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Expect tax cuts and an emptying of the cupboards in a budget cleanout as the billions roll in

Warren Hogan writes in The Conversation (26.3.19) that, ahead of the Morrison government’s budget package, royalty and taxation revenue has been pouring in rapidly. The author suggests that Tuesday’s budget announcements will see the government spending that revenue almost as fast, leaving little for its successors.

‘It has been just over three months since the December budget update but once again the government has been gifted a windfall of unexpected revenues, despite a raft of economic data suggesting the economy has slowed its rate of growth.

‘This is because the things that really matter to the budget have all done better than was expected by the Treasury just months ago. Strong conditions in commodity markets and lower unemployment mean that in the current financial year the budget bottom line will be about A$3 billion better than had been expected in December, and about A$12 billion better next financial year.

‘Since the last budget only last May, the outlook for 2018-19 has improved by A$12.3 billion and the outlook for 2019-20 by $13.8 billion.

‘… We should expect a cascade of policy announcements culminating in a major tax cut to be revealed on budget night next Tuesday.’

Tax giveaways in Frydenberg’s ‘back in the black’ budget

Michelle Grattan writes in The Conversation (2.4.19) about the release of Coalition Treasurer Josh Frydenberg’s budget package, framed as an election eve ‘campaign booster’.

‘The Morrison government has delivered an election-launch budget with big personal income tax handouts to attract voters and a A$7.1 billion 2019-20 surplus to display its economic credibility.

‘The budget – the first brought down by Treasurer Josh Frydenberg – doubles the tax relief that average earners were due to receive within weeks, from $530 in last year’s budget to $1,080.

‘This outbids the relief that Labor promised last year. But the opposition immediately announced it would support the tax cuts that begin on July 1 “for working and middle-class people”.

‘“This is essentially a copy of what we proposed last year, and they are simply catching up to us,” Labor’s Shadow treasurer, Chris Bowen, and finance spokesman, Jim Chalmers, said in a statement.

‘… The ACTU slammed the budget as failing the fairness test. “It’s a cynical attempt to buy votes, but Morrison and Frydenberg are giving with one hand and taking away with the other”.’

Labor’s response to Coalition federal budget

Carol Johnson writes in The Conversation (4.4.19) that the Labor Party has signalled that equality and fairness will form the centrepiece of its policy framework – but there will be challenges to that approach if it wins office in May.

‘Bill Shorten’s 2019 budget reply speech has actually been years in the making.

‘Labor began to develop its economic policy arguments before the 2016 election campaign. Importantly, it aimed to reframe the conception of good economic management, so that it centred around producing fair and equitable outcomes.

‘Labor depicted itself as the party that would make the economy work for everyone, since even business would benefit from consumers having more money to spend. However, unlike the Liberals, Labor would stand up for ordinary working and middle class Australians against the big end of town.

‘Shorten’s budget reply speech reaffirmed those central messages, while painting a “big picture” (to use a Keating phrase) of the better future that Labor aimed to create if elected.’

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