Hockey’s budget applies a chopper, not a brain

According to Treasury secretary Dr Martin Parkinson, the budget is replete with ''structural reforms''. According to his boss Joe Hockey, it will ''drive the productivity required to generate economic growth''. Sorry, not convinced. As a vehicle for micro-economic reform, the budget gets less impressive the more I study it. Parkinson seems to be referring to reforms to the structure of the budget itself,...

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Sleights of hand in Hockey's budget

You have to look hard, but there are two logical sleights of hand in Joe Hockey's fiscal policy, as dutifully expounded by his Treasury secretary, Dr Martin Parkinson, in his speech this week. Parkinson makes three important points that have tended to be lost in all the furore over Hockey's choice of victims in his efforts to get the budget back on track. I'll take issue with the last two. The first is the "measured pace...

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Hockey's budget game plan: favour the well-off

Do you like paying tax? No, I thought not. Well, I have good news. The harsh measures in last week's budget were directed towards one overwhelming objective: getting the budget back into surplus without increasing taxes to do it. Indeed, Joe Hockey is working towards the day when he can start cutting income tax. If you hadn't quite realised that, you could be forgiven. You've been unable to see it because of two distractors:...

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Less to the budget than meets the eye

The more of the budget's fine print I get through, the less impressed I am. It's not a budget so much as a flick-pass. On its main goal of returning to surplus, you can accept the plausibility of its projections that budget balance will achieved by 2018-19 without being terribly impressed by the quality of its claimed "structural" savings. The policy changes proposed yield savings over the four years to 2017-18 totalling...

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Budget's effect on economy: not as bad as it looks

The consumerist question about this week's budget is: how did it affect my pocket? The egalitarian question is: was its treatment of people at the bottom, middle and top reasonably fair? But the macro-economic question is: how will the budget affect the economy? We know the economy has been, and is expected to continue, growing at below its medium-term trend rate of about 3 per cent a year, the rate that keeps unemployment...

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Hockey's first budget: tough but unfair

This budget isn't as bad as Labor will claim and the Liberal heartland will privately think. It's undoubtedly the toughest budget since John Howard's post-election budget in 1996, but it's hardly austerity economics. I give Joe Hockey's first budgetary exam a distinction on management of the macro economy, a credit on micro-economic reform and a fail on fairness. Although Hockey has laboured hard to ensure few sections...

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Labor sells its soul to fight deficit levy

If you needed any convincing Labor is a party entirely adrift from its supposed values and purpose, given over now to politicking, expedience and opportunism, just wait for its reaction to Tuesday's budget. It will vehemently oppose Joe Hockey's deficit levy - no matter how watered down it is by then - and his intention to resume indexing the...

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Selfish pseudo-economics fights deficit levy

If you want to see a classic example of selfishness posing as high principle, look no further than the fuss big business's high income-earners are making over the deficit/debt levy/tax expected to be imposed in Tuesday's budget. Jennifer Westacott, of the Business Council of Australia, said "raising Australia's already high dependence on personal income tax will place an increased burden on workers [note that word] and...

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Business self-interest and economic ideology a good fit

We will hear a few toned-down echoes of the report of the National Commission of Audit in Tuesday's budget but, apart from that, the memory of its more extraordinary proposals is already fading. For most Coalition backbenchers, that can't come soon enough. But I think the audit commission has done us a great service. It has been hugely instructive. The business people and economists on the commission offered us a vision...

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Audit report: much ado about a manageable problem

Don't be too alarmed by the startling proposals by the National Commission of Audit. Few of its recommendations will make it into the budget on Tuesday week. They were never intended to. Ostensibly, the commission wants to reverse the tide of a century of federal-state relations, crack down on the age pension while leaving superannuation tax concessions unscathed, reduce Medicare to something mainly for the poor, hit middle-income...

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