Good on you mate.
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