Budget

The Federal Government has recently attacked British American Tobacco for using the image of a Kangaroo on its cigarette packages overseas. Attorney-General Nicola Roxon labelled it as “un-Australian” and demanded that the tobacco companies “get [their] hands off our icon”.

The government is indignant and says that the sale of cigarettes has nothing to do with Australia. Unfortunately that is not entirely true.

Almost $150 million of Australian tax dollars are currently invested in tobacco companies like Phillip Morris and British American Tobacco through the Future Fund.

Continue reading "The Government should give up the smokes" »

With the Federal Budget adjusted this week in an attempt to drag us back into the black, it’s time to go through government spending with a fine-toothed comb and pull back wherever we can. I’d like to help with this process if I can.

Wading through the bits of the 2011-2012 Budget that actually say actual things in actual English (that is, the bits that don’t say things like “continuing benefits to the bottom-line beyond the forward estimates”, which I assume means “um”) I was struck by some comparative numbers.

One of the numbers was $222 million, which has been earmarked to extend the National School Chaplaincy Program.

Continue reading "Government brushes holey molars for holy rollers" »

Yesterday’s mini-budget tells an economic story but it is primarily a political document.

Outwardly designed to position the nation against the turbulence of a troubled world, its real unspoken mission is positioning Labor for the 2013 election.

At its core is Julia Gillard’s fear that carrying even a small deficit into the election that year, which most economists say would be perfectly justified and even prudent, would allow Tony Abbott to say Labor had never delivered a surplus and never would.

Continue reading "A mini budget with an eye to a major electoral payoff" »

That 2012-13 projected Budget surplus of just $1.5 billion is tea money in Australia’s $1.2 trillion economy. If someone in Treasury has a whip-around to feed the parking meters the Budget could end up back in deficit.

Well, not quite, but the existence of the surplus - should it actually come into reality - will be that perilous, and perhaps that transitory.

But the fact its existence is contemplated at all is remarkable in a global economy where many industrialised nations are on the brink of recession and would be delighted with even a manageable budget shortfall.

Continue reading "Any surplus is a good surplus" »

Twenty years ago today, Muscovites awoke to tanks in their streets in a ill-fated coup against the modernising leader, Mikhail Gorbachev.

It was, it turned out, the last gasp of the hardliners and within months, Soviet communism was officially over.

Along with the collapse of the Berlin Wall two years before these events were viewed somewhat triumphally as the end of history. Indeed a book of the same name was a publishing sensation in the early 90s.

Continue reading "An island of calm amid global economic meltdown" »

If the price of freedom is eternal vigilance, for Canberra reporters this weekend the price of vigilance will mean surrendering their freedom - albeit temporarily.

The “lock-up” as it is known in Canberra parlance, will be in play this weekend to release the Government’s carbon tax / emissions trading plan.

Commonly deployed for the federal Budget, they work like this: Reporters agree to shed all communications devices, phones, wireless computer connections etc. and enter a secure windowless room in Parliament House for a period of several hours leading up the official public release of a policy or reform.

Continue reading "Carbon tax: A lock up or a stitch up?" »

Derryn Hinch won the Great Organ Gamble, scoring a life-saving liver. Many lose that lottery. Many people die waiting for organs.

The latest statistics, from the Australian & New Zealand Organ Donation Registry, show about 1600 Australians are waiting for organs – 176 for livers. More than 1140 for kidneys, 96 for hearts, 146 for lungs.

Hundreds die waiting. Demand exceeds supply. We can increase supply – by getting more people to sign up for organ donation and to make sure their families are aware of their wishes – but there won’t be enough any time soon.

Continue reading "I’ve got a hunch that Hinch is just the beginning" »

When Tony Abbott is scrambling for something new to say he can occasionally come up with pretty dubious statements. One outstanding example last week was his warning that the mining industry was fighting for survival.

This was a singular view of the fate of that billionaires’ collective. However, Prime Minister Julia Gillard has come to Mr Abbott’s rescue. She is prepared to offer the calculators of Treasury so that the Opposition will no longer have to struggle to find something fresh to say.

Mr Abbott will be able to speak about his own, fully-costed policies.

Continue reading "Abbott’s been freewheelin’ with the truth" »

For all its flaws, there is one thing this Labor Government can be proud of – a cohesive ability to ignore the reality of its spending addiction. 

I applaud every Labor Member of Parliament who has successfully stood in front of a camera and said with a straight face that Wayne Swan is a good economic manager. 

It must be tough, because a close look at the Budget’s spending column clearly proves otherwise. 

Continue reading "It’s about the spending, stupid" »

This was a different budget. The SA Budget papers were coated in soft blue hues and carried a picture of a nurse and a baby. Even before state Treasurer Jack Snelling opened his mouth yesterday to tell assembled reporters all about his first budget the message was clear. This is a different Treasurer and a new era.

The hard edges that so oftened characterised his predecessor Kevin Foley were to be buffed smooth by Snelling. Foley used to love Budget day. He would relish the battle with the media, jumping in boots and all, to defend, sell and promote his budget.

That was all very well in the days when the Rann Government was flying high. When elections were being won and the cash was rolling in from Canberra there was plenty to shout loud about.

Continue reading "Labor PR 101: It’s about families, stupid" »

Feel like your life lacks dignity, meaning and social inclusion?

The solution is easy. Simply take one full-time job and do it. All your problems – especially those stubborn, low self-esteem issues – will be solved in one fell swoop.

This is the rhetoric accompanying new, “tough love” Budget measures aimed at shifting single mothers and disability pensioners off welfare and into work.

Continue reading "Employment may not work for everyone" »

When the going gets tough, life only gets tougher. That’s the feeling among many voters after last week’s federal Budget.

In trying to spread the burden of cuts in order to return the economy to a fiscal surplus in two years, the Gillard Government’s self-proclaimed “tough” Budget managed to land a blow to almost everyone from the unemployed to double-income households.

But it was the effect on middle-class families that has become one of the main battlegrounds in the aftermath of this Budget, with plans to freeze family payments to families on a combined income of more than $150,000 a year - saving the Government $2 billion.

Continue reading "Tough times in taxpayer land? Only if you’re greedy" »

In sport, teams go to great lengths to paint themselves as the underdog. It’s a tired old tactic designed to lull the other team into unwittingly going a bit easier on them, and it rarely works.

The same principle has been eagerly adopted by families in the wake of this week’s budget, and the decision to freeze the indexing of family payments to families earning in excess of $150,000. And to some extent, the tactic appears to be working.

The logic of families at or just above the $150k threshold is pretty simple, and can be loosely summarised like this: We’re not rich. In fact, we’re struggling to get ahead. Gimme gimme gimme!

Continue reading "We’re not rich, we’re battling middle class welfare addicts" »

You might have picked up a theme in Wayne Swan’s fourth budget. It was tough. How do we know this? Because the government told us so.

In a major pre-budget speech, Treasurer Wayne Swan said “tough decisions are required” and “this will be a tough Budget.” Finance Minister Penny Wong, in an interview in the lead up to the budget, used the word “tough” more than ten times, including four times in one answer.

But did the reality match the rhetoric? In his budget speech, Swan announced $22 billion in “savings” over the next four years. Yet much of those so-called savings are actually tax increases like the flood levy, and regardless, they have been almost completely offset by increased spending in other areas. They’ve been roundly criticised already for failing to deliver a tough budget.

Continue reading "That’s not a tough budget - this is a tough budget" »

Well, it’s the morning after the night before! What’s your assessment of the Budget? Too tough? Not tough enough? Who missed out?

Weeks of drip-fed leaks failed to elicit much excitement about this budget, as Australia collectively rolled its eyeballs at the now-traditional claims that this was going to be the toughest of tough budgets. The general consensus seems to be that it could have gone further, pushed through some serious reforms, and Australia would’ve had some respect for it - instead of just pitying the poor thing.

Anyhoo, for all the latest news, head to news.com.au, where there’ll be graphs and experts and analysis and blogs, the budget speech video, and all sorts of goodness.

Continue reading "Budget 2011: Brickbats and bouquets" »

As we wait for Wayne Swan to announce his fourth budget deficit, here’s a small preview of what to expect. Warning:  the following contains plot spoilers.

Wayne will claim credit for the work of others, ignore his record and point to promises not achievements

Wayne Swan will try to take credit for outcomes built on economic reforms that he had nothing to do with, and in many cases opposed.

Continue reading "Spoiler alert: Here’s what to expect in the budget" »

Labor is frantically priming the electorate for a “tough Budget” and health and medical research has borne the brunt of the Government’s political posturing in recent weeks.

A strategic leak from the Gillard Government proposed a $400 million cut over three years only to be followed by unconfirmed reports of a back-flip. 

It is likely the Government was preparing the sector for a worse-case scenario before delivering lesser cuts with the headline message that they had spared research from the worst.  It remains a possibility.

Continue reading "Warning: Labor incompetence will damage your health" »

Wayne Swan could be forgiven if he puffed out his chest a little during a TV interview in New York couple of days ago.

“You’re a combination of what, in the US, would be Timothy Geithner and Joe Biden all in one person,” said CNBC business anchor Erin Burnett.

Geithner is the US Treasury Secretary, Biden the Vice-President. All Burnett was trying to do was explain Swan’s twin roles as Australia’s Treasurer and Deputy Prime Minister, but she made him sound like some kind of super-politician.

Continue reading "Super Swan ready to hang tough on Budget" »

Welcome to The Angry Cripple. Not very PC, is it?

As a person with a deep and personal interest in disability issues, I’m remaining anonymous so I can post not only my opinions, leaked documents and stuff that might otherwise get me in trouble, but also the opinions of other people with an interest. There will be guest columns by famous Australians, as well as ones written by my neighbours.

But mostly, the columns will feature me writing about things that make me angry, and why I reckon they should make you angry, too.

Continue reading "Yeah, maybe we SHOULD rethink disability spending" »

Middle income earners will contribute about $1 a week to a one-off levy on annual income with Julia Gillard today vowing Australia will “pay as we go” for urgent flood recovery work.

The Prime Minister announced a funding package of which two-thirds would come from spending cuts and one third from the levy of 0.5 per cent of taxable income for those earning more than $50,000 a year.

The Government will invest at least $5.6 billion in repairing damaged caused by floods in three states, with an immediate $2 billion going to Queensland, the worst hit state.

Continue reading "Gillard’s “pay as you go” strategy for flood recovery" »

So what is the Resource Super Profits Tax all about?  And what is a resource rent tax anyway? 

As it happens, I did a PhD in economics on these very questions, under the supervision of Professor Ross Garnaut.  And as an economic adviser to Resources and Energy Minister, Senator Peter Walsh in the Hawke Government, I had the opportunity to implement my PhD findings by helping design the Petroleum Resource Rent Tax in 1984.

Let’s start with resource rent.  Minerals like iron ore, coal, oil and gas possess two special features – they are non-renewable and deposits of them vary in quality and closeness to markets.  These features give rise to resource rent.

Continue reading "Going boom: the economic case for the mining tax" »

The Budget this week has me thinking about how no one likes their finances meddled with, especially given the prospect of more or increased bills. I’m no exception.

When they arrive in my letter box I’m instantly in a bad mood. I know they’re due but somewhere in the back of my mind I still hope that just once in my lifetime, the “systems” will go down and all the slates will be wiped clean. 

I find I’m actually quite defensive towards them.  I sometimes wonder if I were to tear it up, would anyone notice?

Continue reading "Love or loathe the budget, bills are the real enemy" »

The genius who first used the word “super” to describe the mining profits targeted by the Rudd government in its plan to return the budget to surplus should be given a promotion and a pay rise. Then the government should go out and hire another half dozen people with a similar flair for plain language.

The Resources Super Profits Tax is a rare example of a self-explanatory policy. It not only accurately describes the nature and spirit of the plan, but is infused with political clout. The underlying message is that “super profits” are somehow morally objectionable, compared to the regular kind. The National Health and Hospitals Network, by contrast, is a vague umbrella term for some health reforms.

But just how rare it is to find clarity in government communication is evident from the federal Budget. It is, as usual, filled with technocratic babble. Things aren’t bought, they are procured. Programs don’t end or stop, they are terminated. There is never a cut, but funding is reduced.

Continue reading "The one super phrase in a budget full of babble" »

As all the cool kids got themselves in a lather over last night’s budget I noticed a distinct void in the chatter.  Where were the mums and dads? Turns out that lots of them were watching Masterchef (possibly the people’s new opium) - studiously avoiding the budget telecast.

Political apathy seemed to be the flavour of the day, plated up and served with a side of Couldn’t Give a Shit.

Was it the fault of the no-frills budget? Or have we lost faith in a government which once seemed to promise so much?

Continue reading "Boring, unsexy: Who’d rather watch MasterChef?" »

If this Budget is supposed to get Australia doing its part in solving “the greatest moral challenge of our time”, then it is a failure. While there is $652 million over 4 years in new money for clean energy, this pales into insignificance compared with, for example, $27.7 billion over 6 years for roads.

As I said yesterday, this is a very unclear budget, lacking a clear strategy on energy and other resources.

Treasurer Wayne Swan said in his speech that climate change (which he mentioned 4 times)  is one of “three key challenges”  for the Budget, along with the return to full economic capacity after the GFC and and the costs of an ageing population. But the funding announced fell far short of this rhetoric.

Continue reading "Swan says climate is a key challenge but fails to meet it" »

The tax tables that tell you whether you’re better or worse off under the federal budget may need a new category this year. Alongside the “Couple, 60/40 income split, 2 kids” we’ll need “Couple, 60/40 income split, 2 kids, family smokes a total of 30 a day” because reports today suggest the government may mount an unprecedented tax assault on smokers to fund health reform.

As in most other countries the prevalence of smoking in Australia goes down as you go up the income scale. There’s no getting around this: a tax hike on smokers targets the most disadvantaged sections of society.

To which many non-smokers from all walks of life will respond: So what? It’s an offensive habit that causes revolting diseases which non-smoking taxpayers must pay to treat because chuffers don’t have the will power to quit.

Continue reading "Smokonomics" »

The experiments went like this. Scientists took pairs of people and gave one of them a big wad of money. Then they wired them up and watched what happened as more cash was handed out.

“People who started out rich had a stronger reaction to other people getting money than to themselves getting money,” Colin Camerer, one of the study’s coauthors, told the Freakonomics blog. “In other words, their brains liked it when others got money more than they liked it when they themselves got money.”

The science part: the circuitry of the brain’s reward centres is sensitive to inequality. The basic finding is that regardless of how much money you have, humans respond better to poor people getting money than rich people.

Continue reading "Are people hard-wired for income redistribution?" »

For a politician who prides himself on his relationship with Australian voters, Barnaby Joyce’s comments this week on foreign aid are, frankly, un-Australian.

Senator Joyce used a speech at the National Press Club yesterday to suggest that $50 million in aid that will help people with little or no food in poor countries deal with rising food prices should instead be spent on lowering food prices in Australia.

This year Australia’s foreign aid spending will total just $3.8 billion – or only about 0.35 per cent of our gross national income. That’s 35 cents in every $100. In the context of the Australian Government’s overall budget, we’re talking about a very small amount. Our Government has enough money to fund this, while also spending on essential services here.

Continue reading "Barnaby’s on his own with comments on foreign aid" »

Update 3pm: The RBA surprised everyone and left interest rates on hold today.

In recent years a horrendous new phrase has appeared to describe people struggling to make ends meet. They’re suffering from “mortgage stress.”

This week it was reported almost half of the young people who availed of the Rudd Government’s increased help for first-home buyers were suffering from this terrible condition. If true life will get a whole lot more stressful for them over the coming months as interest rates return to normal, starting most likely with a Reserve Bank announcement this afternoon.

Where did this “mortgage stress” phrase come from, anyway? It sounds like some kind of psychological disease that should be covered by Medicare. As far as I can tell what it actually means is you have borrowed too much money.

Continue reading "Are your stress levels going up with interest rates?" »

As we enter an election year it’s opportune to reflect on the Federal Government’s track record on petrol issues. In doing so, it will become very obvious that the Federal Government, like the previous government, has been fumbling the ball very badly on petrol issues and motorists are paying the price.

Let’s start when the Labor party was in opposition.

Grand promises were made and expectations raised amongst the voters that Labor was different to the then Coalition Government. Kevin Rudd, Wayne Swan and Chris Bowen promised us a “tough petrol cop on the beat.” Great, you may have thought! The only thing is that we already supposedly had a “competition cop” on the beat. It’s called the ACCC.

Continue reading "Canberra can do more to cut petrol prices" »

The Israeli political system is far from stable.  Robustly democratic sure. 

But since the advent of proportional voting for the Israeli Parliament - the Knesset - it has seen a revolving door of governments between Labor, the Likud and now Kadima, all having to govern in coalition with minor parties. 

Some would say that Israeli politicians and the Israeli public would wish for the stability that our voting system has delivered for a hundred years – but would they?
This may well be a case of ‘be careful what you wish for’. 
Because of the instability of the votes in the Knesset the government of Ehud Olmert failed to have their Budget passed by the Parliament for 2008-09. 

Continue reading "We’d be better off in Israel - they don’t need stimulus" »

We knew something was up when the party pies ran out. There was a whiff of the end of times that the cheap percolated coffee couldn’t quite hide.

And so it came to pass. The state Budget lock up was no more.

South Australia – first state to give women the vote, to ban plastic bags and forbid groups of people who ride motorcycles from hanging out together, has now become the first state to lose the lock up.

Continue reading "Fun it may be, but locking up journos is pointless" »