For families, the little things count in this budget
It was never going to be a bread-and-circuses affair but Wayne Swan’s third budget offers a little showbag of policy trinkets everyone gets to keep.
Just like the rise in cigarette tax, they are the kind of concrete changes that can make a government a real talking point in offices and over dinner tables. While not multi-billion-dollar headline initiatives, they offer voters little improvements that are, it has to be said, broadly agreeable.
First is the eHealth initiative. If you sign up it will put an end to the usual round of 20 questions about your medical history any time you see a new doctor. It’s totally optional and you can manage it yourself, so there’s little ground for the typical privacy objections raised against this kind of initiative.
It is decidedly not designed to be part of a system-wide information sharing to create efficiencies across GP practices and hospitals. Rather it’s a bit like an iPhone: a useful little gadget some people will enjoy having, if they’re confident they can handle it correctly.
There’s also what Swan calls the “tick and flick” tax returns system. From 2012 you’ll be able to claim a standard $500 deduction in your tax return, and it will increase to $1000 the following year. It’s a simple – and again, broadly unobjectionable – means by which the government can offer a little hard cash to voters over the coming years.
A side point, but Swan made a bizarre argument that the measure would somehow improve people’s work-life balance. “This means less time with the Tax Pack and more times with loved ones,” Swan said. It was a “key step towards a ‘tick and flick’ system of pre-filled tax returns that will make life easier for working families at tax time,” he added.
Now, how much time do tax returns actually take? Return Strain is hardly one of the key quality-of-life issues facing the country. Perhaps courtesy of the Treasurer every dad in Australia gets time to, say, go out the back yard and saw a plank in half.
It’s no election bribe but still, it’s a promise of extra cash in your pocket in a couple of years’ time.
There are other less agreeable changes likely to start making themselves felt over the coming months. One is a barrage of advertisements and marketing material aimed at selling the government’s health reform plan paid for by a $30m Budget provision. It’s likely to be seized on by the Opposition as blatant electioneering, though it’s not dissimilar to the Howard Government’s campaign to promote Work Choices.
The government’s plan to return the budget to surplus couldn’t be done without savings, and that means dropping some government programs. As you’d expect, he skated over the spending cuts by talking about how the government had “offset all new spending over the forward estimates” and “delivered net savings”.
Many of the spending cuts are about killing off or cutting back projects that weren’t working – like the $1 billion Green Car Innovation Fund, which has now become an $790m program.
Other spending cuts will be noticed in some families’ budgets. After abandoning the construction of 220 childcare centres the government has also decided to cap the child care rebate at $7500 and pause the indexation of the childcare rebate for four years. Translation: not as much money back on child care as some might have been expecting.
The government has also decided to scrap a program that offered payments of between $1500 and $5000 to people starting up a Family Day Care service. The saving will be $14.8 million.
$180 million has also been cut from the program that offers a $500 rebate on installing rainwater tanks in your house. As with the cuts to the green car program and the Family Day Care service the government says a lack of demand prompted the decision, but if you were planning to get that rainwater tank any time soon it might be worth checking to see if the cash will still be available.
The cuts are carefully identified, though, and won’t affect as many as stand to gain from Swan’s showbag of eHealth and tax return treats. The cap on government spending, combined with the global uncertainty surrounding Greece and the latest round of market instability, will also reduce the likelihood that the recent run of punishing interest rate rises will continue unabated.
Combine all this with the previously scheduled tax cut that kicks in from July this year and it all adds up to a low-profile package of sweeteners in the months running into an election. The Budget is not quite as small on politics as Swan would have us believe.
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