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May 10, 2006
The editorial in the Sydney Morning Herald says that the 'overwhelming emphasis of the budget is on tax cuts, to be introduced from July 1. At the height of a once-in-a-lifetime boom in commodity exports it is a risky strategy, devised under pressure. It reveals a Treasurer who may want to make gestures towards building Australia's coming years, but whose focus is fixed on the politics of the present.'
Alan Moir
A fair enough comment? The Canberra Times says that 'Peter Costello has gone further than most commentators expected in attacking tax rates, and in lowering top rates, but the fundamental task of reform is still ahead of him, something manifest as well in the way government has plenty of money in the kitty for later stages of the electoral cycle.'
There is a developing consensus on this is there not? It provides plenty of oportunities for the Opposition Leader to use his budget reply to talk about the economy's long-term future, education and the need to tackle structural weaknesses in the economy, especially in the area of skills. Or will the ALP be left exposed?
Update:11 May
Tim Colebatch in The Age makes some good points. He says:
What we needed from this budget, now more than ever, was a policy shift back to basics. We needed to build up the country's capacity to earn its way in the world, after the worst period of export growth in its post-war history.That means increasing spending on skills, education and training, export support, industry development and infrastructure, the drivers of future growth.
This budget spends $11.6 billion of new money in 2006-07 alone, but hardly any of that is being spent where it will increase Australia's capacity to export. There is $400 million of new investment, mostly on highways, $20 million a year extra for apprenticeships, nothing at all to lift exports, and apart from more generous depreciation rates, little for manufacturing.
By contrast, there are income tax cuts worth $9 billion a year and hundreds of new spending initiatives cumulatively costing us billions of dollars in such areas as defence, security, and fraud control.This is a Government in economic drift. It is awash with tax revenues, yet it is so obsessed with buying votes that it is prepared to burn our future rather than build it. What a waste.
A good critique isn't it.
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Tim Colebatch from The Age is even more scathing:
There may have been worse budgets than this one for their times, but they were long ago. The last was probably 1974, when the Whitlam government refused to let a minor detail like double-digit inflation get in the way of its spending plans.
This budget, like the last few, was presented by Peter Costello, but bears the imprint of John Howard vote-buying at full speed. It ignores minor details such as record current account deficits and dependence on foreign debt, to hurl money at marginal voters, core Liberal constituencies, favoured business interests and ageing Australians alike……
This is a Government in economic drift. It is awash with tax revenues, yet it is so obsessed with buying votes that it is prepared to burn our future rather than build it. What a waste.