This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/australia-news/commentisfree/2018/may/08/will-a-splash-out-budget-be-reckless-vote-buying-or-prudent-economic-management
The article has changed 3 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Will a Splash Out budget be reckless vote-buying or prudent economic management? | Will a Splash Out budget be reckless vote-buying or prudent economic management? |
| (about 1 month later) | |
| Tonight’s federal budget (aka Splash Out 2018) is the Turnbull government’s last roll of the dice. | Tonight’s federal budget (aka Splash Out 2018) is the Turnbull government’s last roll of the dice. |
| Having tried and failed to excite public confidence with its 2016 Visionary Budget and its 2017 Fairness Budget tonight’s budget is looming as the Splash Out (Do Anything to Regain Poll Momentum) Budget. | Having tried and failed to excite public confidence with its 2016 Visionary Budget and its 2017 Fairness Budget tonight’s budget is looming as the Splash Out (Do Anything to Regain Poll Momentum) Budget. |
| If the ritual pre-budget leaks are to be believed the centrepiece of Splash Out 2018 will be judicious tax cuts, money for older Australians (ie the Coalition base) and big infrastructure projects where they are most needed (ie marginal seats). | If the ritual pre-budget leaks are to be believed the centrepiece of Splash Out 2018 will be judicious tax cuts, money for older Australians (ie the Coalition base) and big infrastructure projects where they are most needed (ie marginal seats). |
| Yet to be revealed is whether the treasurer Scott Morrison goes all out in the Splash Out and trashes his stalled tax cuts for big business or continues to hold out hope for corporate Australia that there is light at the end of the royal commission. | Yet to be revealed is whether the treasurer Scott Morrison goes all out in the Splash Out and trashes his stalled tax cuts for big business or continues to hold out hope for corporate Australia that there is light at the end of the royal commission. |
| Sign up to receive the latest Australian opinion pieces every weekday | Sign up to receive the latest Australian opinion pieces every weekday |
| But beyond its component parts, the prize for landing Splash Out 2018 is to regain the central political narrative – that the Coalition is the superior economic manager. This storyline casts the Splash Out not as some reckless vote-buying exercise, but rather a dividend to Australian voters straight from their prudent economic managers in Canberra. | But beyond its component parts, the prize for landing Splash Out 2018 is to regain the central political narrative – that the Coalition is the superior economic manager. This storyline casts the Splash Out not as some reckless vote-buying exercise, but rather a dividend to Australian voters straight from their prudent economic managers in Canberra. |
| In a perfect world for the Coalition the next few weeks will be dominated by stories about “how much will I get?”, reducing the political project to a simple financial transaction between government and voter. | In a perfect world for the Coalition the next few weeks will be dominated by stories about “how much will I get?”, reducing the political project to a simple financial transaction between government and voter. |
| This was the electorally successful but fiscally disastrous model of the Howard-Costello government through the last boom, when any additional money was sent straight to the voter in the form of a direct payment or personal tax cut. Ask not what you can do for your country, but what your country will pay back to you, became the central operating principle. | This was the electorally successful but fiscally disastrous model of the Howard-Costello government through the last boom, when any additional money was sent straight to the voter in the form of a direct payment or personal tax cut. Ask not what you can do for your country, but what your country will pay back to you, became the central operating principle. |
| Turnbull and team are banking on Australians being similarly open to a financial transaction this time around. Ask the public though - and we did in this week’s Essential Report – and the theory doesn’t quite stack up. | Turnbull and team are banking on Australians being similarly open to a financial transaction this time around. Ask the public though - and we did in this week’s Essential Report – and the theory doesn’t quite stack up. |
| Given an uptake in revenue, a majority of voters would rather see increased funding for services and job-creating investments than personal tax cuts and infrastructure spending. | Given an uptake in revenue, a majority of voters would rather see increased funding for services and job-creating investments than personal tax cuts and infrastructure spending. |
| More tellingly, for a personal tax cut to have any real impact on most voters’ minds it would have to come in well above the mooted $10.50 a week reduction. | More tellingly, for a personal tax cut to have any real impact on most voters’ minds it would have to come in well above the mooted $10.50 a week reduction. |
| In fact, to go close to catching most voters’ attention, the cut would need to be in the range of $25-$35 per week. | In fact, to go close to catching most voters’ attention, the cut would need to be in the range of $25-$35 per week. |
| The problem for Morrison et al is that any cut in this range will impact on their ability to control the budget deficit over the long-term, undermining its attempt to cast themselves as the superior economic managers. Fiscal catch-22. | The problem for Morrison et al is that any cut in this range will impact on their ability to control the budget deficit over the long-term, undermining its attempt to cast themselves as the superior economic managers. Fiscal catch-22. |
| For Labor the budget sets down a different set of challenges. | For Labor the budget sets down a different set of challenges. |
| Having made the hard political decisions to rein in negative gearing, dividend and family trust tax concessions, while opposing the corporate tax cut, Labor has a much larger war chest to play with. | Having made the hard political decisions to rein in negative gearing, dividend and family trust tax concessions, while opposing the corporate tax cut, Labor has a much larger war chest to play with. |
| There is no reason to think opposition leader Bill Shorten won’t match or even better the Coalition tax cuts in his reply, particularly those targeted at low and middle incomes earners. | There is no reason to think opposition leader Bill Shorten won’t match or even better the Coalition tax cuts in his reply, particularly those targeted at low and middle incomes earners. |
| While it is true that treasurer Morrison will be able to intone that Labor’s net tax take will be larger, that’s because it has closed a bunch of loopholes exploited by canny tax lawyers (whose deductions will also not be capped) and increased the threshold for very high earners. While Morrison will chant “you will pay more under Labor”, the response “who will pay more under Labor?” should easily defuse that attack. | While it is true that treasurer Morrison will be able to intone that Labor’s net tax take will be larger, that’s because it has closed a bunch of loopholes exploited by canny tax lawyers (whose deductions will also not be capped) and increased the threshold for very high earners. While Morrison will chant “you will pay more under Labor”, the response “who will pay more under Labor?” should easily defuse that attack. |
| But that’s not Labor’s biggest challenge; the real win for Labor will be its ability to match the Coalition budget and then – rather than spend the next few months playing “my tax cut is bigger than your tax cut” – move the story back to where it’s been for the past 31 Newspolls: economic representation. | But that’s not Labor’s biggest challenge; the real win for Labor will be its ability to match the Coalition budget and then – rather than spend the next few months playing “my tax cut is bigger than your tax cut” – move the story back to where it’s been for the past 31 Newspolls: economic representation. |
| That’s the storyline that has powered the Shorten opposition – a royal commission into the banks, capping private health rebates, supporting fairer workplace laws, protecting Medicare, funding schools, ending the two-class tax system and opposing corporate tax cuts. | That’s the storyline that has powered the Shorten opposition – a royal commission into the banks, capping private health rebates, supporting fairer workplace laws, protecting Medicare, funding schools, ending the two-class tax system and opposing corporate tax cuts. |
| Regular readers of my columns will know I have only one immutable rule of politics, the Fingerhut effect, which holds that when the issue is “economic management”, conservatives thrive, and when the frame is economic representation, progressive do better. Splash Out 2018 is Fingerhut in sharp relief. | Regular readers of my columns will know I have only one immutable rule of politics, the Fingerhut effect, which holds that when the issue is “economic management”, conservatives thrive, and when the frame is economic representation, progressive do better. Splash Out 2018 is Fingerhut in sharp relief. |
| Voters rank hospital and school funding above tax cuts – Guardian Essential poll | Voters rank hospital and school funding above tax cuts – Guardian Essential poll |
| A final question in this week’s report shows expectations of the Splash Out are similarly framed – a budget for the well-off, and business, maybe even the economy overall – but definitely not for us personally. | A final question in this week’s report shows expectations of the Splash Out are similarly framed – a budget for the well-off, and business, maybe even the economy overall – but definitely not for us personally. |
| For Splash Out 2018 to land, the government progressives will have to grab onto it and wrestle with it for as long as there is a cheap jibe from Scott Morrison or a monotonal core message from Mathias Cormann. Make no mistake, they will be welcoming the attention. | For Splash Out 2018 to land, the government progressives will have to grab onto it and wrestle with it for as long as there is a cheap jibe from Scott Morrison or a monotonal core message from Mathias Cormann. Make no mistake, they will be welcoming the attention. |
| But to really destroy Splash Out, the trick will be to pocket whatever tax cut is on offer and move back to the big issues we face as a nation: energy transition, housing affordability, inequality, job security – all the issues that the Coalition continues to ignore through its own dysfunction. | But to really destroy Splash Out, the trick will be to pocket whatever tax cut is on offer and move back to the big issues we face as a nation: energy transition, housing affordability, inequality, job security – all the issues that the Coalition continues to ignore through its own dysfunction. |
| That’s the real political battle that begins tonight. | That’s the real political battle that begins tonight. |
| • Peter Lewis is the executive director of Essential and a Guardian Australia columnist | • Peter Lewis is the executive director of Essential and a Guardian Australia columnist |
| Essential poll | Essential poll |
| Opinion | Opinion |
| Australian budget 2018 | Australian budget 2018 |
| Scott Morrison | Scott Morrison |
| Tax | Tax |
| Australian economy | Australian economy |
| comment | comment |
| Share on Facebook | Share on Facebook |
| Share on Twitter | Share on Twitter |
| Share via Email | Share via Email |
| Share on LinkedIn | Share on LinkedIn |
| Share on Pinterest | Share on Pinterest |
| Share on WhatsApp | Share on WhatsApp |
| Share on Messenger | Share on Messenger |
| Reuse this content | Reuse this content |