More specifically, is the budget as painful as we were led to believe? And has the government broken any election promises?
PAIN FOR WHOM?
It was tipped to be the toughest budget since 1996, and news.com.au has bought into the narrative, leading the site with ‘The Hockey Horror Show: It’s time to Budget for pain’.
Painful budget measures include:
Tax: Higher income earners (people making more than $180,000) will pay a temporary budget repair levy of 2% for three years and the fuel excise will be indexed
Health: a $7 Medicare co-payment when visiting the GP and an increased cost to medicines and blood tests
Welfare:Family Tax Benefit Part B payments will be cut when youngest child turns six; unemployed people under 30 will be denied Newstart or Youth Allowance for six months; Work for the dole returns; Newstart age lifted to 34; Age of pension eligibility increased to 70 by 2035 and indexed to inflation
Public service: 16,500 public service jobes to be cut over three years; one year freeze on MP’s senior public servants’ salaries
But in many commentators’ eyes, the pain is not actually “across the board” as it was said to be. It is “A federal budget where some are more equal than others”, writes Adele Ferguson for the Sydney Morning Herald.
“Joe Hockey’s recurring chant that everyone must pucker up and ‘contribute now’ for the bitter medicine being served up in the 2014 federal budget smacks of George Orwell’s Animal Farm. As in Orwell’s satirical novel, where some are more equal than others, the ”contribution” Hockey calls on the country to make isn’t equal. It is about segregating the ”leaners” from the ”lifters”.”
The hallmark of the budget is that Australia will create the biggest medical research and endowment fund in the world. But National Political Editor for news.com.au, Malcolm Farr, writes “commitments to world-beating health research and giant urban road networks will be funded by cash taken from families.”
For Fairfax, Ross Gittins says the budget is tough and unfair and it’s business as usual: “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 of the community escape unscathed, the truth is most of us have been let off lightly.
“Only those people right at the bottom of the ladder have been hit hard – unemployed young people, the sick poor and, eventually, aged and disabled pensioners – but who cares about them? We’ve been trained to worry only about ourselves, and to shout and scream over the slightest scratch.”
BROKEN PROMISES?
Tony Abbott showed as opposition leader how potent a broken promise can be and in his budget speech, Joe Hockey said in relation to pensions “we promised not to change them and we won’t.”
But Malcolm Farr for News writes that Hockey “almost acknowledged the Government was going back on election promises on taxes and the age pension — but pleaded it had no choice.”
Political editor for The Age, Michael Gordon, writes “Joe Hockey gets a 10 for courage, an eight for fiscal responsibility and a three for keeping commitments.
“Whether Tony Abbott gets to implement his program across two terms (or more) will depend on whether voters agree that the pain being imposed has a purpose and forgive the multiple breaches of faith. Will they reward the courage or punish the infidelity?”
But Fairfax chief political correspondent Mark Kenny says the perception of a broken promise is a gamble the government is willing to take. “The harsh formula reveals the government has opted to prioritise its economic management credentials above delivering on its election promise of no new or increased taxes, and no cuts to health and education. In doing so it has made a calculated gamble that Australians will eventually reward it for fixing the balance sheet.”
DEBT & DEFICIT FIXED?
The budget forecasts that the nation’s deficit will be reduced to $29.8b in 2014-15 anf $10.6b in 2016-17.
But the connection between pain and the deficit has not convinced all analysts. The Guardian’s Political Editor Lenore Taylor writes that the “deep pain” that the Abbott government’s first budget inflicts on unemployed and sick people, students, pensioners and families “does little to strengthen the economy or quickly “repair” the budget.
This, she writes is because “the budget-night surprise was that much of the cash raised from cuts to benefits and tax rises is spent on the Coalition’s own priorities rather than on improving the budget bottom line, including a new $20bn medical research fund – to become the biggest in the world within six years – the Direct Action greenhouse emissions reduction fund and about $5bn in new roads funding.
The upshot, according to Taylor, is that the budget “delivers deep pain for little gain”.
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