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Budget

May 9th, 2007 at 09:13am

Yesterday I made a few predictions about the federal budget, and in a moment I will check my accuracy on those predictions, but first my overall opinion on the budget. Generally I was quite pleased with the budget, the surplus was a bit bigger than I expected, and as such so was the amount of spending, most of the cuts to income tax were expected, although perhaps a bit bigger than I expected towards the top end of the scale, and I shudder to think how much money the government can afford to lose in tax from the top two income tax brackets.

I was pleased to see a bunch of one off payments to a lot of people who would fall in to the lower tax brackets instead of massive tax cuts there, as tax cuts are permanent (relatively speaking), they cost money this year, next year, the year after that, etc etc etc. A lot of the one off payments are an awful lot larger than any tax cut would have been, and on a one-off basis, are sustainable. There is a bit of election grandstanding going on here, but overall the payments were targeted at those who really deserve a helping hand, and were well thought out. (OK, so 2GB and 2CC’s Jason Morrison did convince me of that one a little bit…I was thinking roughly the same thing last night but Jason ran through the economic arguments a whole lot better than I ever could have).

I thought education did pretty well, increased opportunities for teachers to study, and incentives to do so, something I think a lot of reports have been showing is lacking. The “coupons for tuition” idea is absolutely brilliant, and possibly the first real, widespread initiative, to do something useful with the data from the years 3, 5, 7 and 9 testing and benchmarking of students literacy and numeracy testing (although year nine is excluded from the scheme, I did think it should be included for at least the first two years of the scheme…or is the ACT the only place to test in year nine?).

I am a bit sceptical of the merits of the “extra money for schools that have a large increase in student performance” scheme, or at least I was, then I thought about all of the distant schools, especially aboriginal communities who could benefit from this…now if we could just convince the states to actually maintain the schools properly.

The thing that really interested me though (and people who heard me talking to 2CC’s Mike Jeffreys at 7:40 this morning can skip this section as you’ve already heard most of it) was the automated online tax returns. For once the hansard people at Parliament House don’t have proof hansard online so I’m unable to quote what treasurer Peter Costello said, but I’ll do my best to explain it.

Basically instead of filling out forms or going through the whole E-Tax process you just go the ATO website, presumably login somehow (probably the same way you verify your identity with E-Tax) and you are presented with a pre-made tax return produced by a computer (although Mr. Costello would have you believe the commissioner writes them all). This tax return will (theoretically) have all of your income, Centrelink payments, bank interest…in fact everything you would normally find on your tax return. All you have to do is review it and, if you agree with it, click submit, otherwise you can modify it to what you believe is correct.

I can see this working in one of two ways. Either it will be based on the tax paperwork filed by your employer(s), Centrelink, bank etc, which would effectively mean you would lodge your tax return some time later in the decade, or it would be linked the the government’s favourite little project, the National Access Card, or as I like to call it the “National Not An ID Card”…this is about the only way I can see this working with any kind of efficiency. I’m not going to go in to the whole debate about the card here (although you can feel free in the comments), but on the whole, with the proper safeguards, I have no problems with it, and this would be not only a good practical way to provide an extra service to the public, it would help to cut down on tax fraud, and save a whole lot of time and money on processing tax returns from individuals, and verifying them against business records.

Now, how did I go with my predictions:
Tax cuts: Yes, but not as minor as expected, half a point.
Infrastructure: Well they had the already announced Murray-Darling basin funding, and there was some stuff about water tanks…half a point
Education: Looks like a full point there
Environment: Bob Brown said $4 billion, Peter Costello said $4.3 billion. Add in rounding and it looks like I was overly cynical. No points on that.
Total: 2 from 4 or 50%, not too bad, if this were high school it would have just made it through as a pass. Of course if I only talk about my original predictions it’s 2 from 3, which is 67%. On the whole, pretty good.

So to briefly summarise this for those of you who didn’t feel like reading all of that, I’m 95% happy with the budget…I would have preferred a bit more spending on infrastructure, but overall I thought it was a very sensible and balanced budget once again from Peter Costello and his staff. A hearty congratulations are in order here, so well done. I will, much like last year, send a letter to that effect shortly (although last time I did send an email).

For those of you waiting to see how the public reacts to this…next week’s Newspoll is a waste of time as most of it will be done before people have had a chance to work out what the budget means to them. The week after that will start to show a trend, but it’s the one after that which really counts. The predictions I’ve heard this morning indicate that if there is between about an 8-10% “two party preferred” swing to the coalition, we will see an August election, and the coalition will be almost unbeatable. (And this comes from people at both ends of the spectrum).

Time will tell.

Samuel

Entry Filed under: General News,Samuel's Editorials

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3 Comments

  • 1. Samuel  |  May 9th, 2007 at 11:13 am

    For some reason, the moment I mentioned safeguards and the National Not An ID Card, I thought of an episode of yes Minister which fits the bill quite nicely, episode four of series one, Big Brother.

  • 2. Tim  |  May 9th, 2007 at 7:20 pm

    Great writeup – thanks for that. I haven’t had a chance to watch/read/listen to anything about the budget yet, so you’ve given me my first rundown of it.

    Automated online tax returns sound like a dream come true. I hate tax returns… and often get mine in on the 31st October or even during the week afterwards. :-/

  • 3. Samuel  |  May 9th, 2007 at 10:14 pm

    I’m glad you liked it Tim. It’s probably worthwhile catching up on the actual details of the budget (or at least the main points) though, as what I wrote was only an opinion piece and only covered a few select bits of the budget which interested me…I didn’t even mention the surplus!

    None the less, thanks for the feedback.


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