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Budget fears

By 29 April 2014 92

It seems to me that every day we are now hearing new ‘worst case’ scenarios in preparation for Joe Hockeys big moment in the sun.  Increased taxes, rising pension ages, changes to university funding – the list goes on (funnily enough no talk of changes to paid maternity leave which I find surprising).  It seems to me we are all in the firing line.

What do you think would be the worst case details for Canberra?  What are the areas to watch come budget night?  Is there anything you hope to see included?

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92 Responses to Budget fears
#1
Madam Cholet10:14 am, 29 Apr 14

‘Moment in the sun’…he’s the Treasurer, and bringing down the budget is what they do…every year. What government doesn’t leak and grandstand about any event, regardless of the good or bad news? Who’d be the Treasurer at this time of year? No end of groups trying to get to you, decisions no one wants to have to make. A totally thankless task.

Deloittes (I think it was them), last week said that pain for Canberra would not be as long lived as maybe first thought (better in the 14-15 financial year). My house price has tanked (I only know this through recent valuations and the news that everywhere else is doing great thanks very much) so I’m clinging to the possibility of a short-lived hit (with a massive recovery at the end!).

#2
farout11:11 am, 29 Apr 14

If they scrap or at least defer the PPL till the deficit it gone, it will make the rest of the pain more bearable.

Higher taxes are inevitable because no Govt has the guts to rein in middle class welfare. Yet they are all too quick to dole out taxpayers money.

My main gripe is that instead of a levy, it should be a normal tax increase staggered according to the tax levels. From today’s leak, it sounds like someone earning $79,900 will be better off than someone earning a round $80,000 because the former pays zero levy but the latter pays $800. The increase/levy should be x% of the amount above $80,000 or whatever. Also, why stop at 2% above $130K, why not 3% above 350K and 4% above 500K?

#3
dungfungus11:27 am, 29 Apr 14

Madam Cholet said :

‘Moment in the sun’…he’s the Treasurer, and bringing down the budget is what they do…every year. What government doesn’t leak and grandstand about any event, regardless of the good or bad news? Who’d be the Treasurer at this time of year? No end of groups trying to get to you, decisions no one wants to have to make. A totally thankless task.

Deloittes (I think it was them), last week said that pain for Canberra would not be as long lived as maybe first thought (better in the 14-15 financial year). My house price has tanked (I only know this through recent valuations and the news that everywhere else is doing great thanks very much) so I’m clinging to the possibility of a short-lived hit (with a massive recovery at the end!).

I am sure the homeless will feel your pain in knowing your house price has tanked.
No doubt they will be elated for you when there is a massive recovery.
Your self-interest makes me puke.

#4
farout11:40 am, 29 Apr 14

I certainly hope the ‘deficit levy’ applies to companies and trusts, in addition to individuals.

#5
magiccar912:30 pm, 29 Apr 14

Anyone stopped to ask themselves why we’re in the situation anyway?

We can all blame the current Government at the time – be it Labor or Liberal – but we never hold previous Governments accountable for the trouble they cause.

This trouble hasn’t stemmed from recent choices, it’s stemmed from choices made 2,3,4,5 + years ago.

We all need to quit complaining about it too. There isn’t anything we can do about it, so just pay up and shut up.

#6
dungfungus12:59 pm, 29 Apr 14

farout said :

I certainly hope the ‘deficit levy’ applies to companies and trusts, in addition to individuals.

Will it be tacked onto the Medicare levy (like the Qld. Flood Levy)?
If it is, then all those with no taxable income who aren’t obliged to submit a tax return and subsequently do not get an assessment will be exempt.
This could exclude from the levy all those filthy rich self-funded retirees and even the Governor General.

#7
Madam Cholet1:20 pm, 29 Apr 14

dungfungus said :

Madam Cholet said :

‘Moment in the sun’…he’s the Treasurer, and bringing down the budget is what they do…every year. What government doesn’t leak and grandstand about any event, regardless of the good or bad news? Who’d be the Treasurer at this time of year? No end of groups trying to get to you, decisions no one wants to have to make. A totally thankless task.

Deloittes (I think it was them), last week said that pain for Canberra would not be as long lived as maybe first thought (better in the 14-15 financial year). My house price has tanked (I only know this through recent valuations and the news that everywhere else is doing great thanks very much) so I’m clinging to the possibility of a short-lived hit (with a massive recovery at the end!).

I am sure the homeless will feel your pain in knowing your house price has tanked.
No doubt they will be elated for you when there is a massive recovery.
Your self-interest makes me puke.

At which point did I say ‘stuff the homeless, save my house price’? It was an example of the effect of the pain already being inflicted on Canberra. I could be housing homeless people left right and centre in my small 3 bedroom suburban work in progress for all you know. And if I got on and gloated about my house price rocketing would you still have had your whinge at me? I think so.

But what is me not saying anything about my house price going to do for the homeless? I have a well paying job, I pay my taxes, I pay my bills, I own an investment property, I donate to charity, stumped up money for the QLD flood through my taxes and will take the NDIS hit in my tax return I assume, etc etc. I therefore contribute everything that I am supposed to and more. Stop looking over your shoulder and concentrate on your own shortcomings.

I was pointing out the fact that Deloittes or whomever said it, assessed it as short term pain whatever the budget throws up.

#8
gazket4:10 pm, 29 Apr 14

when Labor leave a black hole of debt and lie for 6 years about surpluses expect some cutbacks. The debt averages out to every household owes $25k with nothing to show for it. When Rudd/Gillard came in every house hold had $2K of savings with nothing to show for it.

Get ready for more pain when Rattenburger and Labor borrow more money to waste .

#9
Rollersk8r4:24 pm, 29 Apr 14

I think (hope) it’s the standard routine of delivering months and months of bad news to make the budget look nowhere-near-as-bad-as-it-could-have-been when finally announced.

Still, I’m sick and tired of everything being a GFC emergency, a climate change emergency, a budget emergency, an aging population emergency…

#10
switch5:11 pm, 29 Apr 14

Rollersk8r said :

I think (hope) it’s the standard routine of delivering months and months of bad news to make the budget look nowhere-near-as-bad-as-it-could-have-been when finally announced.

Still, I’m sick and tired of everything being a GFC emergency, a climate change emergency, a budget emergency, an aging population emergency…

I wish, amongst all the budget kite-flying we’re copping right now, there’d be a few announcements like “politicians will forego their extraordinarily generous entitlements and super, along with not voting themselves a pay-rise for the next few years.”

Pigs are fuelled and ready to fly…

#11
Comic_and_Gamer_Nerd9:30 pm, 29 Apr 14

gazket said :

when Labor leave a black hole of debt and lie for 6 years about surpluses expect some cutbacks. The debt averages out to every household owes $25k with nothing to show for it. When Rudd/Gillard came in every house hold had $2K of savings with nothing to show for it.

Get ready for more pain when Rattenburger and Labor borrow more money to waste .

Source?

#12
harvyk110:13 pm, 29 Apr 14

dungfungus said :

I am sure the homeless will feel your pain in knowing your house price has tanked.
No doubt they will be elated for you when there is a massive recovery.
Your self-interest makes me puke.

and how many of those people are homeless because the gov’t of the day decided Canberra’s public servants are overpaid and worthless and thus sent in razor gangs whilst at the same time the gov’t was crying over a small group of workers in a doomed industry in “Real Australia”?

#13
bigfeet10:38 pm, 29 Apr 14

Comic_and_Gamer_Nerd said :

Source?

Damn, I hoped I would never see that again.

#14
magiccar911:07 pm, 29 Apr 14

Comic_and_Gamer_Nerd said :

gazket said :

when Labor leave a black hole of debt and lie for 6 years about surpluses expect some cutbacks. The debt averages out to every household owes $25k with nothing to show for it. When Rudd/Gillard came in every house hold had $2K of savings with nothing to show for it.

Get ready for more pain when Rattenburger and Labor borrow more money to waste .

Source?

Um, I’d say looking at the last 6 odd years of history is a good source…. You’d be blind not to see at least a little bit of accuracy.

#15
miz11:35 pm, 29 Apr 14

gazket, no one would complain about cutbacks or increased taxes if they were fair. I’d gladly pay a doubled Medicare levy for hospitals, but I don’t see why I should now pay more for an unfair PPL or tax breaks for the wealthy.
Unfortunately this govt seems intent on unpicking the things that even up the playing field – diddling public schools (Gonski), messing with uni funding (flagging an intention to make our system like the most unequal place in the world – the US), talking of cutting pensions but reinstating super tax lurks for the very wealthy, introducing co-payments for bulk billing (which will only affect really poor people) – are you sensing a theme here? Not to mention the BS about a budget emergency. You would only believe that if you don’t listen to international economic commentary, which consider Australia to have a gold standard economy with very low debt levels. You should get out more.
Face it, this govt is hardline economic rationalist, considering that circumstances are completely the ‘choice’ of the individual – so difficult circs (e.g. disabled child preventing you from working) is actually all your own fault so suffer baby, and on the flip side, the wealthy are the only deserving people on the planet. They do not really care about ordinary struggling people, only their wealthy friends like the Packers and Rineharts, and clearly think the country would be a better place if they – the entitled – are in charge. They actually let that slip before the election (‘the grown ups are in charge’), but no one recognised it for what it was. God I truly hope they are a one term wonder…

#16
housebound7:21 am, 30 Apr 14

Sometimes, when you borrow money, you have to pay it back.

Our household got a few big fat cheques in the mail a few years ago – for nothing we did or deserved. Now it’s time to send them back.

#17
bigfeet8:08 am, 30 Apr 14

housebound said :

Sometimes, when you borrow money, you have to pay it back.

Our household got a few big fat cheques in the mail a few years ago – for nothing we did or deserved. Now it’s time to send them back.

Anyone who received any part of the stimulus package should be advised ‘You are stimulated enough. In your next tax return we will be recouping that money. It was only a temporary measure.”

After that anyone who received flood/bushfire money should start paying it back, as well as farmers who were subsidised for ‘bad years’. If they are starting to make a profit, time to start paying it back.

#18
p19:05 am, 30 Apr 14

bigfeet said :

housebound said :

Sometimes, when you borrow money, you have to pay it back.

Our household got a few big fat cheques in the mail a few years ago – for nothing we did or deserved. Now it’s time to send them back.

Anyone who received any part of the stimulus package should be advised ‘You are stimulated enough. In your next tax return we will be recouping that money. It was only a temporary measure.”

After that anyone who received flood/bushfire money should start paying it back, as well as farmers who were subsidised for ‘bad years’. If they are starting to make a profit, time to start paying it back.

I tend to agree. The problem however, is that things aren’t as good now as they were during the second half of Howard’s time, or the first half of Rudd’s. The mining boom isn’t as booming as it was. The GFC did slow down the world economy (regardless of what you think about stimulus here). We can’t sell Telstra, or airports, because that is what Howard did to put Rudd in a starting position of no debt.
The time to ‘pay back’ was when things were as rosy as possible. But there was no suggestion of cutting middle class welfare then. Howard cracked down on dole bludgers. The ‘Big New Tax on Mining’ was an attempt at reaping some of that cream from the good time, but in typical Rudd megalomaniacal style, it was rushed and got too many people offside contributing to his demise, and in typical Gillard fashion was watered down trying to please people who would only ever have been happy with its complete removal.
While I wonder if Hockey’s ‘budget emergency’ is as evil as it sounds, it all seems a little like waiting until you lose your job, then saying ‘ermahgerd, better be responsible and start paying off the credit card…’
I shall now end my rambling, directionless rant, and let you return to everyone else’s spray.

#19
HiddenDragon9:56 am, 30 Apr 14

I’d say get used to it. Even if the Abbott Government turns out to be a one term wonder, a subsequent Labor or Labor/Green(?) government will have little scope to spend up in a way that will benefit Canberra. Falling terms of trade, the retirement of the baby boomer cohort, and highly indebted Australian households mean that the sources of previous economic “growth” and consequent government revenue windfalls are no longer available – all the signs are that things will be constrained (at the least) for many years to come.

If the Coalition gets a second or third term, the federalism review also has obvious risks for Canberra. Some functions might be centralised (but that does not necessarily mean more federal jobs and spending in Canberra) but it seems likely that more functions will be devolved to the States and Territories with far fewer officials needed in Canberra to keep an eye on things.

#20
wildturkeycanoe10:01 am, 30 Apr 14

I am not fearing the budget because it has already done its damage. Has anyone else noticed how the entire construction industry has suffered in the last 12 months or more from the apprehension of government changing hands and spending being tightened until future details are released? Just look how many electrical contracting firms closed up shop and left Canberra or dissolved entirely. Building construction companies struggle to find work, undercutting one another to below cost price if only to keep their guys employed till things pick up. Drafting firms report the same, having not enough domestic housing to keep themselves busy.
Source – personal experience from having spoken to people in the industry over the last 6 months whilst trying to find work and hearing first hand how badly it has hit our big employers.
All of this is exasperated by the sacking of public service staff, who flood the job markets that already suffer due the lack of consumer confidence. I mean, having 80 applicants for one recruitment role shows how many out there are trying to find work at the moment and that is the same story for all the jobs out there right now. Competition is tight whilst government spending isn’t happening. Even government jobs are being closed to the public and only being offered to previous employees.
House prices dropping someone mentioned? Another piece of evidence to show that the budget outcome isn’t the killer, it has already done the job long ago.
I am looking forward to the budget’s release so that we know where and when the money is going to be spent and business picks up again. If there isn’t any extra money, well, nothing really changes in Canberra except we tighten the belt a bit more.

#21
JC10:58 am, 30 Apr 14

magiccar9 said :

Anyone stopped to ask themselves why we’re in the situation anyway?

We can all blame the current Government at the time – be it Labor or Liberal – but we never hold previous Governments accountable for the trouble they cause.

This trouble hasn’t stemmed from recent choices, it’s stemmed from choices made 2,3,4,5 + years ago.

We all need to quit complaining about it too. There isn’t anything we can do about it, so just pay up and shut up.

Actually the core issue relates to decisions made 10-15 years ago under Howard, specifically income tax cuts (read re-election bribes). Turning those cuts around will never win a party government.

Indeed Howard and Costello introduced the intergeneration report that as far back as then has highlighted the fact that over the coming years tax rates need to rise to cover the aging population, there is only so much that cuts to government can cover.

Both sides of politics have to date ignored the obvious, so credit to Abbott and co for at least addressing it. But trying to blame decisions made by Labor during the GFC (which kept the country afloat) is ignoring and misleading the population about the core cause of the problem which is aging population putting more demand on services and less workers to cover the cost of the demands. I also don’t like the fact that they didn’t take these plans to the electorate at the election. Instead they will make excuses that they didn’t know how bad things were etc, which is all total BS that they should be called on. Again the intergeneration report, which has been public for years and regularly updated is in the public domain.

#22
VYBerlinaV8_is_back12:13 pm, 30 Apr 14

The problem as I see it is that the media has popularised economic management by government, meaning that government now makes decisions to appeal an electorate that, by and large, has no real understanding of how government economics actually work.

I’ve seen ridiculous comparisons, such as comparing government debt to the household mortgage. Such comparisons are pretty well meaningless.

What we should be focussing on is maintaining high employment and continual productivity gains. If anything, we should be borrowing to spend on major infrastructure and productivity related projects, while interest rates are so low.

There are problems, though, such as Australians’ very high incomes which, in conjunction with cheap credit, have led to cost of living increases, and property price increases.

Personally, I focus more on the economy of my immediate family, and ensuring that we consistently spend less than we earn, invest consistently, maintain professional skills that are both marketable and in demand, and ensure our children are well provided for in terms of education and experiences.

The economy ebbs and flows over the years and decades, this is actually very normal. As individuals we need to take responsibility for ensuring we take care of ourselves and our families.

#23
rosscoact1:00 pm, 30 Apr 14

Why isn’t Abbott calling the liar’s tax ‘A Great Big New Tax’? I thought that’s what the muppets did.

#24
dungfungus3:52 pm, 30 Apr 14

JC said :

magiccar9 said :

Anyone stopped to ask themselves why we’re in the situation anyway?

We can all blame the current Government at the time – be it Labor or Liberal – but we never hold previous Governments accountable for the trouble they cause.

This trouble hasn’t stemmed from recent choices, it’s stemmed from choices made 2,3,4,5 + years ago.

We all need to quit complaining about it too. There isn’t anything we can do about it, so just pay up and shut up.

Actually the core issue relates to decisions made 10-15 years ago under Howard, specifically income tax cuts (read re-election bribes). Turning those cuts around will never win a party government.

Indeed Howard and Costello introduced the intergeneration report that as far back as then has highlighted the fact that over the coming years tax rates need to rise to cover the aging population, there is only so much that cuts to government can cover.

Both sides of politics have to date ignored the obvious, so credit to Abbott and co for at least addressing it. But trying to blame decisions made by Labor during the GFC (which kept the country afloat) is ignoring and misleading the population about the core cause of the problem which is aging population putting more demand on services and less workers to cover the cost of the demands. I also don’t like the fact that they didn’t take these plans to the electorate at the election. Instead they will make excuses that they didn’t know how bad things were etc, which is all total BS that they should be called on. Again the intergeneration report, which has been public for years and regularly updated is in the public domain.

The audit report will be released tomorrow; we will see how bad things are then.
BTW, the GFC was confined to the Northern Hemisphere, Rudd used it as an excuse to waste money.

#25
Roundhead897:51 pm, 30 Apr 14

Remarkable how the F word has made a comeback since the debate over the tax levy started. Families. “The tax will hit families”, “Families will be worse off”. I even heard that goose Ray Hadley read out an email saying that if the tax comes in the writer won’t be able to buy 1000 nappies over the following year. Diddums. If you can’t afford to have babies, don’t. Don’t go running off to politicians demanding tax breaks, Baby Bonuses and an easy ride just because you choose a lifestyle which involves procreation. The fact is we are in this mess – not because of Rudd and Gillard – but because of the tax cuts, middle class welfare and constant pork barreling of the Howard government which squandered the proceeds of the mining boom and China boom. It was excascerbated by the big spending Rudd and Gillard governments and their obsession with huge, unrepealable legacy programs such as the NBN, NDIS, Climate change and other nonsense which we cannot afford and which nobody wanted.

#26
magiccar99:53 pm, 30 Apr 14

Roundhead89 said :

Remarkable how the F word has made a comeback since the debate over the tax levy started. Families. “The tax will hit families”, “Families will be worse off”. I even heard that goose Ray Hadley read out an email saying that if the tax comes in the writer won’t be able to buy 1000 nappies over the following year. Diddums. If you can’t afford to have babies, don’t. Don’t go running off to politicians demanding tax breaks, Baby Bonuses and an easy ride just because you choose a lifestyle which involves procreation. The fact is we are in this mess – not because of Rudd and Gillard – but because of the tax cuts, middle class welfare and constant pork barreling of the Howard government which squandered the proceeds of the mining boom and China boom. It was excascerbated by the big spending Rudd and Gillard governments and their obsession with huge, unrepealable legacy programs such as the NBN, NDIS, Climate change and other nonsense which we cannot afford and which nobody wanted.

Nailed it!

#27
JC12:08 am, 01 May 14

dungfungus said :

JC said :

The audit report will be released tomorrow; we will see how bad things are then.
BTW, the GFC was confined to the Northern Hemisphere, Rudd used it as an excuse to waste money.

If it was a northern hemisphere thing then it would have been called a NHFC, not a GFC. The G in GFC is for GLOBAL.

Whilst I will agree Australia didn’t feel it as much, the worlds economic leaders have stated it was due to the fiscal policies of the Labor government in charge at the time.

You can disagree with the latter, but trying to say the GFC wasn’t global, pull the other one.

#28
JC12:14 am, 01 May 14

Roundhead89 said :

The fact is we are in this mess – not because of Rudd and Gillard – but because of the tax cuts, middle class welfare and constant pork barreling of the Howard government which squandered the proceeds of the mining boom and China boom. It was excascerbated by the big spending Rudd and Gillard governments and their obsession with huge, unrepealable legacy programs such as the NBN, NDIS, Climate change and other nonsense which we cannot afford and which nobody wanted.

You should have stopped at the tax cuts as lack of income is the core issue as identified by the first Costello intergenerational report.

The big spending of Labor a you so put it is a drop in the ocean compared to the lack of income. Though for the record you mention NBN and NDIS, well NBN wasn’t actually being funded by consolidated revenue, so had very little effect on past budgets, and NDIS was a reorganisation of existing funding between Commonwealth and the States plus some new funding, very little of which has come to fruition. So neither has really had an impact on the budget bottom line. And speak for yourself when it comes to NBN and NDIS, this little black duck supported both.

#29
house_husband7:16 am, 01 May 14

VYBerlinaV8_is_back said :

I’ve seen ridiculous comparisons, such as comparing government debt to the household mortgage. Such comparisons are pretty well meaningless.

I agree that direct comparisons between government/business/household debt have their problems. In both business and government there are often different reasons for borrowing (you need to spend money to make money, build critical infrastructure, etc).

However for many people government debt is an abstract concept so sometimes you need to remind people the money is real, it needs to be repaid and borrowing for things like funding early retirements (e.g Greece) is always going to end badly.

#30
wildturkeycanoe7:58 am, 01 May 14

Looking up foreign debt on the internet it appears every country in the world has a substantial foreign debt except for a couple. If everybody owes money to everyone else, how does that add up? Who ends up with it if everybody actually pays off their debt? Must be one or two very wealthy countries that have a lot of leverage with the favors they’ve given.
Why doesn’t the entire world just clean the slate till we get countries that have no debt, then look at how much we actually owe. I’m no mathematician, but in a room of four people if each owed around 3 or 4 dollars to each other, it wouldn’t be difficult to work out by paying each other in theory to see who ends up still owing and who has a surplus without changing any cash.

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